KOSTIC: IMF to enable greater borrowing

At the economic summit in Becici, president of MK Group, Miodrag Kostic, requested IMF to allow greater borrowing to countries in the region so that they would be able to use the funds for capital investments.

- Some developed countries have 220% of public debt compared to GDP, and IMF is constantly putting framework at 60 or 70% to countries in the region – Kostic said, addressing from the audience representative of that international financial institutions for Central and Eastern Europe- Bas Baker.

- My question is if you think it is good to impose this kind of framework to countries and finance ministers in the present time, to keep such a low level of debt. Croatia and Montenegro have an average repayment deadline of four years which is a disaster – Kostic said.

He estimated IMF should extend their framework and enable them to borrow at 10, 15, or 20 years and that they spend the funds on capital investments, primarily on infrastructure projects, such as investments in roads, railways, airports and similar.

Baker said he agrees with the idea, but that money should not be used for greater government spending as well as that it would be a bad decision in case if the region would be hit by a new financial crisis.

Kostic asked whether IMF can help to extend maturity of existing loans, and Baker said that certainly longer periods are safer than shorter ones.

- In general, it is a good idea and repayment deadlines can be extended but then it is more expensive – Baker added.

MK Group d.o.o. Beograd

Međunarodni monetarni fond-MMF Beograd

MK grup

Miodrag Kostić

Bas Baker

Samit ministara finansija guvernera i direktora poreskih uprava

Bečići