FT: Debt key to Kosovo’s status

FT: Debt key to Kosovo’s status

The question of ex-Yugoslav debt could flare up if Kosovo declares independence, Neil MacDonald reports from Priština.

“The seceding province’s debt servicing to international financial institutions and Paris and London club creditors would cost it between 50 and 100 million euros per year, UN officials say.”

“Serbia currently foots most of these bills and might continue doing so to shore up its sovereignty claims”, the report says, adding that the Serbian National Bank claims Kosovo’s inherited share of Serbia’s total external debt is currently at 7 percent.

The newspaper quotes chief Belgrade negotiating team economist Nenad Popović as saying that servicing the Kosovo debt costs Serbia “nearly 100,000 dollars per day”, adding that Serbia views the ex-Yugoslav debt as “a bargaining chip to block independence.”

“The lack of a debt agreement drains Serbia and also hinders restructuring for Kosovo’s underdeveloped economy, say IMF officials.”

“Mr Ahtisaari’s plan follows the formula established for debt settlement after the earlier secessions of ex-Yugoslav republics – Slovenia, Croatia, Bosnia-Herzegovina and Macedonia – in the early 1990s.”

“’Once Serbia agrees to the principle, it’s easy,’” The Financial Times quotes UNMIK chief Joachim Ruecker in its report from Priština.