Croatia's Swiss Franc Borrowers Savour Victory Over Banks

Croats stuck with huge debts over loans taken out in Swiss Francs are celebrating a final court ruling in their favour on Wednesday - confirming an initial verdict five years ago.

"This is an example of the battle between David and Goliath. A small David with vision and faith can defeat the giant," Ines Bojic, the lawyer for the Franak Association, which filed the lawsuit against eight banks, said.

The High Commercial Court in Zagreb on Wednesday dismissed the appeals of the banks in the case of loans taken out in Swiss francs, ruling that the currency exchange clause in the case of franc-indexed loans was now nullified.

The Franak Association has been lobbying for years for the rights of people with loans in Swiss francs in cooperation with Croatia's Consumer Protection Association, UZP.

Around 120,000 Croatians took out loans pegged to the franc between 2005 and 2008, attracted by the lower interest rates.

They faced disaster after the franc unexpectedly soared in value after the 2008 global economic crisis, leading to a sharp rise in their monthly instalment payments.

Economists, lawyers, mathematicians, political scientists and other people then banded together on the Internet, and decided to take action to improve their position and force the banks to convert the loans into loans in the national currency.

Following the latest court ruling, the Croatian borrowers can now file lawsuits against the banks individually, seeking annulment of their loan contracts.

Consumer rights groups had demanded that the banks help borrowers by lowering the interest rates, but the banks refused.

The Franak Association then launched legal action against Raiffeisen, Hypo Alpe Adria, Zagrebacka, Privredna, Erste, OTP, Splitska...