Bosnian Serbs Seek Russian Loan to Replace IMF

Republika Srpska Finance Minister Zoran Tegeltija on April 2 said the entity was still negotiating the terms of a Russian loan, which will hopefully supplant the need to go cap in hand to the IMF.

“The negotiations are being led, but not all conditions of the credit or the deadlines have been defined,” Tegeltija said.

“We knew that we would have problems with the IMF in 2014,” he said. “Already in 2013 the IMF started setting political conditions, which until then had not been part of the letter of intention.”

Jumping the gun, the President of Republika Srpska, Milorad Dodik, recently claimed the Russian credit for Republika Srpska was a done deal.

The first advance of 70 million euro was on its way and another 200 million euro would soon follow, he said.

Both of Bosnia's entities have been counting on IMF cash to bridge respective budget divides. Both both failed to complete some of the conditions, such as adoption of a number of laws, however.

Opposition parties in Republika Srpska greeted the announcement of the Russian credit with caution.

“If Russia offers a oan for the long term, so that we can repay the unfavourable short-term credits of the IMF and commercial banks, that would be good,” said Branislav Borenovic, of the opposition Party of Democratic Progress.

“But, if it is used to cover the ongoing deficit, and the old credits remain, that is stupid,” he added.

Borenovic recalled that the entity government had abolished limits on borrowing and said he feared debts could soar.

“From this year, for the next five to six years, every year at least some 500 to 600 million KM [250 to 300 million euro] will go to returning loans,” he...