Serbia to continue paying Tito’s debt for another 22 years

Serbian taxpayers will continue paying off the debts accumulated during the reign of President Tito over former Yugoslavia for another 22 years.

The last installment of the loans taken by the Yugoslav government in the 1970s and 1980s is due in 2031 and 2041, with the total amount payable exceeding 1.7 billion euro.

Serbia will be Yugoslav debt free when today’s young generations turn 40 and when today’s many high-ranking officials are retired.

Judging by the previous experience, by the time Serbia pays off all Yugoslav debts, it will probably change eight more governments, which is how many governments the country has had since the year 2000.

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Serbia owes 1.7 billion euro of “old” loans, mostly to the Paris Club creditors, from which Yugoslavia borrowed 4 billion euro four decades ago. Serbia also owes 1.8 billion euro of Yugoslav debt to the World Bank, or rather its IBRD branch, and substantial amounts of money to both China and Kuwait, all dating back to the time of the former Yugoslavia.

The National Bank of Serbia says that our country will be repaying the debt from the 1970s and 1980s for another twenty years. The NBS also points out that the last debt, the one owed to the Paris Club, will be settled in 2041.

We owe the Paris Club creditors exactly 1.09 billion euro, which means that for the next 22 years we will repay on average 49.5 million euro annually. The NBS adds that, in the next 12 years, we will have to pay the money owed to the World Bank, which stands at just over 700 million euro. The last installment of loan taken from China in 1999 is due to be paid in two years, while the loan taken in 1989 by prime ministers Milka Planinc and Branko Mikulic will be fully settled in 15 years’ time.

Commenting on these loans, Serbian Finance Minister, Sinisa Mali says that Serbia does not lag behind payment of any of those loans.

On the other hand, unlike Serbia, Croatia and Slovenia need not worry about paying their debts, accumulated during Tito’s reign.

The Croats settled their debt toward the Paris Club and the London Club ten years ago. Croatia repaid the last installment of 192 million dollars in 2008 to the Paris Club and to 78 million dollars to the London Club, a year later.

Croatia has also settled its old debt towards the World Bank and the European Investment Bank. Slovenia followed suit and paid their debt of 525 million dollars in 1995.

Milosevic’s debt

Compared to billions of euros of loans taken during the time of the Socialist Federal Republic of Yugoslavia in the 1970s and 1980s, the State Union of Serbia and Montenegro (the official successor of Yugoslavia) borrowed close to 400 million euro during Slobodan Milosevic’s rule to mitigate the consequences of the economic sanctions in the 1990s.

“During Milosevic’s reign, Western countries were strictly forbidden to cooperate with Serbia under the threat of severe penalties”, economy expert Mladjan Kovacevic says.

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(Blic, 10.02.2019)



This post is also available in: Italiano

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