European Commission Rejects Slovenia’s Request for Mediation Regarding NLB

The European Commission has rejected Slovenia’s request to mediate in its dispute with Croatia regarding the issue of transferred savings of Croatian citizens in the former Ljubljanska banka, Slovenian media reported on Friday, citing sources in the government.

Prime Minister Miro Cerar sent a letter in April to President Jean-Claude Juncker and Vice President Timmermans requesting that the Commission mediate in his government’s dispute with Croatia over the issue of transferred foreign currency savings of Croatian citizens in the former Ljubljanska banka Zagreb, for which legal proceedings are ongoing in Croatian courts, in order to achieve their suspension.

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Foreign Minister Karl Erjavec stated at the time that if Croatia rejects the Commission’s mediation, it could sue Croatia in the EU court in Luxembourg because the old foreign currency savings from the former SFRY is a succession issue, and that Croatia acknowledged this by signing the so-called memorandum from Mokrica, which was supported by the European Union.

As reported on Friday by the Ljubljana newspaper Dnevnik, Finance Minister Mateja Vraničar Erman confirmed that the Commission responded to Slovenia’s request regarding NLB this week, stating that it believes its mediation would not contribute to resolving this issue between the two countries.

Special Law

The Slovenian government continues to assert that Croatia, by continuing legal proceedings against the “old” Ljubljanska banka and its legal successor Nova Ljubljanska banka (NLB), “is acting contrary to agreed legal solutions,” and that it will adopt a special law to protect the interests of NLB, in order to legally shield the bank from possible court enforcement based on Croatian court rulings, denying that the initiation of this dispute was merely a maneuver to delay the privatization of NLB, which the European Commission demands based on obligations accepted by the former government of Prime Minister Alenka Bratušek, Slovenian media reported on Friday.

Such a stance of the outgoing government of Prime Minister Miro Cerar has faced a wave of criticism in the media, as failure to fulfill the obligation to sell three-quarters of NLB shares could result in the bank facing sanctions and having to repay state aid received during the crisis over bad loans in 2013.

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“The government intended to outsmart the Commission by seeking its mediation in the dispute over transferred savings, which was not only an attempt to shift responsibility onto others but also a transparent attempt to delay the sale of NLB,” Dnevnik states, adding that NLB needs protection, but not from lawsuits, rather from the government that is causing it harm.

The government of Prime Minister Cerar is sharply criticized in a comment on Friday by the Ljubljana Delo. Delaying the privatization of NLB at a time when bank share prices are falling will lead to damage to the state budget and taxpayers, and NLB could find itself under sanctions by the Commission, as it risks losing its subsidiaries in the Western Balkan countries if no new compromise is reached with the Commission, states the central Slovenian daily.

“The European Commission could very quickly remove the diplomatic gloves, and then we could expect its rather uncompromising solution with a short deadline for the sale of NLB and new obligations for the bank and the state,” the newspaper notes.