Lovrinović: HNB is a greater destabilizer of the economy and society than Agrokor

In today’s break requested on behalf of the club of representatives Change Croatia, representative Prof. Dr. Ivan Lovrinović warned that the leadership of HNB is sending the following messages to the public these days: “Everyone knew everything – no one took any action”, “Agrokor’s uncovered promissory notes are not our problem”, “Financial stability is not threatened”.

– It is incredible how HNB shifts responsibility to all other institutions again, and they do not feel guilty at all, as if they are not responsible for supervising banks, which they have already done in the case of the franc. Where does the irresponsibility and incompetence of HNB end? The facts are as follows: First, HNB knew the extent of Agrokor’s external and internal debt, second, they knew the volume of Agrokor’s promissory note issuance and that due to over-indebtedness a good part is uncovered. Pevec suffered in 2007 due to 181 million kuna of uncovered promissory notes, and here we are talking about billions. This is not dangerous for HNB and does not represent an intrusion into the monetary system, which in all countries carries the weight of aggression – said Lovrinović.

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He explained that the issuance of uncovered promissory notes is a gray area, a parallel issuance of money, as it is about the issuance of monetary substitutes that play the most important function of money – the function of circulation.

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Lovrinović believes that the regulator of factoring companies, the Croatian Financial Services Supervisory Agency (HANFA), also bears great responsibility in all this, and that HNB has done nothing to ensure low interest rates on loans for companies and citizens from 2008 to today, as central banks in other EU countries have done, but allowed usury of all entities, which has pushed hundreds of thousands of citizens and tens of thousands of entrepreneurs into debt slavery.

The destructive interest rate policy of HNB and banks was an important cause of Agrokor’s collapse

While other central banks have lowered interest rates to zero or near since 2008, HNB raised its discount rate from 4.5 to 9%. Why? On that 9%, the law added another 5% for citizens and 8% for companies, thus forming the default interest rate. So, if a citizen took a loan at 6% and could not repay it because he lost his job, a default penalty interest rate of 14% was applied to the calculated debt, and for companies even 17%, warns Lovrinović.

Sources of destabilization

He asked whether we should be surprised that we have 330 thousand blocked accounts? He also added why the government does not sound the alarm when 8 percent of Croatian citizens have blocked accounts or even 11.5 percent of the working-age population. HNB has created conditions for usury of citizens and companies. Billions of kuna have been siphoned off based on this, liquidity in the economy has increased, and foreclosures have become a mass phenomenon, he warned.

– There you go, it is clear where one of the key sources of our destabilization is, says Lovrinović.

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He said that the Croatian National Bank is an institution that everyone has so far avoided. It is the epicenter of the problem, a bigger problem than Agrokor, and that the position and functioning of HNB must finally be changed.

He also believes that if the ruling party does not want to change the way of working and the responsibility of HNB, then we must at least change its name. It is neither Croatian, nor national, nor a bank.

The full statement can be read at the link.