Djogovic: UAE loan should be used to cut debt

BELGRADE - Serbia should use the USD 1 billion loan granted by the United Arab Emirates (UAE) to pay back expensive loans and launch reforms, economist Sasa Djogovic of the Belgrade Institute for Market Research (IZIT) stated on Thursday.

We received a loan from UAE on more favourable terms than currently available on the market, Djogovic told a news conference.

The UAE loan envisages interest rate of two percent while the interest rate on market conditions adds up to six percent, he said.

Djogovic warned that it is high time to launch reforms because there is no longer any manoeuvre place for additional loan takeout.

The new government needs commit itself to implementation of reforms and four years will not be enough for this, but a social and economic perspective may be created, Djogovic said.

Serbian Finance Minister Lazar Krstic will sign the agreement on the loan in Abu Dhabi on Thursday.

Krstic said that there are no conditions for the usage of the funds and that best options are being discussed, primarily in terms of the potential room for refinancing some of the expensive loans or paying back at least three principals.

Photo sxc.hu/yokayo (illustration)