PODGORICA (Montenegro), April 27 (SeeNews) – Montenegro's economic development minister Jakov Milatovic said his country is in talks with the European Union for the potential refinancing of a 1 billion euro ($1.2 billion) loan from the Export-Import Bank of China (Exim Bank), Croatian media reported.
"Negotiations are underway with China to delay the repayment of the principal, which is supposed to start in the summer of 2021. We are also negotiating with the EU institutions to refinance this loan with cheaper European loans," Croatian public broadcaster HRT quoted Milatovic as saying in an interview on Monday.
Last month, Montenegro's deputy prime minister Dritan Abazovic called on the EU to help the country repay the loan in a step intended to curb Chinese influence.
"In the case of a dispute with the Chinese, the Montenegrin parliament does not arbitrate. According to Chinese courts, if China is dissatisfied with the dynamics of payment, it can demand payment of the entire principal. If that does not happen, they could take the port of Bar, part of our territory, maybe even our railways," HRT quoted Milatovic as saying.
EU spokesman Peter Stano said earlier this month the bloc will not pay off Montenegro's debts to third parties, but has concerns over the social, economic and financial effects of some of China's investments. The stance of Brussels drew fire from the EU rapporteur for Kosovo, Viola von Cramon-Taubadel, who said the decision to deny support to Montenegro in the repayment of the loan does not look smart from a strategic point of view, as the country's new government needs to clean up the financial heritage of leaders such as Milo Djukanovic.
In 2014, Montenegro signed an agreement to take out a $944 million loan from China's Exim Bank at an annual interest rate of 2% and with a six-year grace period for the construction of a motorway that would link the port of Bar to the border with Serbia.
"The credit represents one-third of our debt," Abazovic told the EU Committee on Foreign Affairs in the European Parliament in March.
($ = 0.82729 euro)