The Government of the Federation of BiH is on today’s session, on the proposal Federal Ministry of Financedetermined Proposal of the Law on Debt, Borrowing and Guarantees in the Federation of BiHwhich will be addressed to parliamentary procedure.
The new law regulates the conditions, manner and procedures of borrowing at all levels of government in the Federation – from the Federation, Canton, cities and municipalities, to out-of-the-case users and public companies. Also, it is covered Issuance of guaranteesKeeping records, debt reporting, and insurance funds for its servicing.
The legal proposal is partially taken over EU Council Directive 2011/85 on the requirements for the budgetary frameworks of the Member States, which harmonates domestic legislation with Fiscal rules of the European Unionincluding the methodology of public debt measurement according to EU standards.
In the explanation, it is emphasized that the goal of the law is to create conditions for Responsible public debt management and strengthening borrowing control at all levels of government. In that sense, the law provides for: making Debt management strategies by the FBiH Government, the obligation to adopt Annual borrowing plan, Revision of indebtedness limit and exposure, determination new upper boundaries of public debt and guarantee.
One of the key goals is to ensure that the level of public debt is in relation to GDP maintains within Maastricht criteriawhich is important for financial stability and approaching Bosnia and Herzegovina to European integration.
