"My message to the banking sector is: Instead of discussing arbitration, you have 15 days left to start calculating annuities for your clients. You have always claimed that for you clients come first, so show it and get to work," Lalovac said in an interview with Nova TV.
Reuters has reported that banks to be affected by the government's plan for the conversion of CHF loans will seek arbitration from the International Centre for Settlement of Investment Disputes in Washington.
Asked to comment on the request by the Franak association, which brings together holders of CHF loans, that Croatian National Bank Governor Boris Vujcic step down and if he had consulted with him, Lalovac said that he had met with Vujcic twice before the government bill was made public. "We discussed all options and he was the first to warn that the conversion into kuna loans would be harmful for the exchange rate and one of his proposals was conversion into euros. I have seen the statement signed by one of his deputies and I believe that there has been a communication mistake in the HNB," said Lalovac.
The Jutarnji List daily on Saturday published a document from the HNB in which the central bank warns the government that its bill could cause very serious financial and macroeconomic instability in Croatia, estimating that the most vulnerable loan holders would continue having problem repaying their loans.
Lalovac said banks did not have a legal basis to prevent the government from passing the law. "The banks have no legal basis (to prevent the passage of the law), we have formulated a law that provides for an even distribution of the burden. We believe that the potential of commercial banks is much bigger than that of citizens. The agony of citizens has been going on for long and I don't want to say that now banks will suffer in agony, but they should stop to think what kind of products they offered," he said.
As for a draft budget revision for this year, to be discussed at a government session on Tuesday, Lalovac said that "most funding will go to the Science, Education and Sports Ministry, HRK 300 million. The Social Policy Ministry will receive HRK 150 million, the Labour Ministry HRK 130 million and HRK 90 million will go for child allowances." He added that the deficit would remain at the same level.
Asked if that meant that Science, Education and Sports Minister Vedran Mornar would be able to increase salaries in the education sector, Lalovac said that that would require slightly better times. It will be possible to increase those salaries
in a year or two as that requires an economic growth rate of a minimum 2%, he said.