IMF Suspends Kosovo Bailout
The International Monetary Fund has suspended its 2011 Stand-by Agreement with Kosovo, after Pristina breached the deal by implementing pay raises.
(KosovoCompromise Staff) Friday, June 03, 2011
The 18-month-deal would have provided Kosovo with 87 million euros in soft loans from the IMF plus another 100 million euros from the European Commission, pledged at a 2008 donors' conference.
The IMF, which gave the agreement the green light last July, said that Kosovo's government had deviated from the deal with its implementation of large public sector pay hikes, despite warnings from the lender earlier this year.
"Elements of the 2011 budget, in particular the large increase in the wage bill, deviated from programme commitments," an IMF statement reads.
