Serbian government approves UAE loan

BELGRADE - The government of Serbia made a unanimous decision late on Wednesday to approve the USD 1 billion loan from the United Arab Emirates.

Owing to the loan, Serbia will save USD 40 million annually, or approximately USD 400 million over the period of ten years, Finance Minister Lazar Krstic pointed out.

"This is a good signal to the
international community and the investors, indicating the credibility of Serbia," stressed the minister.

He said that the loan carries an interest rate of two percent, its repayment is beginning six months from the date of withdrawal of money and the grace period for principal repayment is ten years.

He explained that the money will be transferred, in a single tranche, to Serbia the moment the Serbian parliament ratifies the loan arrangement, probably at the beginning of the second quarter of 2014.

Krstic said that there are no restrictions on how to spend the money and the best options are being discussed, with particular consideration for some of the expensive loans to be refinanced, or to repay at least the principal of the loans.

“Part of the money will make it possible for us to set up an economic policy that will help us overcome the social impact of the crisis and boost economic development,” Krstic said.

He added that there is no reason to meet these loan arrangements with skepticism, as they are stemming from good political relations between the two governments.

“I was skeptical, too, but now, from this point of view, I can see that none of this would have happened had it not been for the special relationship between the two governments,” the finance minister said.