Frozen Foreign Currency Account

Fiscal SustainabilityFiscal Sustainability

Amendments to the Law on FFCA

Payout period being shortened Payout period being shortened from 13 years to 5 years; andfrom 13 years to 5 years; and

Increase accrued interest from Increase accrued interest from 1/2 % to between 5% - 13%.1/2 % to between 5% - 13%.

5 Year versus 13 Year Payout

0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1styear

3rdyear

5thyear

7thyear

9thyear

11thyear

13thyear

Effects of the Amendments

Raises the Raises the total cost to total cost to approximately KM 4.2 billion.approximately KM 4.2 billion.

Increase by KM 1.8 billion or Increase by KM 1.8 billion or 78% in the amount to be paid.78% in the amount to be paid.

Represents 26% of GDP.Represents 26% of GDP.

Neighboring Countries Successor states of ex Successor states of ex

SFRYSFRYInterest Interest

rate rate Payout Payout period period

Republic of CroatiaRepublic of Croatia 5 %5 % 20 Years20 Years

Republic of SloveniaRepublic of Slovenia 6 %6 % 10 Years10 Years

Republic of MacedoniaRepublic of Macedonia 2 %2 % 10 Years 10 Years

Serbia and MontenegroSerbia and Montenegro 2 %2 % 15 Years15 Years

BiH AmendmentsBiH Amendments 5 –13 %5 –13 % 5 Years5 Years

Put another wayPut another way::

1.8 billion KM= 1.8 billion KM= 3years3years of of wages of all teachers in BiH wages of all teachers in BiH

or or Full yearFull year p pension for BiH ension for BiH

pensioners. pensioners.