STA, March 26, 2018 – The parliamentary Constitutional Commission will discuss on Monday a motion to shield Slovenia's biggest bank, NLB, against damages stemming from Yugoslav-era deposits in Croatia. Although the motion enjoys cross-partisan support, it is unclear if it will pass given that there are many legal dilemmas and that the time is running out for parliament.
The opposition Democrats (SDS) and New Slovenia (NSi) have sponsored a proposal to amend a special constitutional law, which established NLB in 1994 by extracting assets from Ljubljanska Banka (LB) while leaving LB with liabilities, in particular in Croatia and Bosnia.
Under the new amendments, NLB would be explicitly banned from paying damages in cases before Croatian courts.
In the event NLB was forced to pay with enforcements on its assets in Croatia, it would have to reclaim the money from Croatian companies in majority state ownership or from Croatian banks.
But the motion does not address the issue of how the state could repay the damage NLB has already sustained in three court rulings. According to available data, NLB recently settled EUR 1.5m in claims and at least one more claim is open.
The state cannot simply recompense the bank for the damage, because this would be considered state aid by the European Commission an NLB would have to it pay back.
In addition to these dilemmas, the National Assembly, whose term will run out shortly, has to address the matter two times at the commission level and two times in a plenary to satisfy legal requirements.
According the National Assembly, it should be possible to shepherd the motion through if the early general election is not held before 27 May.