Croatian People's Party (HNS) leader Radimir Cacic said on Thursday that the government's model of dealing with the problem of high increases in instalments of housing loans pegged to the Swiss franc was untenable and that returning to the euro-zone was the solution.
"We have to return to the euro-zone and share its fate and there is no other way out, which means returning to the moment of the loan issue and switching from the Swiss franc to the euro with an increase in the interest rate of one percent as against the interest rate paid at that time by those who took loans pegged to the euro," Cacic said at a news conference.
"People who took loans pegged to the Swiss franc bear their own share of responsibility, but only a smaller one," Cacic said, adding that citizens, banks and the state must all bear their part of the burden as well as that the central bank, the HNB, must help the state as well as the banks in dealing with imminent losses.
The HNS leader said one must not pass any decisions that would discriminate against the majority, namely people who took loans pegged to the euro.
"The state failed to recognise the problem on time and we now have a number of contaminated loans pegged to the franc and face a slowdown in their repayment and personal bankruptcies, which will require legislative changes," Cacic said, criticising the HNB for failing to intervene on time.
He described as positive the fact that the banks were doing business well and that his proposal for dealing with the current situation could be useful at least in part, adding that the banks were certainly aware that there was a serious risk of several dozen percent of current housing loans pegged to the franc turning into risky loans.
Prime Minister Jadranka Kosor said on Wednesday the government sought to settle the problem of high increases in instalments of housing loans pegged to the Swiss franc by having the banks reduce the instalments to the amount agreed at the time of the issue of the loan, noting that this was the minimum below which the government would not go.
The minimum sought by the government is that instalments should be fixed in kunas according to a fixed exchange rate of 5.8 kuna or less for one Swiss franc, and that the difference in the annuity between the actual rate and the proposed rate is treated by the banks as a deferred, interest-free claim, Kosor said.
