Miroljub Labus

BELGRADE, July 9 (Beta) - Vice President of the European Investment Bank Ewald Nowotny and Deputy Prime Minister of the resigning Yugoslav Government Miroljub Labus signed, on Monday, an agreement which guarantees that the FRY would repay its previous debt to the bank.

"By signing the agreement, we have fulfilled one of the conditions necessary for the European Investment Bank (EIB) to resume its operations in Yugoslavia. The second condition is that we repay our debt to the bank. The Swiss government will give us a temporary loan in order for us to do this," Labus said at a press conference.

Yugoslavia's debt to the EIB is EUR225 million.

According to Labus, at the recently held donors' conference in Brussels, the EIB have promised Yugoslavia credit of EUR150 million. A part of those funds will be available immediately after October's session of the bank's managing board.

The EIB, a European Union bank, mostly finances infrastructure projects in the field of transport and gives long-term credit with a 25-year repayment deadline.

"Next Monday an expert team from the EIB will arrive in Belgrade to reach an agreement on concrete projects regarding the reconstruction of roads and railway, and the distribution of funds. If we are granted permission of the EU, those projects will start in October or November," Nowotny said, adding that the EIB budget for central and southeastern Europe of EUR9.2 billion had been increased by 350 million because of Yugoslavia.

"Our long-term engagement in this region will exceed this sum," Nowotny said, adding that the bank's partner is the Yugoslav government.

According to Labus, the EIB provides half of the sum for each project, and the other half comes from some of the EU donor countries.