Croatia, Slovenia find solution over bank row: PM

Croatia and Slovenia have agreed to resolve a long-standing banking row that has threatened to hold up Zagreb's EU admission, Croatian Prime Minister Zoran Milanovic said on Thursday.

"We have agreed with our Slovenian colleagues to bring the story on (Croatia's EU treaty) ratification to an end," Milanovic told a government session.

"Now we have effectively removed this obstacle for our EU entry" which is due to take place in July, he added.

Around 430,000 Croatians held accounts in Slovenia's Ljubljanska Banka (LB) before the former Yugoslavia collapsed in the 1990s and the bank closed down its operations in Croatia.

Croatia wanted Slovenia's state-owned Nova Ljubljanska Banka, the successor to the LB, to stump up 270 million euros ($352 million) to cover deposits Zagreb paid back to most account holders in the 1990s.

Milanovic said he would sign the agreement with outgoing Slovenian Prime Minister Janez Jansa on Monday in Mokrice, Slovenia.

In Ljubljana, Jansa said the agreement was a compromise that "meets Slovenia's key interest to bring talks over the bank savings back to the negotiations on the distribution of former Yugoslavia's wealth."

"At the same time Croatia will achieve its main objective which is speeding up the EU treaty's ratification process," Jansa told reporters.

In late February, Jansa's government was ousted in a no-confidence motion handing centre-left opposition leader Alenka Bratusek the task of forming a new government.

Jansa's loss of a parliamentary majority had threatened to delay a deal and ratification of Croatia's EU accession treaty.

Croatia is set to become the European Union's 28th member on July 1, but it still needs all member states to ratify its accession agreement.

So far 21 EU members have ratified the treaty.