April 2 (Bloomberg) -- Slovenian lawmakers approved Croatia’s entry into the European Union after the two former Yugoslav partners agreed to solve a two-decade-old bank dispute.
All 82 present in the 90-member Slovenian Parliament in the capital Ljubljana today voted to ratify Croatia’s accession, set for July 1. Croatian Prime Minister Zoran Milanovic and his foreign minister, Vesna Pusic attended the session and will comment soon.
“Croatia’s EU entry has an important message for the rest of the Balkan region as it shows that disputes can be solved if there is a will,” Prime Minister Alenka Bratusek said before the vote. “EU expansion will bring stability to the region and much-needed economic progress.”
Slovenia, which is battling its second recession since 2009 and a deepening banking crisis, is among the last EU nations to clear Croatia’s path to become a member of the world’s largest trading bloc in July. Ratification was hung up as the two nations haggled over a bank and a border dispute stemming from the breakup of Yugoslavia in 1991.
“Ratification is an excellent piece of news as there are strong political, economic and security reasons that the two countries should have good relations,” Branko Caratan, a political scientist at the University of Zagreb, said by phone. “This is also a message to other countries in the region that neighbors should work out problems through cooperation, with long-term interests in mind.”
Of the 27 EU members, 22 others completed the approval process, while Germany, Denmark, Belgium and the Netherlands have started the procedure.
Slovenia had threatened a veto if the two nations failed to reach an agreement over 270 million euros ($345 million) owed to Croatian savers by the predecessor of Nova Ljubljanska Banka d.d. The countries agreed to approach the Bank for International Settlements for helping resolve the bank issue.
The rift was further compounded by a political crisis in Slovenia that led to Bratusek replacing former Premier Janez Jansa in a Feb. 27 vote.
Slovenian companies like retailer Mercator Poslovni Sistem d.d. and Croatia’s Agrokor d.d. as well as others could benefit from Croatia’s pending membership, Andraz Grahek, an analyst from Capital Genetics in Ljubljana, said in a phone interview.
“Both nations can expect closer business ties in all areas, including the exports of Slovenian products to Croatia, which won’t be part of the customs tariffs and other limitations anymore,” Grahek said. “There could also be much more cooperation in the financial industry as we are already seeing increased interests from Croatian institutional investors for shares of Slovenian companies like Triglav insurer or energy group Petrol.”
Agrokor d.d., Croatia’s largest company, in February submitted an offer to purchase a 53 percent holding in Mercator as the Slovenian company shareholders seek to sell their holdings. Nova Ljubljanska Banka d.d. and Pivovarna Lasko Group are among the biggest investors in Mercator.
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