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Novi list - Croatia | Wednesday, January 21, 2015

Croatia's costly aid for franc victims

Croatia's Prime Minister Zoran Milanović announced on Monday that the exchange rate for the Swiss franc against the Croatian kuna would be frozen for one year at the rate in effect prior to the decision to uncap the franc against the euro. The move is aimed at preventing over 60,000 Croatians who had taken out loans in Swiss francs from going bankrupt. The left-liberal daily Novi List asks who will foot the bill: "Is this a brilliant move or Russian roulette? Helping these people now to prevent them from burdening the welfare system later on is certainly justified, and the government is entitled to do just that. ... But after his decree the prime minister has had nothing more to say about matters concerning the Swiss franc, and he owes the public an answer. Because the real question is where the money is going to come from. Unofficial calculations put the costs for Milanović's show-stopper at 500 million euros. And this one-year measure can only be a temporary solution until the unavoidable conversion of the loans into kuna or euros, which will cost roughly three billion euros. But no one wants to talk about that now."

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