Croatia Pushes Ahead With Writing Off Debts

Croatia's government, headed by the Minister of Social Policies and Youth, Milanka Opacic, is pushing ahead with drafting a decree that will scrap the poorest people's debts to banks, communal services and telecommunications firms.

After revising an initial decision to axe debts of up to 1,300 euro, the government has raised the amount it intends to wipe off up to 3,250 euro per person.

The first plan envisaged writing off debts up to 1,300 euro for around 190,000 citizens, worth a total of 110 million euro.

The government has now lifted the limit to 3,250 euro per person, but has tightened the critera for receiving a debt write-off.

Only people without any assets in terms of property and bank deposits, and who have had the debts for over a year, can apply for a write-off. Debtors must be unemployed for over two years, or on pensions less than 325 euro a month.

The calculations suggest around 60,000 debtors in Croatia fall within these limits, far less than the 190,000 originally estimated as eligible.

The total number of debtors who can apply for the scheme will only be known for sure once when decree comes into force.

The government's idea is to resolve the plight of people who are manifestly in no position to pay off their debts and whose bank accounts have been or are likely to be blocked - which will make it impossible for them to receive their wages, if they are re-employed.

Some 318,000 Croatian citizens had their accounts blocked by September, and their debts total around 3.8 billion euro.