There has always been a secret connection between Croatia and Austria, especially Carinthia. Throughout their tumultuous history, Croats have been ruled, among others, by Austrians, and have always looked up to Austria as the example of a well-organized country where people are decent and fair and everything is always done by the rules and by the book.
However, a look below the surface of the peaceful Carinthian day-to-day life takes us to the dark dimension of this relationship. Already in the 1980s, Croatians (then living in Yugoslavia) frequented Carinthia quite often to shop for groceries, technical products, and even cars. “I’ve always enjoyed our secret shop trips to Austria. Coming back to Rijeka and having Jens and being dressed following newest trends then was cool thing to do” said Darinka, today housewife living in Rijeka. The Yugoslav authorities tolerated that often stating that such actions contribute to using the capitalist system of the West to the profit of Yugoslavia. “My family was wealthy for those circumstances, but we were always hiding how much our father earned besides having his regular job” said Darinka.
A widely known secret at that time was that persons who didn’t trust Yugoslav banks and didn’t want the origin of their money questioned, went to Carinthia, where banks didn’t ask any questions and allowed foreigners to open the so-called secret accounts even if they didn’t reside in Austria. They didn’t ask any questions and Croats from Yugoslavia were more than happy to try to cheat their national state out of its taxes and entrust their money to someone they perceived as safe and stable. This also shows how even at that time the level of trust in national banking system and institutions in Yugoslavia was low.
When the Homeland War started in 1991, all the countries of ex-Yugoslavia were prohibited from importing weapons legally. Since Croatia needed weapons to defend itself and its citizens, the Government needed to find the way to purchase weapons in the black market. “The logical thing to do, considering the already good relations and established practice in Austrian banks, and especially in Carinthia, was to use that channel for transfers of money to be used to purchase weapons” said a confidential source.
The investigations on corruption on the highest levels in Croatia and the access to money that Croatian diaspora was sending in the 1990s to help the country defend itself, revealed that the accounts where that money has been deposited in that period were the Bawag banks in Carinthia as well as Hypo Alpe Adria Bank, a small regional bank at that time. Since the investigations conducted in Croatia lately revealed that only a few people whom the President of Croatia in the war period, Mr. Franjo Tuđman, trusted has access to those accounts, and since the investigations revealed that there was also money raised in Croatia by selling various real estate owned by the State that was transferred to those accounts. “It was clear that large sums of money have been involved” said source. Neither of the ongoing investigations revealed what really happened to the money and how it was spent, but one implication became clear in the process – during that period – small regional Austrian banks such as Hypo Alpe Adria bank started their expansion in the ex-Yugoslav countries and until the beginning of year 2000 quickly grew into some of the most influential banks in those markets.
One finds it easy to argue that this dark side the relationship has been used in relations with the highest authorities in Croatia to further the official Austrian policy of expansion of Austrian business and political influence into the countries of ex-Yugoslavia.
After the death of Jorg Heider in Austria, the story began to take shape. As Austrian newspaper from that period often quite, The Hypo Group Alpe Adria more or less acted as Jörg Haider’s house bank. The investigations initiated in Austria quickly revealed that this bank laundered more than 710 million euros in Croatia. “It needs to be taken into account that the Bank operated in Croatia with good connections with the political authorities, and were using the fact that after the war there were very few foreign investors willing to invest money in Croatia and local authorities were keen to attract some finance.” said confidential source. In that context, and in the country where corruption was something normal, the Bank was able to profit from the situation as it was at that time.
However, the beginning of the end and the beginning of the revelations of the dark side of this peaceful Austrian region was Croatia’s accession to the EU and the fact that it was the European Union who forced Croatia to deal with cases such as the one just discussed to prove that there are no untouchables when it comes to corruption.
Moreover, all that happened changed our perception of Austria as the country we can trust. In views of many they have double standards – especially in young democracies like Croatia – here they dared to do what they would have never dared in Austria. It seems that this dark side reveals the ambitions to rule this part of the world again – today via modern tools of rule – finance and economics.