The Republic of Montenegro recently asked the European Union to help repay a billion dollars in Chinese loans, according to the Financial Times.
Montenegro reached an agreement with the Export-Import Bank of China in 2014 to borrow one billion dollars from each other to build a road. The road is not yet complete, but the loan expires in July.
Montenegro’s finance minister has requested assistance from several institutions, including the European Commission, the European Investment Bank and others. The EU has hinted at a willingness to assist, but no suitable financial instruments have been found yet; and the EU’s response will affect relations with the Balkan country.
China currently holds a quarter of Montenegro’s foreign debt. The collateral for this upcoming loan is Montenegro’s land, and if Montenegro defaults, China will have the right to use the corresponding land.
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