Vujčić: I believe in reaching an agreement, the alternative is bad for creditors

The Governor of the Croatian National Bank (HNB) Boris Vujčić stated in an interview for Media service that he believes an agreement will eventually be reached in Agrokor, adding that the HNB has provided accurate estimates of how the development of the situation in Agrokor could affect economic growth.

He noted that the initial estimate of the HNB of 0.2 to 0.3 percent slowdown in growth due to the restructuring of the group has proven to be accurate.

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However, he did not want to predict how the situation around Agrokor would develop, stating that it is a matter of the relationship between creditors, the agreement before them, as well as some ongoing court processes that could influence the agreement to go in one direction or another.

It should be emphasized that the conversation took place on Tuesday, before the alleged irrevocable resignation of the extraordinary commissioner for Agrokor Ante Ramljak.

Bad alternative

When asked if he thinks an agreement will be reached, he answered affirmatively, as it is also in the interest of creditors to reach an agreement, since the alternative would be bad for them.

“However, this process will certainly not be easy and again depends on the positions that creditors take and the initiation of some court disputes,” emphasized Vujčić, adding that the Croatian banking system is prepared for the worst-case scenario in Agrokor.

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“We have looked at the worst possible scenario, the impact on the Croatian banking system, for which we are responsible, financial stability, and assuming that you have a 100 percent write-off of claims, that nothing is collected, which is incredible because something will certainly be collected, but if nothing were to be collected not only from Agrokor’s debt but from the entire group of related companies, the Croatian banking system would still have what we call a capital adequacy of 23.6 percent. That is significantly more, meaning the capital that banks would have, than what is minimally required and that would ensure that deposits in banks remain safe and stable,” he said.

“Fantastic job”

According to his estimates, perhaps two banks would need recapitalization, but the stability of the financial system would be ensured.

In response to numerous accusations that the HNB is responsible for everything that has happened around Agrokor, he emphasized that the HNB feels responsible for ensuring the stability of the banking system, which is also its duty.

He believes that his people have done a “fantastic job,” as they managed to isolate the financial system from the problems in the Agrokor group and thus ensured that, regardless of how the situation in Agrokor unfolds, deposits in banks remain safe.

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The Governor of the HNB revealed to Media service that the cooperation with Prime Minister Andrej Plenković and the Government is very good, but also whether he expects re-election since he is in the last months of his term.

“As for my re-election, that of course does not depend on me. At this moment, the project of introducing the euro is ahead of us. I was the deputy chief negotiator for entry into the EU, so in some way, in the next five or six years, this should be the complete conclusion of that project, at least from our side as the HNB,” says Vujčić, adding that the Parliament will decide who is the right person to carry out that project.

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When asked what his wish is and whether he would like to continue his term, he replied: “Look, I do not know any, and I know many governors in Europe and the world, who have refused the proposal to be a governor.”