Montenegro to Pay $4 Million Debt to Libya

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Flags of Libya and Montenegro
Flags of Libya and Montenegro

Montenegro’s Finance Ministry announced that the country will repay a $4 million dollar debt to Libya.

It added that during meetings with Libyan officials on 12 October, a final agreement was reached. It noted that the debt will be settled “in the shortest possible time”.

In August 1975, the National Bank of Yugoslavia issued guarantees for a loan of $70 million, which was used to build an oil pipeline.

In July 1981, Yugoslavia took another loan in the amount of $150 million, which Libya granted for the import of its oil.

The loan agreement was concluded between the Central Bank of Libya (CBL) and the National Bank of Yugoslavia, guaranteed by the Yugoslav government.

The Montenegrin government said it must repay the debt according to an agreement signed in June 2006 between Serbia and Montenegro, when their unitary state ended.

According to the agreement, Yugoslav financial rights and obligations are split between Serbia and Montenegro, with 94.12% going to Serbia and 5.88% to the much smaller Montenegro.

After the collapse of Yugoslavia, Serbia and Montenegro established the Federal Republic of Yugoslavia in April 1992, declaring the newly formed federation to be Yugoslavia’s successor.

In June 2006, Montenegro formally declared independence after a majority vote in Parliament accepted the results of a referendum held in May.

According to the latest government data from 2019, Montenegro has to repay an $850 million debt from the Yugoslav era.

Under Josip Broz Tito’s Yugoslav socialist federation, its six republics were allowed to take on loans independently for infrastructure projects, agriculture, electricity, water management, forestry, and transport.

Croatia and Slovenia – the only former republics which have so far joined the European Union – have paid off their debts.

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