Croatia planning EU-compatible finance regulations for 2008

ZAGREB – Croatia aims to pass key financial laws next year, which would make its financial market compatible with the European Union, a senior finance ministry official said yesterday. «Our goal is to adopt changes and implement key laws in 2008 and 2009. Most of the tasks will be done next year as our target is to be ready to join the EU in 2009,» Ante Zigman, state secretary in the finance ministry, told Reuters in an interview. The laws regulate markets in securities, deposits insurance, financial conglomerates, credit institutions, the insurance industry and the national giro payments system. «Croatia’s financial market is already quite developed and solidly prepared for the final stage of convergence with the EU laws. It’s because the banks, more than 90 percent of which have owners from EU, have a very pronounced role on our market and largely operate in accordance with EU legislation,» Zigman said. He said more work was needed in regulating investment funds, reinsurance and, in particular, capital adequacy. «It means future regulation will require the owners to ensure more capital to guarantee stable running of business. Also, investment funds and insurance companies will have to present more detailed business reports,» Zigman said. Another important change will put an end to the state’s privileged access to the capital market, as is the case now. At present, pension funds, for example, are obliged by law to buy a certain percentage of local state bonds and can subscribe to new issues more easily than private investors. «In the future, they will be able to choose between Croatian state bonds or those of any other EU member,» Zigman said. Croatia hopes to complete EU membership talks by the end of next year, but most observers deem it most likely that Zagreb will join in 2010 or 2011. Croatia is due to hold a general election in November and some analysts believe this might somewhat slow the pace of accession talks this year. Nevertheless, the main political parties of the country agree that pursuing EU membership is a top priority and straying off course is seen as unlikely, regardless of who wins the next elections.