Public Debt of 10.7 Billion Euros "Within Projections": In 2027 the Eurobond with Over 6 Percent Interest Falls Due

"Public debt remains within projections." With that sentence, Finance Minister Gordana Dimitrieska-Kočoska tried to reassure the public during a TV appearance. According to official Finance Ministry data, "projections" at the end of June meant 10.73 billion euros of public debt, or 58.8 percent of GDP.

The minister says that until the end of the year there will only be borrowing already provided for in the Budget and the supplementary budget, because the Ministry "cannot borrow additionally if it isn't planned for". Because of market conditions, the state has already borrowed on the international market, and the rest of the deficit will be covered by domestic borrowing. There will be no Eurobond before the end of this year.

The old bill arrives in 2027

Next year is a different story. Two Eurobonds or two different types of borrowing are under consideration, maybe in January, maybe in February - depending on the markets, where, the minister admits, "uncertainty is high". Part of the money has to go towards servicing the Eurobond issued in 2023, which matures in 2027 at an interest rate above six percent. The minister herself described that rate as "rather high".

In other words, part of the new debt will go towards paying off the old one. Every state borrows, so that alone isn't a scandal. The question is how much the next loan will cost and who will be paying when the interest comes due.

Projects on hold

The supplementary budget cuts capital spending through the so-called KAPEF mechanism. The minister explains that projects running behind schedule are being postponed, while those on track with signed contracts continue. As an example she cited a tender at the Directorate for the Execution of Sanctions, for which more than 200 million denars had been earmarked. So the investment money is sitting idle because projects and tenders aren't going to plan.

A new citizens' bond has also been announced before the end of 2026. The interest rate, maturity, minimum investment and subscription date are not yet known. Citizens are being invited to lend money to the state, but they'll only find out the terms later.

The 2027 budget, the minister says, will stay within the Fiscal Strategy, with healthcare as a priority. Sounds good. Whether there will be money for hospitals once the interest on the Eurobonds has been paid is something the budget itself will show - not TV appearances.