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Slobodan Selinić, PhD
Institute for Recent History of Serbia
Belgrade, Republic of Serbia

 

MILKA PLANINC AND THE EXTERNAL DEBT OF THE SFRY 1982/1983

Vol. XLII, 2/2024, pp. 471-488
https://doi.org/10.29362/ist20veka.2024.2.sel.471-488

 

ABSTRACT/RESUME:

When Milka Planinc became the president of the Federal Executive Council (May 1982), SFRY was increasingly insolvent abroad due to its inability to pay back its foreign debt. At the end of that year, Western governments, banks and financial institutions (governments of 15 countries brought together by the USA, western banks that were former creditors of Yugoslavia, which numbered around 630, the International Monetary Fund, the International Bank for Reconstruction and Development and the Bank for International Settlements from Basel) aligned themselves with Yugoslavia as one bloc. They offered Yugoslavia a financial package worth about 4.5 billion dollars. From the SFRY, they demanded changes in the internal organization in the direction of centralization and greater powers of the federal authorities and the National Bank of Yugoslavia, changes in economic policy (reduction in consumption, restrictive monetary policy, interest rates higher than inflation, real exchange rate of the dinar) and that the federal state be the debtor and guarantor for loans. In the summer of 1983. Yugoslavia mostly accepted foreign conditions. Milka Planinc was aware that the western creditors were placed towards the SFRY as a whole and that their demands were difficult, but she advocated their acceptance in order to avoid state bankruptcy. She believed that a large part of the blame for the difficult position of the state was on the Yugoslav side because it did not change its economic policy (increase in exports, responsibility for returning loans taken…). She also emphasized the necessity of changes within the country in order to strengthen the powers of federal authorities and adopt laws that will ensure regular repayment of debts in the future.

 

KEYWORDS: SFRY, Milka Planinc, foreign debt, International Monetary Fund, western banks

 

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