Some of the poorest households in Croatia are to benefit from a debt-forgiveness scheme mounted by the Zagreb government.
The unprecedented initiative, in which around 60,000 citizens will have their debts written-off, is hoped will boost the economy by helping people regain access to facilities.
Under the “fresh start” scheme about £20m worth of bad debt is expected to be erased by creditors who have joined, including banks, telecom companies and utility firms. None will be reimbursed for their losses.
Access to the programme is for those with debts lower than £3,500 with a household income below £125. Property owners and those with any savings will not be eligible.
Last July banks froze 317,000 accounts due to bad debts. The programme could unlock about 20% of these.
The move will be watched by the new Syriza government in Greece as well as the markets amid concerns that Greece could write off billions of euros in household loans.
Croatia joined the European Union in July 2013 and Nato in 2009.
