Slovenia, Croatia sign deal over banking row

(MOKRICE) - Slovenia and Croatia on Monday signed an agreement to resolve a long-standing banking row that threatened to hold up Zagreb's EU accession, scheduled for July.

The dispute, stemming from the breakup of Yugoslavia in the 1990s, concerns the bank savings of some 430,000 Croatians in Slovenia's Ljubljanska Banka (LB).

The two neighbours have been haggling for years over compensation Croatia wants Slovenia to pay for the lost deposits.

Under the agreement, the issue would be resolved within internationally-brokered talks on the distribution of assets owned by the former Yugoslav republics.

"This memorandum solves the last open issue, dilemma, between our two states that stood in the way of the ratification of Croatia's EU accession treaty," Slovenian outgoing prime minister Janez Jansa told a joint news conference with his Croatian counterpart Zoran Milanovic.

He said that since the agreement had been supported by all Slovenian political parties, the eurozone country's parliament will "most probably decide about the ratification by the end of this month."

"Slovenia is looking forward to collaborate with our friendly neighbour Croatia within the European Union," Jansa said after the signing ceremony at Mokrice, a castle near the Slovenia-Croatia border.

"We finally have a deal... that pleases both sides," Milanovic said.

Croatia wanted Slovenia's state-owned Nova Ljubljanska Banka, seen as the successor to the LB, to stump up 270 million euros ($351 million) to cover deposits Zagreb paid back to most account holders in the 1990s.

But Slovenia had threatened to block Zagreb's EU accession unless a deal was reached that would bring the dispute back to the distribution talks under the auspices of the Basel Bank for International Settlements (BIS).

Under the memorandum signed Monday, Slovenia committed to immediately launch the procedure to ratify Croatia's EU accession treaty.

Jansa said the collapse of his government in February and ongoing negotiations by opposition leader Alenka Bratusek to form a new government would not hamper the ratification of the deal.

Croatia is set to become the European Union's 28th member on July 1, but it still needs all member states to ratify its accession agreement, including Slovenia, Germany, Holland and Denmark.