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The Government of the Republic of Serbia

In the service of citizens

Protocol on Germany's Development Aid to Serbia signed

Belgrade, 11 October 2006

Serbian Minister of International Economic Relations Milan Parivodic and German Parliamentary State Secretary at the Ministry of Economic Cooperation and Development Karin Kortmann signed today a Protocol on Germany's Development Aid to Serbia for 2006 worth €37 million.

Parivodic told a press conference that the aid consists of two parts and specified that the first one is a €23 million donation, whereas the second one is in fact technical assistance of the German Ministry of Economic Cooperation and Development worth €14 million.

He stressed that the first part of the donation will be realised through the German KfW development bank, out of which sum €9 million will be set aside for the energy sector, while the financial sector and regional funds will get €7 million each.

The Minister said that out of the sum intended for regional funds, €5 million will be used for energy efficiency development and €2 million for drafting studies and financing experts.

Parivodic recalled that the technical assistance will be realised through the German Technical Cooperation Agency and specified that €2 million will be set aside for professional education in Serbia, €2.6 million for the employment sector, €85,000 for tax system development, €1 million for municipal development and €1.5 million for the development of the Danube potential.

According to Parivodic, €6 million will be invested in regional funds as part of the technical assistance, out of which €2 million will go for the promotion of Serbia's foreign trade and another €2 million for legal counseling and modernisation of utility services.

Parivodic said he is pleased that Germany's aid to Serbia is €4 million greater than last year, adding that when it comes to assisting Serbia, Germany holds the top position because in the past six years it has helped Serbia with around €400 million.

This aid was realised in the energy sector, as well in the area of judicial reform, recalled the Minister and stressed that Serbia will probably have the €20 million debt to Germany written off, which is part of the debt to the Paris Club of creditors.

He stressed that it was agreed in the meeting that Serbia is welcome in the EU, but the country first needs to carry out reforms as precondition for EU membership.

Parivodic expressed satisfaction with the fact that Germany sees Serbia as political and economic leader on the Balkans in the future.

Kortmann said that it was agreed in the meeting that there is a mutual trust between the two countries and that bilateral cooperation is very important.

Cooperation on governmental level between Germany and Serbia is very good while parliamentary cooperation is constantly improving, she said and added that apart from political cooperation, economic cooperation is also very important. Kortmann also confirmed the interest of German businesspeople to further invest in Serbia.