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Ministry of Finance Interview of the Deputy Prime Minister and Ministe...
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Interview of the Deputy Prime Minister and Minister of Finance, PhD Igor Luksic, for Germany news agency DPA
Published on: Apr 22, 2010 • 10:55 PM Author: Ivona Mihajlovi' - administrator
Podgorica, Montenegro (dpa) - In what one international official
described as "a major step forward," Montenegro is working on new
laws to impose order on its banking sector, a deal with the
International Monetary Fund (IMF) to cement economic oversight, and
an issue of Eurobonds to achieve a sustainable budget.
"The intent is to fully restore the banking sector's credibility,"
Finance Minister Igor Luksic told the German Press Agency dpa in
Podgorica on Thursday.
The upcoming regulation - including new laws governing banks, the
central bank and bank liquidations - is being prepared in cooperation
with the IMF and the World Bank in order to avoid shortcomings, said
Luksic, who doubles as the deputy premier.
Once it finalizes the bills, which Luksic said is planned for "the
next couple of weeks," the Montenegrin government will consider
asking for a standby arrangement with the IMF.
"We do not actually need funds from a standby arrangement, but we
want the IMF oversight to show, particularly to foreign investors,
that our economy is run according to transparent rules within
international standards," he said.
However, there is no consensus regarding the IMF, with some
politicians in Podgorica worrying that it may demand spending cuts
and affect salaries.
Parallel to talks with the IMF, Luksic said Montenegro plans to
issue Eurobonds and raise 200 million euros (270 million dollars) for
sustainable budget financing.
The three-pronged approach that Luksic's ministry is planning
"will be a major step forward" for Montenegro, a World Bank official
said in Podgorica.
An economic bubble that started to grow in 2005 left Montenegrin
banks with lending volumes rising by hundreds of percentage points,
in some cases even more than 1,000 per cent, annually.
However, the bubble has burst and many of the credits - often
approved without adequate collateral - have become liabilities
threatening the survival of several banks.
The clean-up of the banking sector is not just a condition for
increased foreign investments, but also a requirement for closer ties
with the European Union. Podgorica officials say they hope their
country will become a candidate for membership by the end of 2010.
described as "a major step forward," Montenegro is working on new
laws to impose order on its banking sector, a deal with the
International Monetary Fund (IMF) to cement economic oversight, and
an issue of Eurobonds to achieve a sustainable budget.
"The intent is to fully restore the banking sector's credibility,"
Finance Minister Igor Luksic told the German Press Agency dpa in
Podgorica on Thursday.
The upcoming regulation - including new laws governing banks, the
central bank and bank liquidations - is being prepared in cooperation
with the IMF and the World Bank in order to avoid shortcomings, said
Luksic, who doubles as the deputy premier.
Once it finalizes the bills, which Luksic said is planned for "the
next couple of weeks," the Montenegrin government will consider
asking for a standby arrangement with the IMF.
"We do not actually need funds from a standby arrangement, but we
want the IMF oversight to show, particularly to foreign investors,
that our economy is run according to transparent rules within
international standards," he said.
However, there is no consensus regarding the IMF, with some
politicians in Podgorica worrying that it may demand spending cuts
and affect salaries.
Parallel to talks with the IMF, Luksic said Montenegro plans to
issue Eurobonds and raise 200 million euros (270 million dollars) for
sustainable budget financing.
The three-pronged approach that Luksic's ministry is planning
"will be a major step forward" for Montenegro, a World Bank official
said in Podgorica.
An economic bubble that started to grow in 2005 left Montenegrin
banks with lending volumes rising by hundreds of percentage points,
in some cases even more than 1,000 per cent, annually.
However, the bubble has burst and many of the credits - often
approved without adequate collateral - have become liabilities
threatening the survival of several banks.
The clean-up of the banking sector is not just a condition for
increased foreign investments, but also a requirement for closer ties
with the European Union. Podgorica officials say they hope their
country will become a candidate for membership by the end of 2010.
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