Montenegro Sets To Ditch Chinese Debt Burden

The Montenegrin government’s agreement with Western banks to refinance a billion-dollar loan from China for the construction of the country’s main highway has provoked a strong reaction from both the ruling coalition and the opposition.

Montenegrin Minister of Capital Investment Mladen Bojanić has recently made the « optimistic assumption » that the first phase of construction of the country’s main highway, which will connect the Adriatic coast with the Montenegrin North and further with Serbia, would be finished by November 30. But much more excitement was caused by the government’s announcement of the deal to refinance a billion dollar loan from China for the construction of the « Montenegrin highway of the century ».

According to Finance Minister Milojko Spajić, the government has agreed with two US and one French bank (he declined to give their names) to reduce the rate of the Chinese loan from 2% in dollars to 0.88% in euros, which, he said, would save Montenegro €8 million a year. The minister assessed the deal as outstanding.

However, neither the Montenegrin opposition nor part of the ruling coalition parties agreed with this assessment. They demanded that the government release all details of the deal.

Nebojša Medojević, one of the leaders of the ruling coalition Democratic Front, accused the Minister of Finance of « playing casino games with public money » and demanded that he be called to a hearing in Parliament.

Outside players also intervened. US Deputy Assistant Secretary of State for European and Eurasian Affairs Matthew Palmer, after talks with Milojko Spajić, urged Montenegrins to be « careful in dealing with China » and warned that « China has been conducting debt trap diplomacy in Montenegro and the Balkans ». The Chinese embassy in Podgorica immediately reacted by advising the Americans to « mind your own business and worry less about Chinese and Montenegrin affairs ».


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