Croatia – Slovenia Memorandum of Understanding: EU Accession – Blackmail, Smoke and Mirrors Conundrum

Zoran Milanovic, Prime Minister of Croatia   Photo:

Zoran Milanovic, Prime Minister of Croatia Photo:

The ratification by 27 EU member states of Croatia’s EU Accession Treaty involves assessment by those member states as to whether they are satisfied with Croatia’s progress in ensuring compliance with the completion of the remaining implementation of the commitments taken during the accession negotiations, and as required by EU’s imposition of monitoring of Croatia as condition to Croatia’s successful entry into EU membership on 1 July 2013.

Compliance with Judiciary and Fundamental Rights, Market Competition and Justice, Freedom and Security and any bilateral issues between countries is to my knowledge not included in the monitoring, in criteria upon which ratification of the Treaty is to be based.

However, somehow Slovenia has managed to impose its own condition if it’s to ratify Croatia’s EU Accession Treaty. This condition has to do with Slovenia’s push to weasel its way out of its responsibility towards Croatian citizens whose bank savings disappeared when Slovenian Ljubljanska Banka folded or packed-up (1991) in the process of disintegration of former Yugoslavia. (A new bank, Nova Ljubljanska Banka, was formed after the Ljubljanska Banka went bankrupt but it only took over the old bank’s capital, not its debts to foreign savers! One wonders where in the world, even in 1991, could it have been possible and proper without acting unconscionably to ignore creditors in bankruptcy proceedings!)

As it’s a matter of a significant amount of money (some 270 million EURO) Slovenia has been on a vicious path in stalling with the payment of money it owes to Croatian citizens. Slovenia has held a firm opinion that the matter of this debt it owes to the Croatian costumers of its Ljubljanska Banka should be dealt with as a matter of “succession from Yugoslavia”.
In other words, who gets what equity from the assets of former Yugoslavia?
The finalisation stage of State Succession for Socialist Federative Republic Of Yugoslavia (former Yugoslavia) doesn’t appear on the horizon, let alone being near. So, when it comes to paying out the money owed to Croatian’s whose savings went missing along with Ljubljanska Banka from Croatia, Slovenia’s thinking seems to bee something like this: we have equity in the assets of former Yugoslavia, so we’ll wait till the succession case is completed and then subtract the money we might owe from the value of equity coming to us from former Yugoslavia and if Croatia doesn’t agree with this we won’t ratify its EU Accession Treaty!

Lo and behold, this line of thinking is well known to the EU movers and shakers in Brussels, and yet none have come forward to make it clear to Slovenia that ratifying Croatia’s EU Accession Treaty has nothing to do with Slovenia’s problems and everything to do with Croatia’s performance on compliance with matters set by the EU.

On 7 March, Slovenia and Croatia had initialed a memorandum of understanding that should resolve this Ljubljanska Banka dispute. Croatian Foreign Minister Vesna Pusic and Slovenian State Secretary Tone Kajzer initialed the memorandum of understanding. The Prime Ministers of Slovenia and Croatia will sign the final agreement on Monday 11 March, as formal adoption of the agreement.
The Bank for International Settlement (BIS) took on an arbitration role on this dispute. Under the new agreement the Croatian government will suspend all court proceedings regarding savings …and the Slovenian government vowed that it will ratify Croatia’s Accession Treaty.
The two countries will continue active negotiations under the auspices of the Basel-based Bank for International Settlements.

Stefan Fuele, the EU Enlargement Commissioner, welcomed these news and said: “This is also a very good example how joint efforts in the area of good neighbourly relations bring benefits for both sides and provide basis to solve open issues.

Even blackmail seems to be good enough to achieve EU enlargement!

In trying desperately to convince the Croatian people of how good a deal with Slovenia, Croatia has achieved, Prime Minister Zoran Milanovic appeared on Croatian TV evening news on 7 March.

His TV news program interview could perhaps have been palatable, despite his arrogant and antagonistic demeanour, had he not made a ridiculous mistake a lawyer should never make – and he is a lawyer by education:

Question: “A solution has been agreed upon with Slovenia, but the Opposition (Croatian Democratic Union/HDZ) warns of lack of clarity regarding the court proceeding that need to be frozen, they say that, at the end of the day, this could mean the abandonment of the court proceedings?

Zoran Milanovic reply: “ I haven’t seen that warning but I hope that they have read the twenty or so sentences in the memorandum, which does not contain the word ‘freezing’ anywhere, there is the English word ‘stay’ … that’s a big difference … so, freezing does not exist in law and I would like to hear about this from people who know what ‘stay’ means, what suspension means in proceedings of which that is a procedural instrument and everything else is clear, the memorandum is crystal clear, it’s good for them and it’s good for us…

In his evident rejection to entertain properly, duly, what the Croatian opposition was saying about the memorandum with Slovenia, Milanovic arrogantly emphasised in this interview that ‘freezing does not exist in law’! In his arrogant way, he condescendingly labelled the opposition of not knowing what they’re talking about when they interpret the word ‘stay’ in legal and practical terms!

Even though I am not a lawyer, I know that the word ‘Freezing’ had become a part of legal definition of ‘stay’ way back in 1985, when Canada’s Supreme Court adopted that word as part of defining ‘stay’ in Regina V. Jewitt case:

A stay … as defined in Black’s Law Dictionary (5th ed. 1979), it is a kind of injunction with which a court freezes its proceedings at a particular point, stopping the prosecution of the action altogether, or holding up some phase of it. A stay may imply that the proceedings are suspended to await some action required to be taken by one of the parties as, for example, when a non resident has been ordered to give security for costs. In certain circumstances, however, a stay may mean the total discontinuance or permanent suspension of the proceedings”.

So, the Opposition in Croatia (HDZ) was correct in its suggestion that the ‘freezing’ could end up as abandonment of the court proceedings in the long run. Which would be a disaster for the Croatian people whose personal savings are at stake.

But then again, perhaps Prime Minister Milanovic knows all this, as a lawyer and as the Prime Minister, and has adopted the usage of smoke and mirrors in order to avoid answering to the Opposition’s concerns and warnings. Using rhetoric of pretending to know better than the Opposition what the English word ‘stay’ means in legal terms, suggesting that the term is complicated – too complicated for you or I to understand, to mislead the public rather than to inform it! What a mess! Ina Vukic, Prof. (Zgb); B.A., M.A..Ps. (Syd)


  1. Slovenia did the dirty deed against Croatia before. Slovenia blocked eleven negotiating chapters at the accession negotiations with Croatia – if it weren’t for that Croatia could have been an EU member much before. I wish Croatia was as assertive as Slovenia, it doesn’t matter if it’s not a nice way to be.

  2. Tomislav Marinic says:

    In 1992, the Socialist Federal Republic of Yugoslavia (SFRY) dissolved into five successor states: the Federal Republic of Yugoslavia (FRY, Serbia and Montenegro); Croatia; Macedonia; Bosnia and Slovenia. Until 2000, the FRY claimed that it was not a successor, but a continuance of the SFRY!

    Everything SFRY had was theirs!

    That claim was rejected by the international community, with most states considering the FRY to be just another successor state of the SFRY. After the fall of the Milosevic regime, the FRY renounced its claim to continuity.

    In 2003, the FRY changed its federal structure and its name into Serbia and Montenegro.

    In 2006, Montenegro became independent with the consent of Serbia and the central authorities.

    In 2008, Kosovo declared independence from Serbia, the legality of this secession of course still being hotly disputed, while international recognition grows. Kosovo will want a piece of SFRY assets that would have otherwise gone to Serbia.

    And the story continues. And no one to demand immediate resolution to this issue that is in reality quite easy to solve.

    One wonders why?
    Are Yugo-nostalgics that strong?

  3. So the Croatian people whose money we’re talking about are sacrificial lambs Croatian government is putting up to get into the EU! It would be nice if the Croatian government ministers etc, who made the decision about the agreement with Slovenia gave up their wages for a few months, collected the money and give it to the struggling families. How dare they!

  4. Marina Soldo says:

    Zoran Milanovic has a law degree? Who knows how Milanovic got it! You’d think he’d at least know how to research legal concepts and definition. Hey, but that might be too much to ask – that’s a practice that belongs to democratic way of thinking, he might still be stuck in communist Yugoslavia when there was no need to know what the rest of the world says – it was enough to follow the Marshall…

  5. Mason Proper says:

    Oh Lord!
    It looks as if by the time State Succession from Yugoslavia is resolved Serbia will have had plenty of opportunity to fatten its wallets on property that belongs to some other state of former Yugoslavia. That’s particularly so regarding the luxurious real estate throughout the world where Yugoslav consulates and embassies used to be. As soon as Yugoslavia broke down, diplomatic staff were mainly Serb and what do you know: Serbia stayed in those grandiose properties, conducted its own diplomatic work from them, while the rest, including Croatia had to find alternative places, spend enormous funds on leasing or purchasing…

    It seems incredulous that this issue has not been solved in 22 years! Just imagine if the Probate for an asset you’re entitled to lasted that long!

  6. Yep! Yep!
    Slovenia’s Janša was quick to point out that the ratification in parliament would be started “but it will not end until we have received the documentation on the ratification of the memorandum via diplomatic channels.”
    Looks like blackmail, stinks like blackmail, feels like blackmail …

  7. Wilkinson says:

    You noticed a very important detail from Zoran Milanovic’s TV interview. Power to you!
    Blackmail, Smoke and Mirrors – bullseye, Ina. Right on! Cannot see anything else when you dig deeper.

  8. Barbara S says:

    Anything to divert attention from the real issues.
    Milanovic’s arrogance and antagonism could be the result of him shaking in his boots in fear of losing government?

  9. Ana Mendes says:

    Looks like theft to me!
    There’s more than one way to steal from people – these guys are pros at it. Shame, shame, shame!

  10. Spectator says:

    HDZ’s concerns are in place but I haven’t seen them taking advantage of this good stuff, after Milanovic’s TV appearance – perhaps they don’t know how to follow-up on their opposition statements. All busy with new image?

  11. Miso Sorbel says:

    Oh what a Disaster! Poor people.

  12. Acquisitive society works on the principle:” Take the Money and Run!”

  13. I am not angry with Slovenia. They are fighting for their interests and if they manage to get more than their fair share then good for them.

    I am though disappointed with the Croatian government – a government that is NOT fighting for the interests of its citizens.

    How can this government be legitimate?
    How can this government dictate the loss of savings of Croatian citizens?

    The generals were the first sacrificial lambs
    Now the people are the latest sacrificial lambs

    The Yugo-Wolves are having a very nice lamb roast
    – and getting very fat.

  14. Remember what Milanovic’s election platform and promise was to the Croatian people, which by the way he has been 100% true to delivering his promise. He said, he would not promise anything to the Croatia people, only that he would work hard. Well, Milanovic is right, he promised nothing and we got nothing, and his hard work is determined to continue to produce nothing of value! Quite frankly I am jealous…I wish I could tell my employer that I will not do anything of value and get a way with it.

  15. Michael Silovic says:

    Always Croatia First is a forgotten theme from this goverment. The first thing to do when we get money from the IMF and The EU is to return the monies owed to the people.This is how we solve that problem. A lot of this issue is based on Croatia’s entry to the EU so they should help take responsibility for the return of the monies owed.Slovenia should also be penalized from doing business in our country as well as part of a penalty for not returning the funds.Again i say we paid to much for to little to be part of the EU and everyday we see how true this is more and more.

  16. Ratifying an Accession Treaty is like deciding to let a new person permanently move into your house. It is a momentous decision and a No answer can be given for any reason whatsoever. Neither EU law nor common sense restrict the range of criteria. The purpose EU project is to form an ever closer union among the peoples of Europe, and the people of Slovenia are perfectly entitled to wonder whether they want to form a closer Union with the people of Croatia, and if so on which conditions.

    • Martinned in this case it seems that the only condition for Slovenia to ratify Croatia’s Accession Treaty is if Slovenia does not need to pay out its dues to citizens of Croatia to whom it owes a great deal of money. That is a bilateral issue between the two countries and bilateral issues are not part of Croatia’s EU Accession Treaty nor a part of EU Monitoring chapters. It’s odd that Slovenia says it will ratify the Treaty if it doesn’t need to pay the money, which means that Croatia has in eyes of Slovenia satisfied its conditions for Treaty ratification only Slovenia wants to get paid for it. Sorry, but I cannot agree with you, Slovenia is not the matriarch nor the patriarch of EU house as you put it, but if it’s truly so that there are no restrictions to criteria (which I doubt especially because of the Croatia monitoring reports that come quarterly from EU etc) then the criteria Slovenia uses is rotten any which way one looks at it. One wonders what Slovenia would have done were it the other way around – Croatia took Slovenian citizens money?! Don’t need to look far for answer. All in all a sad statement for EU entry criteria.

      • martinned says:

        That’s what I was trying to say: there are no “conditions for Treaty ratification”. Slovenia can ratify the accession treaty, or not, as it sees fit, for whatever reasons it likes. (Just like it can ratify any other treaty, or not, as it likes.) There is nothing in the Treaties to the contrary.

        We may have an opinion about what would or would not be a fair reason to refuse to ratify, and in this case I was under the impression that this mess had already been resolved by the European Court for Human rights its Alesic judgement last November, but reasonable people can disagree as to what is or is not a fair reason, because that is a political question. Specifically, it is a political question that should be handled politically and democratically in each Member State. (That much the Treaties do require, art. 49 TEU, last sentence.)

        For example, a number of Member States, including my own, have at various times refused to let Bulgaria and Romania join Schengen, because they were unhappy with the efforts made towards combating organised crime in those countries. Surely that is a legitimate argument? Likewise, Serbia’s effort’s to join the EU have at times been blocked in order to force it to cooperate better with the ICTY. That’s OK too, right? So where to draw the line? If I’m not mistaken, the Netherlands has not yet ratified the accession treaty either. What if they suddenly decided to stop the ratification process because they are unhappy with Croatia’s cooperation with the ICTY. Hypothetically, that would be a valid argument, right? It might be incorrect, factually, but there is no moral reason why it should be illegitimate for the Netherlands to stop the ratification process for that reason. More examples are possible, but the point stands: the only way to draw the line is to make a political judgement, and the only people who can make that judgment are the decisionmakers in each Member State.

      • Taken on board martinned. What you talk about re Bulgaria and Romania and refusal to ratify them is what I am talking about – i.e. criteria relevant to standards and conditions for EU not an individual country. Thanks

  17. “Voice in the wilderness” but is none of this making anyone question why we are so singlemindedly hell bent on joining a fraternity that others are seriously considering escaping from? What do we care that Great Britain is threatening to leave the EU? What do we care that citizens of such countries as Greece, Portugal, Italy etc. are protesting and questioning their EU membership? Their situations are different from ours. They have mismanaged their economies, they have high unemployment levels, they have overextended themselves into debt to such an extent that there is not a chance of them seeing their way out of it without a massive injection of funds……that doesn’t sound like us at all!!!???

  18. Aspalathos says:

    Good Day Shalom, There Is A Lot To Comment, But Simple Solution Is Not To Join E.U. Look What They Made Of Greece, Cyprus And Other Countries. Croatian People PLEASE STOP This M-B, And No NO – E.U. And Much More, But I Do Not Want To Go Into Jail. Racan U Dogovoru S Drvnosekom Sold Croatian Sea Coast Territory Because Boths Are From Same Tribe-Alpski Hrvati.We Still Have Several Hours And PLEASE SAVE CROATIA FOR FUTURE GENERATIONS. NO-E.U., BUT YES FREE INDEPENDENT REPUBLIC OF CROATIA.


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