International Information Centre for Balkan Studies

Serbian government uses Eurobond issue to repay 2011 loan

September 28, 2021

The Serbian Finance Ministry said on Tuesday that most of money from the recent Eurobond issue was used to repay a 2011 loan.

A press release said that the Eurobond issue brought in 750 million Euro at an annual interest rate of 2.05 percent and added that 725 million Dollars of that amount was used to repay the old loan which came with an interest rate of 7.25 percent.

It quoted Finance Minister Sinisa Mali as saying that the loan was taken out by the government before his Serbian Progressive Party (SNS) took power, adding that the debt was 700 million Dollars with 25 million in interest. “We took care of that debt from 2011 today… The state was forced to impose difficult fiscal consolidation measures to prevent total collapse,” the minister said.

According to the minister, the money from the Eurobond issue came with better than ever conditions. He said that the country still has to repay loans to European and global financial institutions and foreign governments which were taken out in the 1970s and 1980s at very high interest rates, adding that Serbia will be repaying those debts for another 20 years.

The Serbian opposition has been saying that the country’s foreign debt now stands higher than Yugoslavia’s foreign debt and that the debt limits defined under Serbian law have been exceeded.

Source:  https://rs.n1info.com/english/news/serbian-government-uses-eurobond-issue-to-repay-2011-loan/

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