Bosnia eyes new stand-by deal with IMF

Bosnia and Herzegovina may soon conclude a new long-term agreement with the International Monetary Fund which will make 500-600 million euros available to the country for its efforts to stabilise the two entities' budgets and continue the current reforms, according to statements from Bosnia's state Finance Minister Vjekoslav Bevanda.

"We have met all conditions for the negotiations and I believe that it is cheaper to take a loan from the IMF than to issue treasury notes and bonds. I believe that we can be given a half a billion euros under a stand-by arrangement," Bevanda was quoted by the Dnevni Avaz daily newspaper as saying on Friday.

The key prerequisite set by the international lender for new negotiations on a stand-by arrangement has been the adoption of new labour laws in the country's two entities: the Croat-Bosniak Federation and the Serb entity.

The legislation giving employers more flexibility in hiring and sacking workers and reducing some workers' rights was passed by the Federation's parliament in June 2015 and by the Serb entity's legislature in late December.

The Croat-Bosniak entity Finance Minister, Jelka Milicevic, was quoted by the local media as saying that IMF negotiators would likely arrive in the country for talks in the second half of this month.

Milicevic is hopeful that the negotiations will result in the allocation of up to 1.2 billion convertible marks (613 million euros) to help the two entities to patch their budget holes and to create opportunities to implement development projects in order to improve employment.

Bosnia's current jobless rate is above 27%, one of the highest rates in Europe.

To date, Bosnia-Herzegovina and the IMF have concluded four stand-by arrangements whose value is over EUR 2.2 billion. However, the last one, concluded in 2012, was practically called off in late 2014 due to a lack of progress in reforms amid frequent political stand-offs.

Those four agreements have been signed for a period of two years, and Milicevic said that Sarajevo planned to reach a four-year extended agreement at the following negotiations.

Last update: Fri, 08/01/2016 - 13:16
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