Serbia is not facing debt crisis, Finance Minister Djelic says

Serbian Minister of Economy and Finance Bozidar Djelic said that Serbia will not fall into a debt crisis after 2006 when the country is due to start repaying large portions of its outstanding debt if it manages to boost exports.

The ministries of finance and economy, energy and mining, and natural resources and environmental protection have launched an initiative to write off €450 million of Serbia’s debt to the Paris Club of creditors and redirect the funds to the Enefek Fund, said Djelic.

The funding will be used to support energy efficiency projects and environmental protection, said Djelic, adding that the government has sent an official request for the setting up of the Enefek Fund to all ministers of finance that claim receivables from Serbia within the Paris Club.

The Minister also welcomed an initiative of the German government to write off €30 million of Serbia’s debt to Germany and use the funding for poverty reduction programmes.

According to Djelic, a government delegation, headed by National Bank of Serbia Vice Governor Radovan Jelasic, will visit Paris next week to discuss the setting up of the Enefek Fund with Paris Club officials.

Referring to the government’s negotiations with the Russian Federation on Russia’s clearing debt to former Yugoslav republics, Djelic said that Serbia and Montenegro claims 38 percent or 491 million of the total debt of 1.3 billion ‘clearing dollars’, a unit used in communist times to avoid money transfers between the Soviet Union and its socialist trading partners.

The two sides are to meet in late June to establish the value of the clearing dollar. Russia believes that the clearing dollar should be valued at half of the real dollar and that Serbia’s old gas debt of $260 million should be valued at 100 percent of the dollar, said Djelic.

The Minister also said that officials of the World Bank, the European Union, donors and international financial organisations will meet in Brussels on June 19 to discuss a donors’ conference for Serbia and Montenegro.