SDSM: Government approved new borrowing of 250 million euros

The Social Democratic Union of Macedonia (SDSM) says the Government has approved new borrowing of up to 250 million euros that will be raised through debt securities on international financial markets and used to support the state budget.

SDSM claims the decision, taken at a government session last week, confirms warnings from the opposition and its leader Venko Filipche that the administration led by Prime Minister Hristijan Mickoski will not be able to finish the year without additional borrowing.

According to SDSM, the sum of 250 million euros «A new borrowing of 250 million euros by the end of this year. And in 2026 there are already no maturing debts to be repaid. This is not for repaying debts but for pensions and salaries because there is no money in the Budget, and of course for criminal tenders», will not be used to repay existing liabilities but to cover pensions and wages and, the party adds, to finance dubious contracts.

Numbers and accusations

The opposition argues that public debt will rise to 11 billion euros and that, when hidden liabilities to the Public Enterprise for State Roads and other public companies are included, debt exceeds 63 percent of GDP. SDSM also says the budget gap stands at 900 million euros and that the Fund for Pension and Disability Insurance (FPIOM) faces a shortfall of 1 billion euros.

Party officials accused the prime minister of pushing citizens toward "debt bondage", saying that in two years since this government took office the state debt increased by 4 billion euros — half of the country’s total debt accumulated since independence. «This is yet another confirmation of SDSM's warnings about the catastrophic state of the budget and the debacle of the economic policies of the gang», the party statement said.

Prime Minister Hristijan Mickoski has acknowledged a shortfall in the budget and told reporters that the budget is expected to be smaller by between six and seven billion denars by the end of the year, and that officials are considering another rebalance. "It is possible that this year we will have another budget rebalance," Mickoski said, adding that most of the deviation is due to measures aimed at keeping fuel prices low.

In an interview on the programme "360 Degrees" broadcast on 5 October, SDSM MP and former deputy prime minister for economic affairs Fatmir Bitiqi warned the government faces a serious liquidity problem and that the budget deficit has already exceeded the level planned for the whole year. He argued the calculation that anti-crisis measures created a hole of 7–8 billion denars (about 130 million euros) is misleading, and used the VAT example on fuel to show that, despite the cut in the VAT rate from 18% to 10%, higher fuel prices meant total revenue per litre remained almost unchanged.

Photo: Arhiva