Governor: ‘Croatia has similar problems as Greece, but we are far from a Greece scenario’

The Governor of the Croatian National Bank (HNB) says that Croatia is far from following in the footsteps of Greece after the Mediterranean nation technically went bankrupt overnight…

Commenting on the Greek debt crisis, and the effects for Croatia in an interview on RTL television, Governor Boris Vujčić said that whilst Croatia and Greece had some similarities, Croatia were far away from a similar scenario.

A lot of nations, owned money by Greece, were put in a difficult position overnight.

“Croatia is in a completely different situation. We owe money to Greece, they do not owe us. The debt of Croatian residents to Greece was 74.5 million euros, whilst the Greek debt to us is just 130,00 euros. We are one nation that is in a completely different situation than say Slovenia for example,” Vujčić said, before saying that some Croatian citizens could feel some effects of the Greek debt crisis.

“In the short-term we are not expecting interest rates on our debts to rise. Also short-term I do not expect that the euro will go up. However, what may happen is growth in the difference of the interest rate paid by Croatia in relation to Germany. Thus, the risk premium. What we saw immediately after the start of the crisis, markets have reacted quite benign. For us, for example, the difference increased by 0.2 percentage points,” he said.

Vujčić says that there is no fear of Croatia being put into the same position as Greece if they could not pay any installments of its debts.

“This can not happen. We are in a situation where our international reserves cover the entire Croatian foreign debt for one year. So we are far from that scenario. They are our guarantee that we will not find ourselves in Greece’s situation,” he said.