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Croatia: Repayment Of State Debt To Pensioners To Cost €1.4 Billion In Eight Years

The repayment of the state debt to pensioners is estimated to take HRK7.76 billion (€1.06 billion) over eight years and the interest to be paid amounts to HRK 2.3 billion, the daily Novi list reported quoting official information from HPB Invest, which manages the pensioners fund.

The repayment of the state debt to pensioners is estimated to take HRK7.76 billion (€1.06 billion) over eight years and the interest to be paid amounts to HRK 2.3 billion, the daily Novi list reported quoting official information from HPB Invest, which manages the pensioners fund. HPB Invest added that HRK3.7 billion would be paid to pensioners who chose to get fast repayment over two years of half of their claims, while HRK3 billion would be paid to pensioners who chose to get the full sum of the debt but over a period of six years. Of the total number of pensioner who have the right to debt repayment (some 436,000), 97,600 chose to get all of their money back while 291,895 chose fast repayment.  This year alone, the state should pay HRK1.85 billion in two installments to pensioners who chose to get fast repayment. The total state debt to pensioners is estimated at over HRK11 billion (€490 million) and it was accumulated in the period 1993-1998 due to the failure of the governments to adjust the pensions in line with the existing laws. Its repayment is considered to be one of the biggest challenges to the fiscal consolidation efforts. In July last year, the government adopted a law, which stipulated the establishment of a pensioners' fund, which is the vehicle for the debt repayment.

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