Kulterer said the proposal to give Croatia a loan had come from the then Austrian Foreign Minister Alois Mock, after which negotiations were launched with Croatia's foreign minister Mate Granic.

The former Hypo bank executive said that Mock had phoned him, saying that there was a possibility of closing a good deal and that it was important to him to support Croatia and the then Minister Granic. Kulterer added that he accepted the proposal and travelled to Zagreb for talks.

According to testimonies given previously by other Austrian witnesses in the Sanader trial, the purpose of the commission paid to Sanader was development of the market in Croatia, but it was also a condition for closing the loan deal at a time when Croatia had difficulty obtaining money on the international market to buy buildings for its diplomatic missions.

A former Hypo Leasing director in Croatia, Drago Vidakovic, earlier said that he had seen Kulterer, in Klagenfurt in 1995, give an envelope to Sanader, who at the time was Croatia's deputy foreign minister, after he had heard at the bank that a commission should be paid to Sanader.

Sanader, who insists that the charges against him are false, is accused by the anti-corruption agency USKOK of receiving a commission from the Austrian bank in the amount of 3.6 million kuna, which is why he has been charged with war profiteering because at that time, Croatia was still in a state of war.

In this trial, Sanader is also charged with taking 10 million euros in bribes from the Hungarian oil company MOL in exchange for securing MOL a dominant position in the Croatian oil company INA.

Former Finance Minister Ivan Suker is expected to testify later in the day about those charges.