Montenegro in ‘final phase’ of talks with Europe to refinance US$809 million debt to China
- Beijing has invested billions of dollars in the Western Balkans as part of its Belt and Road Initiative to expand Chinese influence in the region
- A 2014 Chinese loan for the construction of a stretch of highway sent Montenegro’s debt soaring and forced the Montenegrin government to ask for EU help
A European state financial institution is ready to refinance US$809 million of Montenegro’s debt to China, allowing the tiny Adriatic republic to make savings and cut interest rates, the country’s finance minister said on Thursday.
China sees the Western Balkans, which includes Albania, Bosnia, Kosovo, North Macedonia and Serbia, as well as Montenegro, as part of its Belt and Road Initiative to expand Chinese influence.
Beijing has invested billions in the region, mainly through soft loans in infrastructure and energy, which could complicate European Union expansion to the east.
The 2014 Chinese loan for the construction of a stretch of the highway from Adriatic coast of Montenegro – a Nato member and candidate to join the EU – to the border with Serbia, sent Montenegro’s debt soaring to a total of 103 per cent of economic output and forced the Montenegrin government to ask for EU help.
At a session of the parliamentary committee for finances and budget, Finance Minister Milojko Spajic declined to identify the European financial institution due to a non disclosure agreement, but said discussions were “in the final phase”.
