Germany writes off part of Bosnia's debt

29th April 2009, Comments 0 comments

The deal was conditional on an agreement by Bosnian authorities to allocate 20 percent of that amount to development projects.

Sarajevo -- Germany signed an agreement Tuesday to write off 20 million euros (26 million dollars) of debt owed it by Bosnia, a Bosnian government official said.

But the deal was conditional on an agreement by Bosnian authorities to allocate 20 percent of that amount -- 4.0 million euros -- to development projects, according to a spokeswoman for Bosnia's finance ministry, Ljerka Bojic.

The funds would be used to rehabilitate two hydroelectric plants, she added.

Bosnian Finance Minister Dragan Vrankic and officials from the state-owned German bank KfW signed the accord, Bojic said.

With the fall of former communist Yugoslavia in the 1990s, Bosnia -- as a member of the Yugoslav federation -- inherited almost 50 million euros in debt toward Germany.

The German government wrote off a first instalment worth 20 million euros in 2006 and Bojic said talks had begun on forgiving the remaining part of the debt.

Bosnia is still recovering from a 1992-1995 war that claimed at least 100,000 lives and devastated its economy.

AFP/Expatica

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