Georgia’s internal debts
By Messenger Staff
Tuesday, August 18Apart from its foreign debts Georgia has serious internal debts, of around GEL 1.680 billion. However more than GEL 675 million of this was accumulated by the Shevardnadze administration.
Most probably the country’s internal debt will increase in the near future as the Government has decided to issue treasury liabilities for GEL 160 million. The banks will buy these liabilities and in 6-12 months the state should regain this amount with interest.
PM Nika Gilauri explains that banks have excess money but don’t like to risk using it to offer loans for private companies. Therefore the Government will take this money as a loan from the banks and use it for financing infrastructure projects. In fact banks have up to GEL 400 million in surplus which they are not using.
Economic analysts suggest that the new treasury liabilities should have been designed to mature in five to ten years rather than one. Short term liabilities leave space for certain financial manipulations, they say.