President Milanović supports Franak Association efforts for compensation to residents who accepted loan conversions
The President of the Republic Zoran Milanović met in the Office of the President today with a delegation of “Udruga Franak” (Franak Association of citizens with loans pegged to the Swiss franc). The coordinator of the economic and legal team of Franak Association Goran Aleksić presented to the President of the Republic the outstanding issues related to the Swiss franc case, namely the unresolved issue of the nullity of the loan agreement in Swiss francs, and the unresolved issue of the right to client compensation after accepting the legal conversion.
“We informed the President of the Republic about the problems we have with banks and courts. The fact of the matter is that the Supreme Court, four years after the final collective judgment in the franc case, has yet to resolve two crucial issues, namely the nullity of basic loan agreements in Swiss francs and the issue of compensation for clients who converted their loans. The conversion was six years ago and clients with such loans still do not have legal certainty for their lawsuits. As for the nullity of the contract, we informed the President, and he agrees, that the “Zakon o obveznim odnosima” (Law on Obligations) is completely clear – it says that if the main subject is null and void, if the price is null and void, and it is the currency and interest rate, in that case, the entire loan agreements are null and void,” Aleksić said after the meeting
As for the right to compensation for clients with converted loans, he added, the problem is quite simple: “We have to bring ourselves into balance with the banks. This means that what was initially agreed is not valid, the currency is not valid, the interest rate is not valid, it means that the initial loan amount is valid and the initial interest rate is valid”. He stated five proofs that we were not compensated by the conversion: “The first is that the principal after the conversion was higher than the principal as it should be according to the initial repayment plan. Another proof is that we did not receive prepaid interest. The third proof is that we did not receive a prepaid exchange rate. The fourth proof is that the annuity after conversion was 20% higher than the annuities at the beginning of the loan repayment. And finally, the fifth proof that we did not receive default interest, that is, we had to receive default interest on the prepaid amount of interest and the exchange rate. We didn’t get anything by the conversion”.
Aleksić underlined the economic aspects of the problem. “Namely, twenty thousand people with converted loans have already sued the banks. Those 20,000 people should receive about 15 billion kuna from the banks. Those 15 billion kuna will mean increased spending, it will mean something for the economy, it will mean something for the budget of the Republic of Croatia. If they lose the dispute, it would mean that they would have to pay between 300 and 400 million kuna in court costs, the costs of their lawyers and the costs of bank lawyers,” said Aleksić.
Aleksić also reminded of the fact that the Court of Justice of the European Union solved this problem for Poland and Hungary, but declared itself incompetent for Croatia. “We believe that the reason for that is the false statement of the Government, which said in its statement to the Court of Justice of the EU that clients waived their claims by accepting the conversion. That is a lie because the law prohibits this”, Aleksić concluded.
President Milanović supported the Franak Association in its efforts to resolve the issue of the nullity of entire loan agreements in Swiss francs as soon as possible, and to ensure the right to compensation for clients who have accepted the legal conversion of Swiss francs to euros.
Besides the coordinator of the economic and legal team of Franak Association Goran Aleksić, attending the meeting were the president of the Executive Board of Franak Association and person in charge of the Association Elvis Sudar, member of the Executive Board Vlado Iljkić, lawyer and expert associate of the Association Igor Metelko, as well as office manager, member of the Executive Board and person in charge of the Association Sandra Žiga.
Alongside President Milanović were the Special Adviser to the President for the Economy Velibor Mačkić, and the Assistant Adviser to the President for the Economy Martina Ciglević.
PHOTO: Office of the President of the Republic of Croatia / Ana Marija Katić, Filip Glas