May 28, 2015 / 4:11 PM / 3 years ago

Slovenia to repay Ljubljanska Banka depositors 385 mln euros

LJUBLJANA, May 28 (Reuters) - Slovenia expects to spend some 385 million euros repaying depositors of a now-defunct bank who lost their savings when Yugoslavia collapsed in 1991, the finance ministry said on Thursday.

The repayment, which will mostly take place in 2016 and 2017, comes after the European Court of Human Rights ended 20 years of litigation by ruling in 2014 that Slovenia must reimburse clients of the Ljubljanska Banka.

The bank’s units in Croatia and Bosnia closed their doors when Slovenia declared independence in 1991 without repaying the savings of some 300,000 depositors outside Slovenia.

“Slovenia disagrees with the verdict but has pledged to respect it anyway,” Irena Sodin, state secretary at the finance ministry told a news conference after a weekly cabinet meeting.

Slovenia had argued that repaying the bank’s depositors should be part of succession talks of the states of the former Yugoslavia which have not been completed yet.

Sodin said total unpaid deposits amounted to an estimated 257 million euros while repayment will reach a total of 385 million euros when including interest and costs.

“The depositors whose claims will be easily verified will be reimbursed (as soon as) 2016,” Sodin said.

Slovenia, which joined the euro zone in 2007, the first former communist state to do so, is struggling to reduce its budget deficit to below 3 percent of GDP this year, in line with European Union rules, from 4.9 percent in 2014.

The repayment of depositors will be a further strain on the budget in 2016, when the government hopes to reduce the deficit further to 2.4 percent of GDP.

Reporting by Marja Novak; Editing by Catherine Evans

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