Debt from Yugoslav times another issue in Slovenia-Croatia relations
Log pod Mangartom, 17 December - Having fought over their shared border for almost three decades, Slovenia and Croatia also relaunched their long-running dispute about Yugoslav-era foreign currency deposits Croatian citizens had at Slovenia's defunct LB bank in Croatia.
Ljubljana
NLB headquarters.
Photo: Tamino Petelinšek/STA
The problem escalated for Slovenia when NLB bank paid out first damages as ordered by courts in Croatia in relation to the foreign currency deposits, which Slovenia insists is an issue that has nothing to do with NLB but should be resolved as part of succession talks regarding the former Yugoslavia.
Once Croatia had paid out the deposits to former LB clients through two banks several years ago, the banks took LB and its successor NLB to court to reclaim the money.
Some of the rulings have already become final. When NLB refused to pay one, it resorted to the Croatian Constitutional Court, but lost the case. It subsequently paid damages as ordered by a Croatian court in at least two cases, despite explicit instructions by the Slovenian authorities not to do that.
In April, Slovenia asked the European Commission to mediate, arguing the continuation of court proceedings is a violation of EU and international law. It was also said to be preparing a lawsuit against Croatia before the EU Court of Justice.
Since NLB was potentially facing contingent liabilities of up to EUR 400m, a special bill was passed to compensate it from the Slovenian Succession Fund for all the damages that may be enforced, but not for those paid voluntarily.
The bill also paved the way for the privatisation of the country's largest bank, as the outstanding liabilities were said to be the reason for delaying selling the bank in 2017.