Serbian minister questions foreign debt servicing by future state.

(From BBC Monitoring International Reports)

debts" by Serbian newspaper Glas javnosti on 27 November

Belgrade - Although the manner of electing the members of parliament of the future union of Serbia and Montenegro is the key issue in the drawing up of a [draft] constitutional charter, there is another, probably even more important issue, about which not much is being said in public - who will cover the country's outstanding debt? We are talking about the external debt and the clear signals that we have received in connection with them so far. Montenegro has been late three times in meeting its share of the common obligations this year, a year when only modest sums have to be paid as interest to the World Bank and some Paris Club creditors. There have been no common consequences as a result of the delay, but common consequences are regrettably possible. Large repayments await us in two to three years.

Three things are important at this point. Firstly, how to divide the outstanding debt, for instance, those to the London Club, as a group of creditors with whom no debt-rescheduling talks have yet been held and to whom the common state has offered guarantees, that is, a kind of solidarity guarantees. That means that the division of obligations will not at all be easy, at least not at first. Secondly, the [future] union of Serbia and Montenegro will be a member of the IMF, the World Bank, and the European Investment Bank, and not Serbia and Montenegro separately, as the named international organizations deal with [independent] states. Thirdly those institutions will surely not change their rules because of the structure that the [future] common state of Serbia and Montenegro will have.

Bearing all the aforesaid in mind, Serbian Finance Minister Bozidar Djelic has said that a flexible solution will have ...