Slovenia clears EU path for Croatia

Slovenia and Croatia have agreed on a means of resolving a banking dispute that had threatened to derail Croatia’s accession to the European Union in July.

At stake were deposits lost by Croatians when the break-up of the Yugoslavia precipitated the collapse of the Slovenia-based Ljubljanska Banka.

Under the agreement, which will be signed on Monday (11 March), a final solution will be brokered by Bank for International Settlement (BIS), which had in 2010 refused to take on an arbitration role unless the two countries did more to narrow their differences.

The agreement requires Croatia to suspend legal proceedings and to allow Ljubljanska Banka’s successor – Nova Ljubljanska Banka – to operate in Croatia.

Croatia is demanding €270 million for its nationals. Slovenia argues that Croatia’s demand deviates from principle set out for resolving legacy issues from the Yugoslav era, and that legal actions in the Croatian courts limited the scope for negotiation.