Former Foreign Minister Mate Granic said in his testimony before the Zagreb County Court on Friday that all dealings with Austria's Hypo bank to grant a loan to Croatia in the mid-1990s had been conducted by his deputy at the time, Ivo Sanader, after they had arranged a deal with the Austrian partners with the approval of the President and the Prime Minister of Croatia.
Granic said that he had regularly informed Austrian Foreign Minister Alois Mock about the loan negotiations, adding that Mock was a great friend of Croatia and that it was he who had recommended cooperation with Hypo bank. It was a time when there were no foreign banks on the Croatian market and the government could not obtain a loan on international financial markets, he added.
Granic said that Mock had first sent a letter recommending "an ambitious bank from Carinthia" that was willing to grant a loan to Croatia for the purchase of buildings for its diplomatic missions. Granic said that he had left further communication with Hypo to his deputy Sanader because of his excellent knowledge of German.
The Foreign Ministry received a letter of intent from Hypo bank in September 1994, after which Sanader arranged a meeting with the bank's executives, including its director, Wolfgang Kulterer.
"My deputy was in a very good mood when he brought me the letter of intent. That also put me in a good mood because it meant that we would accomplish our goal," Granic said.
Granic said that the Hypo bank executives confirmed at the meeting that they were ready to grant Croatia a loan, adding that President Franjo Tudjman and Prime Minister Nikica Valentic were also pleased with the outcome of the meeting.
Granic said that he next met Kulterer a year later when the whole loan procedure had been completed. Sanader then arranged a lunch in a Zagreb restaurant, where Hypo bank executives were interested in the situation in Bosnia and Herzegovina whose market they planned to enter.
When asked by Judge Ivan Turudic whether it was appropriate for a foreign minister to meet bank executives for a lunch, Granic said that it was, because Hypo was the first foreign bank to enter Croatia and grant it a loan. "It carried weight and we appreciated it," he said.
Granic will continue his testimony at 1100 hours on November 24.
Sanader is on trial for allegedly taking a 3.6 million kuna commission from Hypo bank to facilitate the granting of a loan to Croatia. He is also charged with receiving 10 million euros in bribes from the Hungarian oil company MOL when he was Prime Minister to help it secure a dominant position in Croatia's INA.
