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Swiss Franc Loans to be Converted to Euros

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Prime Minister Zoran Milanović has confirmed on Tuesday that Croatia will convert loans denominated in Swiss francs into euros…

The move is set to bring some help to around 60,000 citizens who hold Swiss currency loans.

“We will convert those loans into the euro-denominated ones, but we will also take into account not to put into an unfavourable position those debtors who opted for loans in euros from the very beginning,” Milanović said.

The banks will bare some of the brunt of the costs of the conversion, with the losses recognised as a tax deduction.

Earlier this year the Croatian parliament voted unanimously in favour of amending a consumer credit law which saw the Swiss Franc fixed for 12 months after Switzerland removed the cap on its Swiss Franc to the euro which saw the currency rise 17% against the Croatian kuna in 24 hours.

The rise spelt bad news for the 60,000 homeowners with mortgage loans in the Swiss franc. Around 8% (60,000) of Croatian mortgage loans are in Swiss francs.

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