Who is Trying to Topple Avramovic and Why

Avramovic met an unprecedented number of reporters on Thursday April 4. The regime media, at best, carried a statement by the state news agency. Three days later, an unconfirmed report in Belgrade said a decision had been made to topple him. The federal government got the first go, and if it fails federal parliament could continue since it appoints and dismisses NBJ governors. The Serbian Socialist Party has already announced a session of federal parliament early in May. The entire press conference material is available as a special dossier at Vreme News Digest Agency upon request.

VREME: What was the outcome of the talks in Paris and are you satisfied?

AVRAMOVIC: "We covered a lot of ground, more than I expected. Those institutions were excellently prepared for the meeting. There were five people from the IMF (lawyers, economists and financiers), three from the World Bank (an economist, a lawyer and another man in charge of Loans to the FRY) and we had an extra visit on Sunday: the head of the International Financial Corporation came out from London to present their expectations and wishes.

When I say I am very happy, that means we could not only express our problems and needs in a friendly mood with no negative comments or political allusions. We also got ideas from them on what we can expect from them if things turn out right, i.e. what we can expect on certain conditions. There was only one stumbling block: whether we are inheriting our membership or not.

If it weren't for that we would have finished everything in Paris now: there would be no continuing talks which the press reported even before they began. Everything was finished.

Naturally, we need the agreement of the IMF for our policies which we already have if they are the policies in Program II and not something else. In any other case all bets are off. The second condition was that we make a reasonable offer to our creditors for bilateral and state debts in the meantime, which won't be a problem, and open talks with commercial banks, which also isn't a problem in my opinion. All in all, we would get larger funds on more favorable conditions than we owe the IMF."

You said everything had been packed, but that the talks faltered over the formula on inheritance and continuity. What is your personal stand on that?

"There was nothing to sign in Paris since those weren't formal negotiations but if we had accepted everything they wanted the whole thing would have immediately gone to the executive directors' board. It would be a package of normalization which is a condition for everything else. That arrangement would be handed to our government and we would become a full member. Then I would hope their mission would be on the Adriatic coast in two weeks to agree on repairs for hotels, which is the key issue for the coming tourist season since the hotels are in a bad state. Also we would get turnover capital for Serbia."

How did the IMF and World Bank people react to your story on succession, continuity etc.?

"They were confused."

How did your delegation function considering the fact that it included federal government members, and the difference in your stand and the government's?

"I said they were confused because they assumed all those issues were resolved in 1992-93 when we agreed to a quota of 36.5% of the capital of the former Yugoslavia. Our government did that then to make it easier for other parts of Yugoslavia to get loans. That government included some leading figures now."

How did our delegation approach the talks?

"There was a little confusion. I don't know how to say this without getting into an even deeper mess. It was very complicated since part of the delegation was evidently operating on their own instructions. The first proposal by that part of the delegation was not to solve the legal issue in Paris, to postpone it for later. I was shocked: we need money not delays. There were a lot of other things, it's a novel everything that happened, but it was a tug of war and that was transparent. That's us."

What is the biggest problem and were there any political demands?

"Problem? I have no problem and there were no political demands. Not one. There was only an appeal for cooperation with the other countries in former Yugoslavia to resolve the question of debts, reserves, etc. The only problem is in domestic production and God help the people who think that other issues are central. That only means delays, waiting at a time when we have no room to delay, no time to delay. We have the crazy luck of stabilizing the currency again and that impressed the whole world. The dinar is stronger; that's the best thing that could have happened and we have very small reserves. In the meantime the clock is ticking, seconds go by every day and if there is no opening on the outside front so I can get money to finance the sowing and export industries and tourism I will be forced to stop all NBJ and business bank loans to sustain the value of the national currency. My obligation is sustaining the currency. This country can't allow itself another inflation. The difference between defending the currency and issuing loans is this: the value of the dinar affects everyone in this country, issuing loans is very important but that favors some economic branches and certain producers - it can go into the agriculture, Simpo, Yumko and whoever else. So if I have to choose I will shut down credits since that is the only way I can meet my obligation under the law. That does not have to happen if the government decides to promote these talks and not block them. There you have a lot of material to write."

What is the next step considering the way the Paris talks ended? How would you comment on the statement by the federal government after your departure for Paris that you went there with their platform and in their delegation?

"The next step is this: A counter-proposal to the IMF formula was sent from Belgrade on Monday April 1, and a letter to the IMF and World Bank said that is the basis for future talks - you know some phrase - but it was a counter-proposal which did not invoke the 1992 decision, the key decision on the former Yugoslavia's heritage, that is the basic difference, it invoked continuity. Then their lawyer, a man with a clear head, waited for more reactions because it was clear there is a dispute and he scheduled his departure for Washington. He got two long telegrams from me at 10:00 am after my night telegrams with the federal government and said he was taking them with him for discussion in Washington. The next day I got a phone call from our foreign minister saying I should suggest to the IMF and other delegations that their mission should come to Belgrade the following week to continue discussions on the formulation. I conveyed that message from our government and the head of their delegation said he would report to his superiors and would be in contact with us but the answer might not come soon. We left it at that. As soon as I arrived I submitted my report and recommendation to the government to agree to everything at once since any delay is very risky. If we decide to ask for new membership we face the entire Islamic block and things could get complicated. If we don't become members we have to repay debts, and we would owe the IMF not 104 but 185 million dollars. Try not to pay and you'll see where you'll get for the next 10 years until they forget. So I recommended agreement to everything at once and we'll see, the government will decide. So the ball is in the other court now and we'll see whether they'll decide to come to Belgrade or, as they indicated could happen, they'll write a letter articulating the differences in stands so we can decide what to do on that basis.

In the meantime, Ivko Djonovic, Tomic and the others have to wait. I will not print money. I will not print money for loans and that's final."

You said at the start that everything would have been finished if the dispute over continuity hadn't broken out. Does that mean regulating our membership, concluding a standby arrangement and regulating the foreign debt or just part of that?

"No, no. Everything was ready in that sense, de facto it was ready because there was no need to sign. One of the elements of disagreement on the platform was the government decision to pay the 104 million dollars to the IMF and I said: how can I pay 104 million of the 300 million? I can't pay that. I was in Paris to discuss when we can draw the money and they said in 15 days.

So I won't issue a check for 104 million dollars unless I'm absolutely certain that I'll get 120 million in 15 days. If I have that assurance, I can get money from a private bank in 15 days. From that point of view everything was finished.

The gentleman from the International Financial Corporation told me that we should put in writing that we will pay back 130 million USD in two-three years and, he said it explicitly, we don't have to wait for the payment to start new operations.

In the meantime, the Montenegrin government has an estimate of the cost to repair their hotels since they rented them out to people who ruined them. They need 30 million USD for the new season. Maybe I'm crazy, although I have some experience, but I am convinced that we would get that money right away if we could reach an agreement on all issues, including privatization. There's no discussion about that, privatization that is effective not just a promise."

Do the Montenegrins support you?

"Ask the Montenegrins. They were kind enough to send me a plane to return from Paris and I had dinner the other night with Bulatovic and Djukanovic in Podgorica."

How much is needed to overcome the dispute between you and the federal government?

"Half an hour."

What are the chances?

"I don't know, ask the government. There is no dispute over membership. The dispute is over the procedure to renew membership. The procedure on offer to us is renewing membership under the same conditions, under the same rules under which Macedonia, Slovenia and Croatia became members and drew money. And we don't want those conditions, we're not happy with the phrase offered us. That's the dispute, disagreement over one word - not membership, rights, quotas.

For me it's not an issue, since it's all over, all those states exist and Yugoslavia will mean something if it has a happy nation and gets out of this muck we've been in for the past three years and especially if we make a capital fund with 700 million dollars in gold. We don't need to be a big country - we have to have a happy nation."

Did both federal units insist equally on continuity or was Montenegro softer?

"I wouldn't comment on that, although I have some impressions but you should ask them about that."

But they sent a plane...

"That doesn't mean anything."

During those heavy talks did our delegation explain why there has to be continuity?

"The talks weren't difficult or heavy."

I meant the talks within our delegation.

"There was no fight. The whole problem obviously existed from the start. In our platform we had a stand that the FRY is offering to pay all the debts of the former Yugoslavia and get paid for them later. Probably to keep continuity, we offered to repay all 16 billion dollars to all creditors and then go after Macedonia, Croatia and Slovenia for the money. That is completely irresponsible."