In the next four years, the state must repay EUR 2.6 billion of old debts

In the next four years, the state must repay EUR 2.65 billion of old debts, and it is not yet known how the money will be provided for that.
In the Ministry of Finance, they said that the biggest liabilities are due to government bonds that are coming due, while economists warn that the state, without economic development and a reduction in public spending, will enter into new, expensive debts.
At the end of last year, the public debt of Montenegro was EUR 4.1 billion, which, in addition to the state, also includes municipal debts. In the Ministry of Finance, they stated that in three months of this year they managed to pay off 44 million EUR of old obligations, but also to borrow 100 million from Deutsche Bank.
At the moment, we owe the most to banks and buyers of Montenegrin bonds.
– The largest liabilities are liabilities based on Eurobonds in the amount of EUR 1.75 billion, liabilities to commercial banks in the amount of 420 million and liabilities to the Exim China Bank for the highway – stated the representative of the Ministry, Svetlana Vukićević.
In the next four years, Montenegro needs to repay EUR 2.65 billion of old debts, while by 2025, more than EUR 300 million will be spent on interest alone.
– Repayment in 2024 is 537 million, in 2025, when we have a euro bond of 500 million, we have 855 million repayments and in 2026, that is the year when we are relaxed from bonds, the debt repayment is 306 million, however, in 2027 we are expecting a significant jump due to the debt from 2020 and there is a debt of 950 million – states Vukićević.
From which sources we will finance debts and regular obligations are questions that no one dares to answer for now
Economists warn that it is not in the country’s favor that public spending has been increasing in recent years, as well as the fact that we do not have long-term management of public finances.
– When you have an increase in wages, you put the country in a situation where it cannot repay the debts that come to us in the coming period. It seems to me that in the next six years we will have to return one of Montenegro’s gross domestic product (GDP) just to repay the debts – said economic analyst Mirza Mulešković.
That, he said, clearly shows that we will have to start the economy in order to regularly service all repayments.
– If we were to talk about how we will return it all, the only way if we want to sustainably manage public finances is the development of the economy. In case it doesn’t come to that? In case that does not happen, we will have to have new responsibilities – Mulesković said.
The most indebted countries of the European Union are Greece, Italy and Spain, whose public debt is far above the Maastricht criteria of 60 percent of gross domestic product. Montenegro’s public debt is 70.7% of GDP, and Mulešković does not rule out cooperation with the International Monetary Fund (IMF) in order to reduce debt and spending.

Sign up for business news updates & special reports.