Economy, trade the focus of Medvedev's Serbia visit

Oct 20, 2009, 10:36 GMT

   Belgrade - Russian President Dmitry Medvedev arrived in Belgrade on Tuesday to seal a 1-billion-dollar loan and to demonstrate Moscow' economic support and interests in the fellow Christian Orthodox Serbia.

Medvedev is scheduled to pay tribute to Soviet soldiers who fell in the liberation of Belgrade, completed 65 years ago Tuesday, and is expected to reiterate the Russian political support for its Balkan ally, particularly in the issue of Kosovo.

   'The visit will confirm the unity of political views and the mutual support of Serbia and Russia in the international arena,' Serbian Foreign Minister Vuk Jeremic told the national television RTS ahead of Medvedev's arrival.

   The focus of his single-day visit to Serbia is expected to be economic and trade issues.

   The sealing of a 1-billion-euro (1.5-billion-dollar) Russian loan for cash-strapped Serbia is expected during Medvedev's visit.

   Belgrade has already set plans to use a third of those funds to cut the deficit in its 2010 budget, as required by the International Monetary Fund (IMF) for the continuation of a standby facility.

   A larger part of the loan, the details of which were not announced in advance, is intended for the construction of the highway ring around Belgrade and other infrastructure projects.

   The IMF withheld the second, 1-billion-dollar tranche of a two- year, 4-billion-dollar standby loan, over Serbia's inability to cut the anticipated 2010 budget deficit.

   Medvedev said earlier that existing and potential investments in 'large infrastructure projects in the sphere of energy and transport' were also on the agenda of the delegation accompanying him.

   Russia bought the majority stake in the Serbian oil company NIS in early 2007 - when Medvedev also visited Belgrade, then as prime minister - and may now seek a legal extension of the company's expiring monopoly in the domestic market.

   Moscow is also mulling investments in a natural gas storage facility and the addition of a Serbian branch to the South Stream gas pipeline project. Media also rumoured that Russians were determined to buy the Serbian electric power company EPS.

   Earlier, Medvedev had assured Belgrade that Moscow is determined to continue supporting Serbia's claim of sovereignty over Kosovo, insisting that Belgrade 'has the final word.'

   Kosovo, with its mostly ethnic Albanian population, declared independence from Serbia last year and was quickly recognized by big Western nations but remains barred from United Nations membership due to Russia's veto.