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Croatia Cancels Debt For 60,000 Poorest Citizens

croatia debt forgiveness

Beginning Monday, tens of thousands of Croatia’s poorest citizens will receive an unorthodox gift: their debts will be completely eliminated.

Croatia is a fairly small Mediterranean country with just 4.4 million citizens, although it has a high number of indebted citizens which has become a significant economic burden. The country’s recession has dragged on for six years, and growth predictions for the economy this year remain low.

[quote text_size=”small” author=”– Milanka Opacic” author_title=”Deputy Prime Minister”]

We assess that this measure will be applicable to some 60,000 citizens. Thus they will be given a chance for a new start without a burden of debt.


To be eligible for the program, Coats must have debt of less than 35,000 kuna (or $5,100) with a monthly income that does not exceed 1,250 kuna ($138). Individuals who apply to have their debt erased cannot own property or have savings, according to Fox News.

The concept is being heralded as both unprecedented and exceptional, with nothing comparable ever done by a government. The program is expected to cost 210 million to 2.1 billion kuna, or $31 to $300 million. The Croatian government predicts the long-term economic benefits will greatly outweigh the short-term investment, however.

Last year, 317,000 Croats had their bank accounts frozen over bad debts. It’s estimated the plan will restore access to about 20%.

Prime Minister Zoran Milanovic convinced several cities, companies and the major telecommunications providers in Croatia — plus nine banks — to clear some of the debts. The company losses will not be refunded by the government, according to the Washington Post.

All Croats have about $4.11 billion in debt, and the program will wipe out between 1 and 7% of that amount. By reducing its citizens’ debt by less than 10%, nearly 20% of the country’s debtors will be freed of their obligations, according to the Telegraph.

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