Anyone know what Croatia still owes?
Over HALF of Serbia's remaining debt is to be written off, and then the rest is to be paid back at very low rates -- initially 3.75 percent for 5 years and then 6.75 percent for 15 years. In the end, it will only owe just over $1 billion.
This is of course on top of previous debt write-offs.
The London Club initially offered a 20% write-off. See what good negotiation gets you?
Hilariously, Serbia might be issuing bonds on European markets.
Anyone know what Croatia is paying or how much it still owes?
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London Club to Write Off Serbian Debt
By MISHA SAVIC
.c The Associated Press
BELGRADE, Serbia-Montenegro (AP) - The London Club has agreed to write off more than half of Serbia's $2.8 billion debt to the group and reschedule payments on the remainder over the next 20 years, the government said Friday.
Finance Minister Mladjan Dinkic said the interest rate for the remaining debt of $1.08 billion would be an annual 3.75 percent over the first five years, and 6.75 percent for the following 15 years.
``This is a huge relief for our economy,'' Dinkic said in announcing the write-off of about $1.7 billion in debt.
The deal with the group of commercial lenders came nearly three years after Serbia-Montenegro, the Balkan union formerly known as Yugoslavia, agreed with the Paris Club of sovereign lenders to slash the $4.4 billion owed by the country by 66 percent. The Paris Club, a 19-nation group, deals with loans underwritten by state guarantees.
But negotiations with the commercial lenders of the London Club were much tougher, Dinkic said, because Serbia insisted ``on conditions it could endure.'' The London Club's initial offer was only a 20 percent write-off.
A deal was eventually reached after ``very intense'' talks this year, and should help cut the republic's overall external debt to 60 percent of gross domestic product, Dinkic said.
A worse debt ratio would exclude Serbia from joining the European Union, as it aspires to do, he said.
``We have now fully sorted out our relations'' with major foreign lenders, Dinkic said triumphantly, adding that the agreement with the London Club would take effect in a few months after its ratification in Serbia's parliament.
Serbia's economic recovery, however, could be marred by other factors including a soaring trade deficit likely to total $6.8 billion by the end of this year - an increase of more than $2 billion compared to 2003, the Belgrade-based Institute for Market Research said Friday.
The institute also said inflation would likely reach an annual rate of 10.7 percent by the end of 2004, though earlier predictions had said it would not exceed 9.5 percent.
The Serb economy was all but ruined during the 1990s rule of former leader Slobodan Milosevic, whose belligerent policies led to punitive international sanctions.
When he was ousted in 2000, Serbia's external debt stood at nearly 150 percent of the republic's GDP. The bulk of the burden was built up during the 1980s, when Serbia was part of the former Yugoslavia.
``We are now a financially normal state,'' Dinkic said, adding that Serbia might start issuing bonds on the European markets as soon as next year.
07/02/04 10:51 EDT
Copyright 2003 The Associated Press.