Montenegro paid the first installment of a US$1 billion road loan from China, which critics say could damage the economy of the Balkan countries.
Montenegro received a loan of US$944 million in 2014 as part of a plan to build a highway from the northern port of Bar in the Adriatic Sea to the Serbian border.
This is one of several Chinese projects in the Balkans, which has raised concerns about the government’s excessive reliance on Beijing’s funds.
News reports stated that Montenegro is struggling to pay the cost and is seeking help from the EU, but the government insists that everything is in its hands.
Finance Minister Milojko Spajic told local news agency Mina on Wednesday that the first payment of nearly US$33 million had been paid to the Export-Import Bank of China.
This road is now one of the most expensive roads in the world. The loan covers only the first 41 kilometers, and there are 130 kilometers to be built.
The first paragraph was supposed to be completed in 2019, but it is now planned to be completed in November.
Montenegro plans to pay another loan in January, but since tourism is a key sector, government revenue has been hit by the coronavirus pandemic.
Last year, the country’s public debt accounted for 97% of its gross domestic product (GDP), well above the EU’s 60% limit.
Chinese loans themselves account for nearly one-fifth of the country’s GDP, at 4.9 billion euros.
Montenegro asked the EU to help refinance loans. EU Enlargement Commissioner Oliver Varhelyi once said that the EU is looking for a solution.
Brussels does not want to lose more influence in the Balkans. Russia is already active there, but has been reluctant to take over.
