Photo: Vecernji list
When it comes to searching for good government initiatives in creating a positive or reassuring mien in effective promulgation of individual citizen’s responsibility in achieving solid economic behavior and behavior expected within a democratic framework, don’t come knocking on Croatian government’s door.
Much of what you’ll get are forceful, almost punitive measures that seem to have been plucked out out of Ivan Pavlov’s Classical conditioning or Burrhus Frederic Skinner’s Operant conditioning laboratory. Experiments galore when it comes to modifying the behavior of citizens who have endured several decades of Communist “parenting”, been kept in darkness when it comes to the workings and the power of civil law. I might sound like a broken record to some, but there just does not seem to be any planned action by the Croatian government that acknowledges the wrongs of the Communist system and introduces planned actions/programs (including education) to effectuate positive changes or empowerment of the people in making democracy work on the needed blanket scale.
Not long ago we saw the publication by the government of the so-called “Pillar of Shame” – the tax debtor list; which of course produced relatively poor results. Then we saw the publication of war-veterans list (true and false veterans alike) to try and “weed out” those on benefits that shouldn’t be receiving benefits. Then, barely a month after that lunacy we have the heavy-hand of debt-collection picking up on steam these days, which clearly indicate that the Croatian government is trying to get blood out of a stone, with little room for negotiations.
Of course, debts must be paid and debt-collection exists in every country and, so too, it should in Croatia. In Croatia, though, it seems that creditors and debtors along with the government live in Lalaland, where important things such as statutes of limitations and wage garnishing by a court of justice (or other independent of government body) fall by the wayside. Not to mention the fact that most debtors are alarmingly impoverished and live in increasing poverty due to unemployment and the like.
According to Vecernji List every tenth citizen of Croatia cannot pay his/her debts. It states that the enforcement system of debt-recovery is among the biggest problems in Croatia today (confirmed by the monitoring from European Commission, as well). FINA’s (Financial Agency in Croatia which is “a key partner to the government in the pension reform, clearing, collection and supervision of mandatory contributions, taxes and surtaxes, as well as all state treasury affairs”) recent report says that bank accounts of 242,192 have been blocked due to unrecovered debt of 16.31 billion Kunas (cca 2.2 billion Euro) (cca 15% of Annual Budget).
The most alarming fact is that, by the end of 2012, there have been 221,833 protected (special) bank accounts for citizens who cannot pay their debts immediately. I.e., these protected bank accounts will hold parts of wages or pension of the protected account holders so that debts can be gradually paid off.
This “protected” bank account reality reminds one of “wage garnishing” imposed by courts in Western civilised countries, only I doubt that these 221,833 citizens have been afforded the human right and morally decent right of having a court of justice or a similar independent body decide on whether and by how much their wage or pension should be docked. We are left to imagine how those “protected” bank accounts might have come about and whether their owners were at the mercy of some employee of the Government debt collector agency (e.g. FINA) who did his/her duty according to law but without pity, without regard for an individual’s circumstance, without ensuring that the debt in question is actually a current debt. I have not come across any reports, which state that Croatian courts have processed 221,833 “wage garnishing” cases and if someone out there has, please let me know.
Croatian Ministry of Finance defines the “special accounts” as accounts into which wages, income etc. exempt from debt recovery enforcement are paid.
According to Article 2 of Croatian Debt recovery enforcement Act (Zakon o provedbi ovrhe na novčanim sredstvima) the enforcements are implemented by the Financial Agency, Croatian National Bank and banks! The Ministry of Finance (Slavko Linic, Minister) controls all this and it seems that debt recovery enforcers in Croatia walk a short line: Finance Agency stamps the debt form and orders the bank what to do!
According to this Act only personal items, clothing, household appliances essential to living and your wedding ring are fully protected from debt collector’s paws (garnishing). What about stipulating a maximum percentage of wage or pension that can be docked, and then it’s up to you to go to court and complain, if you lived in a lucky country, which Croatia seemingly isn’t for people who owe money at the moment? No room to negotiate much, it seems, although cases of hardship could perhaps be considered. Given the magnitude of the problem and the government’s zeal to collect, I doubt cases of hardship will pass the green light smoothly – the Minister would otherwise be facing a stampede!
The government’s heavy-handedness in debt recovery could lie in the fact that while not all debts are necessarily owed to the government institutions (e.g. traffic fines) or companies, the government is calculated to reap a fairly large “windfall” from administrative costs and mostly enormous interest accrued on the debts.
“It’s impermissible that Public Notaries, lawyers and FINA live on account of hardships of an ever increasing number of citizens. The experiences of people who had arrived to the enforcement of debt-recovery stage shows that their actual debt is ten times less than what they must pay. Consumer organisations are inundated with examples where, e.g., citizens with a debt of 80 Kunas ended up paying 1,000 Kunas once all administrative charges, mounting of which the government allowed, are added to the primary debt amount,” says Vecernji List.
Given that there are many “old” debts (older than 6 years/some dating back to 2001 or 2006) these should come under the concept of “Statute of Limitations” for debts – i.e. time has elapsed for the debt to be actionable or recovery process put in motion. But while Croatia does have a similar legislation in its “Compulsory relations Act” (Zakon o obveznim odnosima), it would seem that this is kept as some secret. I.e. it’s up to the citizen who is pressed to repay a debt to say that the debt isn’t a debt any more, calling upon Statute of Limitations. The problem is that he/she needs to know that but many, many do not – kept in darkness that the old saying: “debt for life” doesn’t hold water in democracy, in rule of law. So, just imagine – it costs him/her what he/her cannot afford to find out about that important detail. You’d think that with such a big hoohah by the government to press on with debt collection it might have had the decency to put a brief notice about that on its website and save some money for many people. Surely, it (the government) knows that many of its citizens are not legally savvy, having not so long ago come of of Communist darkness where knowing laws was the privilege of the ruling few, that is.
The whole personal debt recovery enforcement procedure in Croatia seems just too dry, inflexible and pen-pushing affair. While taking and repaying (or not) personal debts are often matters that touch upon honesty of the borrower, the legal processes available when the question of unpaid personal debts arise must surely be well regulated, cater for the rights of creditors as well as debtors, but above all, take into consideration a debtor’s life circumstance and whether wage or pension garnishing would throw him/her into brinks of despair. Definitely, regulating publicly through law the maximum percentage of wage garnishment is a must for any decent society.
It seems that most debtors complain about the administrative charges imposed against their debts.
It’s beyond me to understand why the Croatian government hasn’t introduced some kind of “amnesty from paying debt-recovery administrative charges” period, which would surely benefit many people. And then get on with the business of enforcing legislation; the amnesty period would also serve as a period of education and awareness of law building among the public. If any nation of people deserves such a consideration then it’s the nations that have or are still coming out of Communist or other totalitarian systems under which personal responsibility and awareness of personal obligations towards the rule of law had never been pursued – because that would give power to the people, of course (!) – and Croatia is one of those countries. Ina Vukic, Prof. (Zgb); B.A., M.A.Ps. (Syd)