PM dismisses bankers’ remarks


Prime Minister Zoran Milanovic on Wednesday dismissed bankers’ remarks that a law expected to help citizens with loans pegged to the Swiss franc would favour higher-income citizens, but said that banks had to make money too and that there was no need to rebuke them.

Responding to questions from the press, he said the bankers’ remarks that said law would favour those with higher incomes “is not true… Why have they waited seven years? Now they are getting smart.”
He said the law would help the middle class, that it was a good government decision and that someone was always dissatisfied. “We saw to it that banks don’t suffer, that their profitability isn’t undermined, because banks too have investors who give them money so they can earn something. If the banks earn them too little or lose the money, they withdraw it and then there will be no loans. It’s easy to rail against banks, it’s popular, but the truth is a little more complicated.”
Milanovic would not specify when the law in question would go into force, saying only that it would be soon.
He disagreed with a reporter’s remark that Croatia was following the Polish model regarding loans denominated in Swiss francs. “We have a Croatian model, a Croatian problem and our solution but, of course, we looked at what others are doing.”
Milanovic said the conversion of CHF-pegged loans would nearly equate those with such loans and those with euro-pegged loans, and that they would be calmer because the state and the central bank would vouch for their loans in a way. The central bank “has solid foreign currency reserves… The franc is totally out of the control of what our monetary institution could do. The kuna-euro exchange rate is more under our control, that’s why those people are more secure and now all will be in that bracket.”
Speaking of the government’s policy, Milanovic said the budget gap was lower than ever in the past seven years. “On August 31 this year, the budget deficit was about seven billion kuna. It hadn’t been lower since 2008.” He said “nearly the whole (deficit) goes for the payment of interest rates, which means we have a primary surplus.”
(EUR 1 = HRK 7.55)