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Eu asks croatia to rethink franc loan conversion state agency

´╗┐ZAGREB, July 8 The European Commission has asked Croatia to rethink a law ordering banks to convert Swiss-franc loans into euros, saying on Friday it disproportionately hurts local lenders, state media reported. The law, brought in last year, was also applied retroactively, a move that could undermine investors' confidence in the economy, state news agency Hina quoted Brussels officials as saying. The legislation ordered the conversion of loans denominated in Swiss francs entirely at the banks' expense - a move that analysts say imposed about 1 billion euros ($1.11 billion) of losses on local banks, almost all of them owned by parent companies from the European Union. Most of Croatia's Swiss franc loans were made during the credit boom in the 2000s, driven by low interest rates, and were primarily used for mortgages or buying commercial property. When the Swiss central bank lifted its cap on the value of the franc last year and the franc surged, they became far more expensive to service.

"The costs of conversion have almost entirely burdened the lenders and the measure goes beyond what is necessary and proportionate to achieve a legitimate goal of protecting poorer borrowers and avoid a consumer credit crisis," Hina quoted the Commission's spokeswoman Vanessa Mock as saying in Brussels."We hope that Croatia will find a proportionate solution. It is important in the interest of all, consumers and investors," Mock added.

The measure was implemented by the Social Democrats-led government shortly before a national election held in November. The current Croatian caretaker government was not available for an immediate comment. Brussels expects an answer on the warning by mid-August.

Croatia faces a snap election, most likely in early September. Some banks have already filed a suit with the Constitutional Court and indicated they could seek international arbitration. The European Commission can also take action through the European Court of Justice if it is unhappy about how a member state responds over such an issue, covered by EU law.

Eu needs international climate finance roadmap auditors

´╗┐LONDON Dec 17 The European Union needs to establish a roadmap to outline how it plans to increase climate finance for the world's poorest countries to 22-29 billion euros by 2020, according to a report on Tuesday by European auditors. The report from the European Court of Auditors said without financial support the effects of climate change could push millions of people in developing countries back into poverty. The EU and its 28 members are the largest source of finance to help developing countries deal with climate issues. They provided 7.3 billion euros ($10.04 billion) in climate finance to developing countries from 2010-2012, according to the European Commission. But there are no clear plans on how the bloc will help to meet a promise made in 2009 at climate talks in Copenhagen for rich nations to provide up to $100 billion annually by 2020, the report said.

"The Commission should propose a road map ... for the scaling up of climate finance towards the Copenhagen Accord 2020 target," it said, adding the European Commission has estimated the bloc's contribution should be 22-29 billion euros a year by 2020. The EU has said 20 percent of the bloc's overall budget from 2014 to 2020 will go towards initiatives to help reduce greenhouse gas emissions and adapt to the worst effects of climate change. But is unclear how much of this will be spent in the EU and how much will go to poor countries.

The report also criticised the lack of collaboration between EU member states, many of which have opted to set up their own schemes to provide climate finance.

It highlighted one case in Bangladesh where both Britain and Germany delivered two separate schemes to help supply water to the Bainpara region within a year of each other."Inadequate coordination meant that the possibility to combine support from various donors in one programme for a more cost-effective approach was not considered," the report said. The European Court of Auditors was set up in 1975 to improve EU financial management and report on the use of public funds.