Montenegro asks for EU help to repay Chinese loan

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The European Union is expected to help Montenegro repay a 1 billion euro ($ 1.18 billion) loan to the Import-Export Bank of China for the construction of a highway linking it to the Serbian border, the country’s deputy prime minister said on Friday. A 2014 loan for the first phase of the highway connecting the port of Bar on the Adriatic coast of Montenegro to neighboring landlocked Serbia, has an annual interest rate of 2% and a grace period of six years.

The first installment of the loan is due in 2021, but the road is still under construction. “A request was made to the financial institutions of the EU to consider (…) models of assistance to our country, in order to fight against any unhealthy foreign influence,” Abazovic told the parliamentarian.

“It is logical and responsible (…) to think of replacing such a loan with a more favorable one,” he said. Montenegro is a candidate for EU membership and a member of NATO.

The Chinese loan brought Montenegro’s debt to over 80% of economic output and helped the government raise taxes and partially freeze public sector wages in 2018 to put its finances in order. Abazovic also said the previous government loyal to longtime President Milo Djukanovic struck a “bad deal” with China.

“(The previous government) placed the country in a position of dependence on China,” he said. China is considering most of the Western Balkans, a region made up of Serbia, Montenegro, Bosnia, North Macedonia, Kosovo and Albania, as part of its One Belt, One Road initiative to open trade links with Europe.

Beijing has so far invested billions of euros in the region, mostly in the form of soft loans for infrastructure and energy projects. ($ 1 = € 0.8495)

(This story was not edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


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