Government borrows 250 million euros for budget

Serbian Government has decided to take out a commercial loan of 0.25 billion euros from the business banks in order to cover the budget deficit and settle debts.

If the Serbian Parliament adopts the Government's Bill, the state will take out the loan with the interest rate of over 5%.

- The loan repayment period is five years, including the grace period of 12 months - it is published on the website of the Government.

If the Parliament adopts the Bill, Serbia will borrow the money from KBC Banka, Nova Kreditna Banka Maribor, Eurobank EFG, Vojvodjanska Bank, Hypo Alpe Adria Bank, and Erste Bank, as well as from the banks that have submitted a joint bid: Intesa, UniCredit, Raiffeisen and Societe Generale.

Interest rates are not the same for all banks. Namely, the reference interest rate (EURIBOR) is increased by the margin of KBC Banka in amount of 4.25%, the margin of 5% of Nova Kreditna Banka Maribor, Eurobank EFG's margin of 5.2%, the margin of Vojvodjanska Banka in amount of 5.25%, the margin of 5.3% of Hypo Alpe Adria Bank and Erste Bank, which is also the margin of the banks that have submitted the joint bid.

The plan is that one credit party of 10 million euros be taken from KBC Banka, one from Nova Kreditna Banka Maribor and one from Eurobank EFG, that Vojvodjanska Bank and Hypo Bank grant two loans of 20 million euros each, while Erste Bank should approve a total of 30 million euros in three loans of 10m each.

Serbia plans to take out a loan of 140 million euros from Intesa, UniCredit, Raiffeisen and Societe Generale Bank, which have submitted the joint bid, in 14 parties of 10m each.

The loan processing costs amount to 0.5% of the total amount, and it will be repaid every six months.