IMF: Kosovo Government May Bankrupt

Prishtina, 8 Feb 2005 – In an interview with Koha Ditore, Mark Auboin, a regional representative of the International Monetary Fund, said that the Kosovo Government may easily bankrupt following the enormous spending of 160 million Euro by expenditure agencies during December 2004. This made the Government move from surplus to deficit and start 2005 with only 60 million Euro.

In the interview given to Koha Ditore, Auboin gave a strict ‘Yes’ to the question whether Government could bankrupt. Even though he did not want to dramatize things, he said that also the Government is aware of this possibility.

Auboin said that IMF advised Government to have a surplus of €76 million, but according to the debate in the Parliament it was decided that the surplus could be €100 million.

“However, we still believe that the calculations on the incomes are optimistic, because we saw the incomes in the budget through the next two years,” said Auboin. He added that most of the changes should be done during the next year, when as it was predicted, the balancing of the budget will start.

On the other hand, according to Auboin another risk could be decrease of economic activities of the private sector. “You have a very good legislation system, considering the incomes from the customs. But if tradesmen and local investors expect the Government to bankrupt, then they will expect increase of taxes and they will decrease their investments,” said Auboin.