7 minutes agoKosovo plans to overcome pandemic crisis with grants, debts
Periskopi(6 years ago)
(6 years ago)About 400m euros by little could have Kosovo's budget this year, due to the pandemic caused by COVID-19 disease. The Kosovo government has taken a series of measures to prevent the spread of the virus, and in this context many private businesses have been forced to suspend their activity. Government in charge of [...]
The Kosovo government has taken a series of measures to prevent the spread of the virus, and in this context many private businesses have been forced to suspend their activity.
The incumbent Kosovo government has earmarked about 180m euros to help businesses in need, while another 200m euros are expected to be scrapped the budget, due to the postponement of tax obligations. Even postponing these obligations is set within the package to help the country's economy.
Kosovo's 2020 budget is 2.3 billion euros.
Where will the government receive about 180m euros?
Acting Deputy Minister of Finance and Transfers Agim Krasniqi tells Radio Free Europe that financial means will be provided by budget savings, grants and international loans.
The “All capital investments, which are envisioned with this year's budget, will be suspended,” says, adding that where the work could have started in this direction, the execution suspension measure will be imposed, to enable the withdrawal of financial tools”.
“About 100m euros are estimated to be saved in the current budget. Another fund in the ministry, over 25m euros, is for emergencies, and they will be saved. The rest will come from financing provided by the European Commission and the World Bank, in terms of grants, subsidies and loans. Currently, we are also discussing the possibility that some of the valuable letters -- some 50m euros” -- will also be realised, Krasniqi says.
Value letters or Treasury Bono are issued by the Ministry of Finance whenever the government needs more money. These letters are government debt. Value letters in Kosovo are mainly purchased by commercial banks.
With only 1.2 billion euros, Kosovo has the lowest debt in the region. Of this value, more than 721m euros are estimated in domestic debt, while 409m euros are primarily indebted to the World Bank, the European Bank for Reconstruction and Development (BERZH) and the International Monetary Fund (FMN).
The Law on Public Debt in Kosovo says that in no case the unpaid amount of total debt should exceed 40 per cent gross domestic production.
International aid to Kosovo
The European Union has earmarked 68m euros for Kosovo to cope with the new virus, which causes COVID-19.
According to the EU, 5 million will go towards immediate needs to fight COVID-19, 50 million to cope with the economic crisis, as well as 13 million will be transferred to Kosovo's budget.
The United States of America has offered Kosovo 1.1m euros for the fight of Coronavirus.
The Central Bank of the Republic of Kosovo has confirmed that the coronary will influence the country's overall economy.
BQK Governor Fehmi Mehmeti has said that according to this institution's predictions, this year Kosovo economy will prevent increased economic expansion of 3.6 percent to minus 2 to 4 percent.
Pandemia will cost the global economy over $4 trillion.
The IMF and the World Bank have said the economic impact of the coronary has emerged more sharply than expected.
In an effort to curb the spread of the coronary, many countries in the world have shut down or reduced the capacities of production companies.
This has also caused oil prices to drop to record levels.
