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EU suggests

EU suggests

The European Commission on Thursday suggested lending Serbia ⁈llion ($293.88 million) to help it bridge a budget gap triggered by the global economic crisis.
The offer comes two days after Russia promised to lend Serbia $1 billion (⁈llion), a deal that could extend Moscow's influence in the Balkan region.
European Union governments will have to approve any loan for Serbia, which aspires to join the 27-nation bloc.
The EU executive said any loan would be linked to conditions set by the International Monetary Fund that require the government to curb public spending. More than a third of the IMF's new funding for troubled economies comes from EU nations.
The EU would fund the loan by borrowing from money markets and would pay it out in two installments, likely in the second and fourth quarters of 2010. It comes on top of ⁈llion in EU grants for Serbia agreed in August.
Serbia secured a ⁈ion standby loan from the IMF in March but IMF officials have postponed giving it access to additional funds until the Serbian government furnishes details on how it plans to reduce its growing budget deficit.
Serbia has promised to lay off about one-fifth of its government employees _ 14,000 people _ to meet the IMF's conditions.
The IMF has also called on Serbia to keep its budget deficit under 3.5 percent of gross domestic product in 2010. This is more than Serbia's aim of 4 percent. The deficit is running at 4.5 percent this year.
New talks between the IMF and Serbia are expected to start in Belgrade on Oct. 20, the same day that Russian President Dmitry Medvedev visits the Balkan country and is expected to sign the loan deal.
The Russian funds will be used to support the economy and invest in infrastructure such a new subway for Belgrade and a ring road around the capital.
Serbia said the World Bank has also promised it an additional $400 million, half to fill the budget gap and half for the construction of a major highway through Serbia linking Hungary with Bulgaria.


Updated : 2021-10-22 19:06 GMT+08:00