Businessmen and bankers readier than state - Will there be cheaper money if we "get the date"?

If Vidovdan, apart from memories of the battle and Ceca’s concert scheduled at Usce, brings the date to start negotiations on joining the European Union, small and medium enterprises in Serbia could be satisfied. Because this " small step for mankind but a giant one for Serbia," could bring our businessmen multiple sources of funding, lower interest rates and therefore a better political and economic climate.

However, for joining the European Union, companies in Serbia are readier than the state, it was assessed at the meeting "What negotiations with the EU mean for the small and medium enterprises in Serbia," organized by Erste bank.

The progress of our country towards the EU, however, is important not only because of the expected large capital inflows but also, above all, for the adoption of the European standards and regulations compliance, it was pointed out at the meeting.

The Head of the Small and Medium Enterprises Department in the Ministry of Finance and Economy, Katarina Obradovic, said that getting the date for Serbia means opening up the option for the use of additional resources for private sector development.

According to her, what is more important than money is the change of the country in the direction of a stable and orderly society.

(Katarina Jovanovic Obradovic)

Freek Janmaat, Head of the Section for European Integration and Economic Affairs of the EU Delegation in Serbia, said a lot has already been achieved and whether formally negotiations would begin a month earlier or later - is not that important.

Janmaat stated that EU members and candidates must comply with the same standards of quality, that fear of the adoption of the European standards is not justified in practice and that the experience has shown that the country's progress towards the EU economy brings only good.

Krunoslav Striga, from Zagreb-based company, Gardens of fruit, proved that joining Europe means extra money. He says that today he gets back almost half of his investments from European cash.

Money is available now as well?

President of the Executive Board of Erste bank, Slavko Caric pointed out that after obtaining the date capital will be more favoutable and more accessible, because it provides security for investors, but that nothing will happen overnight.

Every step that makes Serbia closer to the EU also means reducing the risk of the country. After all, he says, current trends of money price fall as of 2011 show that things do not happen overnight, but also that it can be expected that, depending on the negotiations with the EU - hopefully successful, money to become cheaper in the future.

The situation is similar when it comes to the sources of capital as well. Erste Bank is already offering favorable investment credit facilities providing customers with advisory services as well. For example, with loans Erste Bank realizes out of the lines of the European Investment Bank, the interest rate is at least 0.5 percentage points lower than the standard banking offers for this type of a loan, and repayment terms are, depending on the project, even up to 12 years.

Slavko Caric

Vojislav Lazarevic, a member of the Executive Board of Vojvodjanska banka says for eKapija that after potential setting of the date we will need a little more time to get to cheap money.

- With defining the date, political risk of Serbia will improve. Therefore, we believe that there will be a reduction in premiums borrowings of banks in their home countries, which would mean that we would get to some cheaper money.

However, it will be immediately after determining the date. It takes, however, a certain period of time so that it could be felt and so that small and medium enterprises, as well as citizens, would get improved financing conditions.

Lazarevic said that although the price of the collateral will not be reduced as of the first day, after a certain transition period, it is expected that small and medium enterprises will still get lower interest rates and that period for repayment of loans will be postponed.

Societe Generale bank sees the date as a good signal for investors, however, they do not believe that immediately tomorrow something important would changed.

- I believe there will be more money, because obtaining the date is a positive signal which contributes to greater investors’ confidence and lower risk price - Miroslav Rebic, a member of the Executive Board of the bank says for eKapija, adding that there will be more support programs for SMEs from various European and international institutions.

The question is, however, Slavko Caric from Erste bank thinks, whether it is a major problem the fact that there is no money or projects for funding. He believes that banks can now provide enough money, but quality "demand” is missing.

Inability of payment collection and exchange rate differences cause headache to businessmen

(Janos Zemberi and Dragan Aleksic)

Businessmen agree with bankers that money is there now but they do not agree with the attitude of Caric that there are no good projects. In their opinion, the main problems are the legal uncertainty, unable to pay, Exchange rate risks...

Dragan Aleksic, the owner of Nutriko, believes that a key problem is that the system in Serbia is not sufficiently legally regulated.

- I debit in one currency, run business in another and it is uncertain what will happen in a month. When someone is encouraged to borrow money, risk is very high – Aleksic thinks. His colleague, Janos Zemberi, from Clock tract company, which operates in telecommunications, suggests one of the barrier is also the fact that banks are conservative.

- Mortgage are required, and we, for example, do not have assests to invest in real estate in order to meet these criteria. We do not need real estate- Zemberi said.

- Opening towards EU will certainly bring psychological relief although all entrepreneurs will thus experience some problems - Alexander Helc, the owner Union tree says.

Jelena Djelic