Montenegro to Pay $4 Million Yugoslav-Era Debt to Libya

The Montenegrin Finance Ministry announced on Thursday that the country will repay $4 million to Libya, its part of Yugoslavia’s debt to the African state for oil imports.

“During meetings with Libyan officials on October 12, a final agreement was reached,” the ministry said.

It added that the debt will be settled “in the shortest possible time”.

In August 1975, the National Bank of Yugoslavia issued guarantees for a loan of $70 million, which was used to build a Yugoslav oil pipeline.

In July 1981, Yugoslavia took another loan in the amount of $150 million, which Libya granted for the import of its oil.

The loan agreement was concluded between the Central Bank of Libya and the National Bank of Yugoslavia, guaranteed by the Yugoslav government.

The Montenegrin government said it must repay the Yugoslav according to an agreement signed in June 2006 between Serbia and Montenegro when their unitary state ended.

According to the agreement, Yugoslav financial rights and obligations are split between Serbia and Montenegro, with 94.12 per cent going to Serbia and 5.88 per cent to much smaller Montenegro.

After the collapse of Yugoslavia, Serbia and Montenegro in April 1992 established the Federal Republic of Yugoslavia, declaring the newly formed federation to be Yugoslavia’s successor.

In June 2006, Montenegro formally declared independence after parliament by a majority vote accepted the results of a referendum held in May, in which voters backed splitting from Serbia.

According to the latest government data from 2019, Montenegro has to repay a $850 million debt from the Yugoslav era.

Under Josip Broz Tito’s Yugoslav socialist federation, its six republics were allowed to take on loans independently for infrastructure projects, agriculture, electricity, water management, forestry and transport.

Croatia and Slovenia – the only former republics which have so far joined the European Union – have paid off their debts.