The FINANCIAL — While there has been substantial progress in identifying potential impediments within the bankruptcy legal framework and improving practical implementation of the law, Croatia is committed to making further progress in line with best practices from neighbouring European countries including Austria and Germany.
To discuss further amendments of the country’s bankruptcy framework, the Croatian Ministry of Justice and the EBRD organised a roundtable discussion on “Strengthening the legal framework for bankruptcy and pre-bankruptcy proceedings in Croatia”.
Speakers included Josip Salapić, State Secretary, Ministry of Justice of the Republic of Croatia; Marie-Anne Birken, EBRD General Counsel; Vedrana Jelušić Kašić, EBRD Director, Regional Head for Croatia, Slovenia, Hungary and Slovak Republic; Jelena Madir, EBRD Director in the Legal Transition Team; and Jaime Ruiz Rocamora, EBRD Principal Counsel in the Legal Transition Team as well as representatives of the Croatian National Bank, the Ministry of Justice, the courts and law firms.
The EBRD has been working with the Croatian authorities on legal reforms for many years. Following a report on “Impediments to NPL Resolution”, published in February 2016, a workshop later that year concluded that further amendments to the bankruptcy law were needed, especially in order to encourage and strengthen out-of-court restructuring, pre-bankruptcy proceedings and the training of insolvency office holders. As a result, today’s seminar examined further steps in this direction, according to EBRD.
Marie-Anne Birken, EBRD General Counsel, said: “We welcome the engagement of the Croatian authorities to further improve the current bankruptcy legal framework in cooperation with all relevant actors in the area. The progress that has been made is encouraging and it means that Croatia’s bankruptcy law could be strengthened in a way to align it with international best practice. The EBRD stands ready to continue supporting these efforts.”
Vedrana Jelušić Kašić, EBRD Director, Regional Head for Croatia, Slovenia, Hungary and Slovak Republic, added: “This is a very important initiative that supports our newly approved strategy for Croatia which seeks to improve the business environment and raise the competitiveness of local businesses. Despite progress the level of NPLs remains high compared to the EU average. The total stock of debt of overleveraged corporates is in excess of 20 per cent of Croatia’s GDP. This impacts firms’ growth prospects, access to finance and productivity improvements. Coordinated action is needed to address this issue.”
The EBRD has been at the forefront of legal reform in the bankruptcy field. Similar initiatives are active in many countries where the EBRD invests and the Bank is engaged in Armenia, Bulgaria, Croatia, Cyprus, Greece, Hungary, Serbia, Slovenia and Ukraine in developing legal frameworks, proposing legislative amendments to tackle identified shortcomings, training insolvency office holders and commercial judges and drafting guidelines for possible solutions.
The EBRD combines investments with political dialogue under which legal transition is a key task and a core competency of the Bank. This is done through the EBRD Legal Transition Programme, an initiative to contribute to the improvement of the investment climate in the Bank’s countries of operations by helping create an investor-friendly, transparent and predictable legal environment. Activities focus on the development of legal rules and the establishment of the legal institutions and culture on which a vibrant market-based economy depends.
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