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Greece ready to support initiative to write-off Serbia’s debt to Paris club

Belgrade/Athens, 2 June 2006

Serbian Minister of Finance Mladjan Dinkic, who is on an official visit to Greece, said today that Greece is ready to provide diplomatic support to the Serbian government in an effort to convince creditors of the Paris club to write off $1 billion debt.

Mladjan Dinkic

Dinkic said that he met today with Greek Minister of Foreign Affairs Dora Bakoyannis and Minister of Finance and Economy George Alogoskoufis. Dinkic presented Belgrade’s official initiative that Serbia will formally send to creditors of the Paris club in a month’s time. The initiative has the backing of Serbian Prime Minister Vojislav Kostunica and Serbian President Boris Tadic.

According to Dinkic, the money that the Paris club would write off would be used to complete Corridor 10 in southern Serbia whereas part of the funds would be invested in infrastructure in Serbia’s underdeveloped municipalities as well as in environment protection projects.

The Minister confirmed that the government already received preliminary consent from the World Bank for this initiative and repeated that, if the Paris club agrees to this, the money invested in transport would mean great developmental potential not just for Serbia but also for the whole of South Eastern Europe, including Greece.

In this sense, the €230 million that Athens should set aside as part of the Hellenic Plan for the Economic Reconstruction of the Balkans (HIPERB), could be used as additional funds along with the ones Serbia would set aside, said Dinkic, adding that he insisted that the Hellenic Plan starts as soon as possible.

Dinkic said that he also discussed the course of the Kosovo talks with Dora Bakoyannis, adding that they agreed that a phased approach would be the best solution in this case. He explained that it would be best if talks on decentralisation in Kosovo be concluded by summer, as well as solving other issues regarding the protection of orthodox monasteries and churches in the province. Serbia expects considerable support of Greece in this matter, added Dinkic.

The Minister said that during the talks in Vienna, $1.07 billion of the so-called "Kosovo debt" should be redirected to the Kosovo interim authorities, since Serbia is not the one collecting taxes in the province.

Dinkic said that during the meeting it was also mentioned that bilateral relations require a change in the visa regime, that is its abolishment in the upcoming period.

He said that at the meeting with Alogoskoufis, they also discussed the conclusion of the bilateral agreement to avoid double taxation between Serbia and Greece, as well as the signing of a contract on the cooperation of the countries' tax administrations, having in mind that their economic cooperation is intensifying and the number of tax payers increasing.

Minister Dinkic met in Athens with members of the Serbian-Greek business council, who agreed with him that the business climate has considerably improved and that the number of Greek companies interested in investing in Serbia is increasing. The presence of 80 Greek companies in Serbia and %euro;1.2 billion of Greek investments prove this is true, concluded Dinkic.