Economists: Government selling receivables from public companies to banks because it needs money urgently

The Federal Government announces that they might soon sell financial receivables that the Government has from several public companies to banks. The bank would immediately pay the Government the money on behalf of the public companies, and then collect the money from those companies over a certain period and under certain conditions, writes Patria.

'Roads of Federation of BiH', 'Elektroprivreda HZ HB', 'Motorways of FBiH'... owe the Government more than 100 million KM. These are loans that these companies took from international financial institutions, primarily from the European Bank for Reconstruction and Development (EBRD). The loans are serviced by the Government of FBiH on behalf of these companies, and then the companies return the money from their operations to the budget of the Federation. In this case, the Government of FBiH serves as an intermediary between the companies and international financial institutions.

Professor from the Faculty of Economics in Sarajevo, dr. Muris Čičić, believes in a comment for the Patria news agency that the Government of FBiH has run out of money, which is why they decided to engage in selling receivables from public companies. In the future, companies will return money to banks instead of the budget. Professor Čičić does not think this would be a good model for the Government.

The Government has not announced how much commercial banks will charge for taking over the debts of public companies.

Professor from the Faculty of Economics in Sarajevo, dr. Mehmed Jahić, also disagrees with the Government's new proposal. He stated for Patria that by selling the debt of public companies to commercial banks, space is opened for banks to take over that property at one point. If companies cannot repay the loans, banks will take their property.