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EC warns Croatia on CHF loan conversion legislation

TheEuropean Commission confirmed July 8 that it sent Croatia a formal notice inmid-June regarding its concerns about the country's law on the conversion ofSwiss franc-denominated loans into euros, Vecernjilist reported the same day.

TheEC reportedly said, while pointing out that Croatia's law forces banks to carrythe majority of the related conversion costs, that its retroactive applicationis legally questionable.

"Wehope that Croatia will find a proportionate solution. It is important in theinterest of all, consumers and investors," commission spokesperson VanessaMock reportedly said.

OnJuly 11, news agency Hina, citing Croatian Finance Minister Zdravko Maric, theministry said it will strive to find a solution with the commission andCroatian banks.

Croatiahas until mid-August to respond to the EC, which could turn to the EuropeanCourt of Justice if it is not satisfied with the response, Reuters noted July 8.

Croatia'slaw imposing the conversion of franc-denominated loans into euros wasimplemented in 2015.