Those Who Save Loose Everything

Feral Tribune, Split, Croatia, December 21 1998

by Milan Gavrovic

There is no difference between the logic used by the vice-president in the Croatian Government, Jure Radic, to deny tenant rights to Serbs and that used by Ljubljanska Bank to deny to its customers from Croatia the right to withdraw their own money. In both cases, the cause is pure nationalism. Namely, a right that is given to our own Croats or Slovenes, is denied to the members of another nation.

Mr. Radic, at the time labeled "minister for ethnic cleansing" by Ivan Zvonimir Cicak, went so far that at the recent conference of donor countries he decisively rejected the possibility that the former tenancy rights of those Serbs who wish to return to Croatia could be recognized and that they could reclaim their old apartments. "That is an obsolete Communist category..." was his final argument. This argument was broadcast to the whole nation the very same evening by the state and ruling party controlled television. The fact that all Croats (and a few remaining Serbs who cannot any more be a "troublesome factor") kept their Communist tenancy rights and, based on them, bought their apartments, is simply immaterial. As well as the practice of the leaders of the ruling party to, a long time after the fall of Communism, give themselves "Communist" tenancy rights and then, in a not even remotely capitalist manner, buy those apartments cheaply. Double standards are the core of every sort of nationalist logic.

In the Ljubljanska Bank case, the role of Mr. Radic was taken recently by the well-known Slovenian (and once upon a time Yugoslav) financial expert, a member of the Overseeing Board of the Slovenian National Bank, Dr. Ivan Ribnikar. According to him, Ljubljanska Bank does not owe anything to its Croatian customers with foreign currency deposits. Apparently, the bank used their money to give credits to Croatian companies and after the break up of the former Yugoslavia was unable to recover those credits. Thus, according to Ribnikar, the Croatian money remained, or was lost, in Croatia.

Shameless Lies

That quasi argument is not new. Thus, the representative of the customers from Croatia, Bozidar Vukasovic, had an earlier prepared answer. Out of about DM900 million that, according to him, Ljubljanska Bank owes (excluding interest for the last eight years) DM168 million, or 18.5%, were invested in the Croatian economy. These data are quoted from the analysis supported by The World Bank that was never disputed by Ljubljanska Bank. Thus, indicates Vukasovic, Dr. Ribnikar knows about them, which means that he is consciously lying. However, even if caught in that sort of a lie, a nationalist will never be ashamed. In his value system (if one could call it that) the truth is what is useful for his nation. Croats and Slovenes are not and cannot be the same.

The Croatian customers of Ljubljanska Bank faced exactly that kind of logic eight years ago in front of closed tills of what had until then also been their bank. Namely, immediately after the breakup of the former Yugoslavia Ljubljanska Bank started refunding DM500 per month to its Slovene customers in Slovenia. The customers in Croatia were not refunded a single Deutsch Mark. Soon all "old" foreign currency savings accounts in Slovenia were unblocked and converted into "new" savings accounts. However, money belonging to customers from other parts of Yugoslavia remained frozen. For Ljubljanska Bank they not only became second rate customers: they ceased to be customers and became Croats, Bosnians, Serbs and others. With them there are only collective national accounts and settlements.

Moreover, in Croatia Ljubljanska Bank was not treated like other Croatian banks (although, in Croatia, it was a Croatian bank, as today for example Austrian Bank and Trieste Savings Society). The Croatian Parliament declared all foreign currency savings accounts a public debt, meaning that instead of by banks they would be refunded by all taxpayers. However, that did not apply to Ljubljanska Bank. There was not even an attempt to clarify what portion of the foreign currency deposits belonging to the customers from Croatia was lost in Croatia, and what amount was used somewhere else, in order to figure out who owes what to whom. Refunds were not even considered. Both new states spent money belonging to the Croatian citizens, bank customers, making sure not to return a single cent, unless forced to do so.

In that, Slovenia had an undeniable advantage because Ljubljanska Bank managed to draw customers from other republics in the former Yugoslavia. Many considered Slovenes to be especially trustworthy and professional, and consequently, preferred Ljubljanska Bank to banks from their own republics. Only in Zagreb, Ljubljanska Bank had 122,000 customers. It can be assumed that in Serbia, Bosnia (customers from Bosnia claim DM 270 million, without interest) and other former Yugoslav republics, Ljubljanska Bank had at least as many customers as in Croatia. When Slovenia declared independence that turned out to be a huge advantage. It is likely that the savings deposits of the customers in Slovenia could have been refunded relatively easy because the deposits of the customers living outside Slovenia were used to fund the cost of separation.

Regime of Theft

After that Ljubljanska Bank kept finding various excuses for failing to refund the savings to the customers living outside Slovenia. Customers in FR Yugoslavia (Serbia and Montenegro) were for example told that their country is under United Nations sanctions. The self-declared Slovene liberal democracy failed to notice that the country, and not its citizens, was under sanctions. (Liberal means that it is based on the rights of an individual.) It has not occurred to a single bank in the West to block private accounts of the citizens of FR Yugoslavia.

Also, nowhere in the world do the customers care about the credit policy of the bank; namely, to whom it lends money, from whom it borrows it and whether it was able to recoup its loans; similarly Croatian customers do not care to whom Ljubljanska Bank lent their money. As long as a bank exists, until it declares bankruptcy, it has obligations towards its customers. These obligations are towards an individual who has entrusted it with his or her money, not towards a country or a nation. After the break up of Yugoslavia numerous Slovenian companies went bankrupt, but Ljubljanska bank did not try to pass that loss to its customers in Slovenia.

The break up of Yugoslavia and the destruction of the old system marked the beginning of a great robbery of the state owned and even private property. The new nationalist authorities had very little sympathy for the members of their own, let alone another, nation. In Croatia, for example, the authorities stubbornly claimed that the foreign currency deposits from Croatian banks were left behind in Belgrade (at the time prime minister Nikica Valentic tried to prove that), and that the Croatian state has transferred savings into public debt only because of its generosity with respect to its citizens. The first claim was simply a lie, while the nature of "generosity" became evident during the transfer of state-owned apartments into private hands: the state immediately found an opportunity to steal 30 percent from the "old" foreign currency savings [savings could have been used to pay for the apartments, but at the rate of 0.7:1]. It is an old and tested truth that every nationalist regime in history has robbed its nation. The only purpose of the transfer of the "old" foreign currency savings into public debt was to renew some sort of trust into the banking system.

Facing court verdicts that obliged her to refund deposits of individual customers who had filed expensive suits, Slovenia divided Ljubljanska Bank into "old" and "new" banks. The old one was saddled with all of the debts and obligations, while all of the money was transferred to the new bank. This decision was implemented in a Constitutional Law that also confirmed that the new bank only has obligations towards the customers who live in Slovenia.

Save Nerves

The fact that a state resorts to that sort of tricks clearly demonstrates that, as far as nationalism is concerned, even democratic Slovenia is not all that different from the rest of the former Yugoslavia. Under a thin liberal skin one can find burning Slovenian nationalism, which has halved the number of non-Slovenes in the country, is forcing the remaining "aliens" to assimilate, and does not recognize a single ethnic minority from the countries formed after the break up of the former Yugoslavia. Obviously, in Slovenia it is not necessary to prove that the attempt to keep money belonging to Croatian, Bosnian, or Serbian customers is an act of sincere and true patriotism.

Will the time when all the debts must be repaid finally arrive? Tireless Bozidar Vukasovic is convinced that that time is approaching quickly. He puts his faith in the European Court for Human Rights and the legal system of the European Union, which Slovenia should join in the near future. Under his leadership, wronged customers of Ljubljanska bank have founded a savings-credit cooperative "money to the customer", whose 6000 members seek DM 50 million ($35 million) from Ljubljanska Bank. On the other hand, the Slovenian side claims that the whole case must wait for the conclusion of the succession negotiations between the states formed after the break up of Yugoslavia. Again, the same logic according to which there are only states and nations and individuals have no rights. Most of those individuals, whose deposits were small, have probably already written off their losses.

After 8 years, the frozen savings have grown so large that Slovenia, even if it wanted to do so, could not repay them without great disturbances in its own economy, drastic slow-down of the economic growth and a reduction of standard of its inhabitants. But Bozidar Vukasovic again has a ready answer: "If you have no cash, give us shares in New Ljubljanska Bank." There is a saying that the world belongs to optimists. It remains to be seen whether that also applies to shares.

Milivoje Zugoc, attorney of numerous customers with suits against Ljubljanska Bank

Those Who Drink, Should Pay

I think that it would be good if a Macedonian citizen sued the state of Macedonia because Ljubljanska Bank refuses to refund his savings. That way many things would become much clearer..." says Zagreb attorney Milivoje Zugic. He has represented the largest number of the customers in their suits against Ljubljanska Bank.

Why the state of Macedonia?

Because foreign currency savings accounts were guaranteed by the former Yugoslav federation. After declarations of independence all new states declared to be heirs (successors) of the property and rights of the former state. However, one cannot inherit rights and reject obligations. In Macedonia, the Macedonian state has inherited rights and obligations of the former Yugoslavia. In Croatia the same applies to the Croatian state. According to the latest data, from June 30 1991, the total foreign currency savings deposits in Yugoslavia were $11.2 million, with $4.8 million of that in Croatia and Slovenia. Someone spent that money and must pay it back.

But the guarantor steps in only after the debtor declares bankruptcy. That did not happen in Ljubljanska Bank case...

That is correct, but now both the debtor and guarantor are avoiding their obligations. They must be forced to account for their actions.

Does that mean that this case must after all be resolved in package with the succession of the former state?

No, it does not. I am only saying that obligations are inherited together with rights. States are only guarantors and can also sue debtors, whose debts they guarantee. The relationship between customers and banks is a pure private-legal relationship and states have nothing to do with that. It is a private, not state-owned, money.

How did separation of Ljubljanska Bank into "new" and "old" affect those trials in which you participate?

During the last two years, it has become virtually impossible to implement a verdict and obtain the funds whose release had been ordered by a court. It is interesting that that division was implemented on the basis of a special Constitutional Law. That was done because such a law has the force of the Constitution and its Constitutionality cannot be tested in the Slovenian Constitutional Court.

Can this dispute be internationalized?

It is possible to sue in the European Court for Human Rights against Nova Ljubljanska Bank and the Slovenian state and demand payments from their property.

Has Croatia, by transferring foreign currency savings into public debt, fulfilled its obligations as a guarantor, at least towards its citizens?

Conversion of the savings into public debt is illegal because by doing that, the debtor, and guarantor is also a debtor, has changed the conditions of the repayment of the debt. That is illegal.

Was it legal that during the privatization of state-owned apartments, those who wanted to use their "old" foreign currency savings were recognized only 70 percent of its true value?

Of course, it was not. People should have then submitted an affidavit stating that they will demand the return of the difference in court. But, who knew that in all the confusion and fear. Get what you can! All those who controlled foreign currency savings accounts counted on that. Now, it is too late.

Translated on 2/12/99