ZAGREB, 26 May, 2021 - Amendments to the Capital Market Act, which are aimed at further aligning Croatia's regulatory framework with the EU acquis, were supported on Wednesday by both the Opposition and the ruling majority in the parliament, who expressed hopes for the revival of the capital market. 

This is one of the most complicated laws that summarises what kind of capital market Europe wants, said Social Democrat MP Boris Lalovac, warning that Croatia's capital market was far less developed than the European.

"The value of the capital market in Croatia is HRK 276 billion, 140 billion are stocks and 130 billion securities, the annual turnover of the Zagreb Stock Exchange is around HRK 3 billion while the turnover on the OTC market is HRK 27 billion," Lalovac said.

That shows that outside of the stock exchange and capital markets, which have strict rules, trading is ten times greater, Lalovac said, expressing hope this would change.

Grozdana Perić of the HDZ said that better oversight and regulation would enable further development of the capital market in Croatia.

She warned, however, that the coronavirus crisis had caused an outflow of funds from investment funds and that their value had dropped by more than 35% or HRK 8 billion.

That is one of the reasons for amending the law, said the State Secretary at the Finance Ministry, Stjepan Čuraj, who presented the amendments to MPs.

"If we take as an example the Zagreb Stock Exchange alone, during the pandemic in 2020 it dropped by more than 35%, from 2,000 to 1,300 basis points," Čuraj said, noting that there was room for improvement.

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After the Croatian Constitutional Court decided on November 12, 2015 that disputed Swiss Franc loan conversions will remain in effect until the Court arrives at a final decision, Croatian Finance Minister Boris Lalovac commented on the latest turn of events:

„I hope this is now a done deal and I would like to thank the citizens of Croatia for believing in us“. Minister Lalovac also announced that all banks that have tried to distance themselves from the conversion using various contract annexes in case the Constitutional Court annulled the Swiss Franc law will be penalised.

„It is high time for people to receive their new payment slips with lowered instalments since that is fair and realistic. As for the banks, they speculated, waited for the elections and now they got themselves in trouble. They printed something in small letters in the annexes thinking it would scare off the citizens counting on this law to be annulled“ Lalovac added.

He stressed that banks now have 24 hours to print out new contract annexes, they have to distribute them all over again, they have to get everyone in the bank involved otherwise they will be severely punished by both the Ministry of Finance and Croatian National Bank.  

Lalovac's statement comes after several bank loan users warned him that some banks are distributing new contract annexes with a paragraph stating that in case t Law is annulled by the Constitutional Court, newly signed contract would not have any legal effect: „So, we stand to actually make some money out of the arrogance and stupidity of the banks. Today, Constitutional Court confirmed what the banks are doing is not ok and that they have very little time to make things right. Whether they will have enough time, I don't knw, that's their speculation but I can sense that they will be visited by the Ministry of Finance and the Croatian National Bank very soon to see whether everything was done according to rules and regulations. They will be penalised because they added something to the contract which never should have been there in the first place“ Lalovac concluded.   

Questions ranged from Swiss Francs, public debt, regionalisation to legalisation of marijuana

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