Vujovic: More control over public enterprises’ borrowing

The amendments to the Public Debt Law currently debated by the Serbian parliament provide for the government no longer issuing guarantees for liquidity loans to public enterprises, Serbian Finance Minister Dusan Vujovic said Tuesday

The minister told state-run Radio Television of Serbia (RTS) that the amendments would stop the practice of public enterprises taking loans when they cannot collect liabilities owed to them and then failing to pay back the government-guaranteed loans but rather causing the debt service guarantees to be activated, the loans having then to be repaid with funds from the budget.

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Vujovic added that the Budget System Law had already set out certain restrictions, and the amendments provided for additional measures to prevent the budget money from being used to maintain liquidity of public enterprises.

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“Guarantees for long-term loans - the possibility to issue loan guarantees to projects implemented by the enterprises such as the Electric Power industry of Serbia and the Serbian Railways, such as organizational restructuring, rolling stock overhaul, and railways infrastructure, aligning with European standards - will remain,” the Finance Ministry quoted Vujovic as saying in a release.

(Telegraf.co.uk/ Tanjug)