Is Bosnia the next Greece?

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Source Blic, 21. 07. 2010.
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	Vlada FBiH.
	Vijeće ministara BiH.
	MINISTARSTVO FINANCIJA/FINANSIJA I TREZORA BiH.
	EBRD BiH Sarajevo.
	EBRD London.
	IMF Washington D.C..
	Međunarodni monetarni fond predstavništvo u BiH.
	Ministarstvo finansija RS Banja Luka.
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BH authorities are not giving up on taking out loans to pay salaries to employees of public administration, an overgrown public machine that frantically engulfs any money it can get its hands on.

The Council of Ministers at the last session allowed the Ministry of Finance and Treasury to negotiate with the EBRD, so that B&H would be granted a 100 million EUR loan for "external financing and budgetary needs," in this year.

According to the memorandum, the state would get ten percent, 30 percent goes to RS and to the Federation 60 percent. Not even one cent of this loan will be invested to support economy.

However, it seems that the state, entity and cantonal authorities are not worried, not even one bit. Their explanation is that the external debt of B&H is about 35 percent of the GDP. Citizens feel as if the state wanted to break all the debt records, heading to 60 percent debt rate, which is according to the EU standards a high-debt situation. Bosnian external debt, according to the Ministry of Finance, at the end of the last year was 5.2 billion KM, and currently amounts to 5.5 billion KM. After the war, the state took a total of three billion, and in the last year a billion and a half loan.

Deputy Minister of finance, Fuad Kasumovic explains that a 100 million EUR debt plan is in connection to the IMF. Details, like interest rate and payment time, will be known after the conversations with the EBRD. However, he takes a stand against it.

„Economy and Bosnian citizens cannot finance that, we are short of billion and a half KM every year, to pay our salaries off, bonuses, daily expenses … This simply implies that we will have to take a loan every year, which is economically speaking not sustainable. As soon as I bring up the subjects, I am accused of anti-cantonal politics, but the truth is that the real solution lies in the reducing salaries to public clerks and reducing the overdeveloped public administration, “says Kasumovic. He warns that if Bosnia continues to walk down this road, it will develop a disease called the ‘Greek syndrome’.

“According to economists, there are four parameters provoking the disease – massive administration, big public and social donations, large external debt and a lack of transparency. It is not an issue to take out a loan to open new vacancies, however the state is taking loans so that a very few privileged people can continue enjoying large incomes and high salaries, “, it is a sharp, to-the-point conclusion of this man, who is not afraid to say the obvious, labeling state ministries as a ‘service provider’ to the cantons and entities, that go to it only when they need money from the big international financial institutions.