The association Franak, established by Croatians who took loans pegged to the Swiss franc in light of a steady appreciation of the Swiss currency, on Tuesday called for lowering interest rates by three percent regardless of the type of loan, indexing all loans to the kuna, and ensuring that during conversion from the Swiss franc to the kuna the loan principal be the same as it was at the time when the loan agreement was signed.
This is the association's starting position for possible negotiations with banks, said the association's president, Bozo Ivosevic.
Ivosevic said that if those three demands were met, it would significantly alleviate the problems of people who had taken loans pegged to the Swiss franc, as well as of those with loans pegged to the euro.
The association's representatives said they would not benefit significantly from the decision of the Swiss National Bank to set the minimum exchange rate at 1.2 francs to one euro, saying the franc exchange rate would remain high, as would loan instalments.
A part of 125,000 people who have taken loans indexed to the franc are barely making their ends meet, while the living standards of others have deteriorated drastically, said Brankica Ivankovic of the Franak association.
She said that loan users should be included in negotiations between the government and commercial banks on easing the burden of loan repayment on citizens who have taken loans pegged to the Swiss franc.
Speaking of balloon loans, proposed by the government and banks as a way of dealing with that problem, Ivankovic said that banks would only make more money on balloon loans due to exchange rate fluctuations and the charging of what she called "additional interest disguised as a fee", adding that another reason against balloon loans was the absence of guarantees that the franc exchange rate would fall.
