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)

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