‘Banks Must Be Restricted from the Intolerable Ease of Doing Business’

The Croatian Trade Union Association (HUS) believes that the Government must limit the previous ‘intolerable ease of doing business’ for banks and will support the announced limitation of interest rates on loans if it is proven that the announcements from the Ministry of Finance are true, it was stated at today’s HUS press conference.

HUS President Ozren Matijašević asserted that banks in Croatia are leading in the region in terms of interest rate spreads for savings and loans, which is the main indicator of their profitability. Compared to EU countries, housing loans are 86 percent more expensive, consumer loans are 40 percent more expensive, and allowed overdrafts are 45 percent more expensive.

The announcements that have recently appeared in the media that Finance Minister Slavko Linić, together with the Croatian National Bank (HNB), has prepared a formula for limiting interest rates on loans in the future are met with approval but also skepticism by Matijašević, as he says, it remains to be seen what the announced measures contain.

Reactions from banking circles, which suggest that Linić’s interest rate cuts will negatively affect the supply of loans, are viewed positively by Matijašević because ‘everything that is ‘spat out’ by banks is good for citizens from the start.’

One of the main causes of Croatia’s economic problems, according to him, is the currency clause. He reminded that HUS requested an assessment of the constitutionality of the application of the currency clause back in January 2011, but the Constitutional Court has not commented on it to this day.

Matijašević reiterated the union’s demands from the May Day protest at Jelačić Square for the abolition of parafiscal levies, reindustrialization of the country, encouraging competitiveness, and changing tax policy, emphasizing that the ‘direction in which previous governments have driven’ in Croatia has caused devastating effects.

In the last five years, the number of employed has decreased by 171,208 workers, the registered unemployment rate has jumped from 14.5 percent to 21.6 percent, and the insolvency of citizens has risen to an alarming figure of 255,564 citizens.

Matijašević also dismissed the possibility that his headquarters paid fees or daily allowances to people who came to the protest. HUS did not give a single penny to any protester, he asserted.

He added that HUS does not support the demands of some other unions for taxing citizens’ savings and additional borrowing by the country in order to continue irrational behavior in the public sector.