Croatia debt relief scheme

Starting on Monday, Croats whose bank accounts have been blocked for more than a year and whose debt is lower than 35,000 kunas (4,500 euros, $5,300) can apply to the state-run Financial Agency to have their debt written off as part of a scheme called "Fresh Start."

The measure comes ahead of parliamentary elections scheduled for later this year. To be eligible, people should be either receiving social welfare or have a monthly income of no more than 166 euros. They must also have no savings or second home. Applications must be submitted by the end of June.

"This is an emergency measure, the system cannot rely constantly on such moves .... [but] we are doing everything possible to facilitate the lives of people affected by this long and exhausting crisis," Prime Minister Zoran Milanovic said of the scheme.

The Croatian economy is still one of the EU's poorest, unemployment stands at almost 20 percent, and growth is forecast to come in at a paltry 0.5 percent this year. Croatia joined the EU in 2013 hoping for an economic boost, which has not materialized. Experts blame an inflated and inefficient public sector as well as a tough business climate.

Public as well as private creditors are taking part in the scheme, the Croatian government said on its website. The program is endorsed by telecommunication operators, big cities, banks and public enterprises. It may be extended to other agents, such as local councils.

ng/rc (AFP, AP, dpa)