Croatia Approves Swiss-Franc Loans Switch Over Bank Protests
- Parliament backs bills in unanimous vote, bank shares fall
- Foreign banks threaten to sue Croatia in international court
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Croatia’s parliament passed legislation allowing Swiss-franc loans to be converted into euros, ignoring threats from foreign banks that they would challenge the plan in international court and central bank warnings that the move may weaken the kuna.
The package of laws allows the switch of $3.4 billion of Swiss-franc loans into the single currency to help citizens cope with rising payments. The government expects the banks to bear the conversion costs it estimates at as much as 6 billion kuna ($900 million), while the central bank says the burden may reach 8 billion kuna. Shares of foreign banks with the largest market share in Croatia declined after the vote in Zagreb on Friday.