After two successfully organized Summits, Ekonom:east Media Group presents the Third Annual Summit of Ministers of Finance and Governors of the Region, which took place on June 17 in Becici, Montenegro.

Monetary and fiscal politics in times of crises, effects of euro integrations and structural changes on financial politics of the region, inflationa dn reprogramming, potentials and obstacles for banking secotr development, insurance companies and interest rates and many other topics were open and discussed among the highest government financial representatives of the Region as well as representatives of international financial institutions.

State Secretary of Finance Goran Radosavljevic stated that the Serbian government decided to start issuing Eurobonds, the first emission of which can be expected early in September. Radosavljevic specified that the first emission will most likely be €200 million and RSD 500 million.

This will pose a challenge to Serbia, but we believe that there is demand for bonds in dinars on the domestic market, he explained, voicing his expectation that foreign investment in Serbia will reach €3.5 billion this year.

During the three years of crisis, Serbia did its best to maintain the fiscal deficit at the level of 4% of GDP, in which it had considerable assistance from the arrangement with the IMF.

Radosavljevic specified that over the last four months, Serbia drew €250 million in loans from the European Investment Bank and that during the summer it will draw another €250 million, adding that these funds are intended for exporters and the media.

The State Secretary underlined that Serbia’s goal is to reduce the fiscal deficit to 3% of GDP by 2013 in order to be able to bring it further down to 1% of GDP in 2015.

We expect the public debt to be reduced to 40% of GDP by 2015, and in order to achieve this, we must secure new sources of financing. One of them has already been secured, and these are EU pre-accession funds, Radosavljevic concluded.

Governor of the National Bank of Serbia (NBS) Dejan Soskic stated on Friday that the measure which the NBS Executive Board adopted on May 17, when it decided to raise the share of housing loans from 10 to 12 per cent, was adopted unanimously and added that the NBS is not considering the possibility for revising the decision.

During the Becici summit of central bank governors and finance ministers of South-East European countries, Soskic said that the average loan relative to the average flat price over which the bank established a lien totals 67.2 per cent, and noted that loans cannot be granted to those who are not able to pay them back.

“Loans should be granted to individuals who are financially capable of paying them back,” Soskic said and quoted the case of the U.S. in which the global financial crisis started, because it was in the U.S. that loan value exceeded the value of real estate, and this was the reason why the crisis broke out.

“Besides, there is no currency clause in the U.S., which constitutes an additional risk,” he added.

Replying to the question as to whether the NBS is 'spoiling' the government's plans regarding residential construction, Soskic said that it would be better for the government to build roads instead of flats.

Soskic believes that the aim of the privatisation was to enable the government to withdraw from jobs that can also be legitimately performed by the private sector, and pointed out that residential construction is one such area.

Speaking about the dinarisation and measures the NBS is more actively implementing, Soskic said that the central bank's efforts are showing results and noted that last year's euroisation totalled 76 per cent but has now been reduced to 67 per cent, underscoring that the aim of dinarisation is to cut down currency risks.

This event has been organized under the patronage of Ministry of Finance and Central Bank of Montenegro.