Signals Financial Independence from Yugoslavia
ZAGREB, April 27 (Reuters) — Croatia has reached agreement with foreign creditors to reschedule its commercial debt, the state news agency HINA said on Saturday quoting Prime Minister Zlatko Matesa. "This is a huge success for the Croatian state and the government because it represents final financial independence from the former country (federal Yugoslavia)," Matesa said.He said Croatia severed all financial ties that could handicap its presence on the international money market. HINA said the pact between Croatia and London Club creditor banks was reached on Friday in New York. Details on the amount of debt affected will be given by Finance Minister Bozo Prka upon his return from New York, Matesa said. There was no immediate comment from creditors.
Croatia had to secure the agreement of two-thirds of its creditors for the accord to be valid.
HINA quoted Matesa as saying the agreement included rescheduling of both the principal and arrears on the debt. The principal was said to have been rescheduled over 14 years with the grace period of three-and-a-half years and arrears over a 10-year span.
Matesa said the government would issue bonds in two tranches to cover the debt and he hoped they would be listed on the international money market. The agreement was seen to be "so favorable that it will boost economic growth and restructuring of the Croatian economy," HINA quoted him as saying. It was also agreed to exclude all Serbian creditors estimated to hold $700 million, similiar to a deal reached between Slovenia and commercial creditors earlier this year.
The federal government of rump Yugoslavia, now comprising only Serbia and Montenegro after the 1991-92 secession of four republics including Croatia, recently filed a lawsuit against the Slovenia accord. By the time the country broke up, it owed foreign creditors just over $4 billion of which Slovenia has now agreed to pick up 18 percent. Croatia was expected to announce it will cover a further 29.5 percent, bankers said earlier.
Croatia was spurred into action by the possibility that the republics of Serbia and Montenegro could undermine any agreement if it is not done soon. One banker estimated that Belgrade has managed to accumulate 25 percent of former Yugoslav debt already and might not find it too difficult to raise enough votes to block agreements with the other republics. Belgrade's complaint is that Slovenia and Croatia are refusing to include it in their rescheduled debt payments.
Berserkistan is a world news service of Michael Linder Productions, Inc.
©1995-1996, All Rights Reserved
