Armenia Takes Loans to Cover Previous Debts, Says MP During a Discussion of New Loan Agreements

Today, a discussion took place at the National Assembly’s Foreign Relations Standing Committee session about 7 loan agreements with which the government is obtaining a 260 million dollar loan. Government representatives stressed that the agreements needed to receive a positive conclusion, so they can be discussed on Monday during the extraordinary session at the National Assembly. Deputy Minister of Finance Pavel Safaryan underlined that not ratifying even one of the loan agreements would lead to the nullification of the budget, because the loan was already calculated into the budget.

Safaryan said that while listening to the criticisms he got the impression that MPs were not directly speaking about the effectiveness of the loan, but the idea of increasing foreign debt by obtaining a loan.

Nikol Pashinyan, who spoke about the issue of foreign debt, criticized the suggested loan. He noted that loans obtained are almost the same as what Armenia spends to cover previous debts, thus appearing “indebted.” Safaryan responded that there are countries which are under more foreign debt, for example Greece.

Republican Party faction MPs tried to defend the government from the accusations. Artashes Geghamyan searched online to find information about foreign debt of all countries and he read-out that “the US’s foreign debt compared to its GDP is 107%, the EU’s is 101%, France is 236%, Italy is 144%, and we already spoke of Greece.” He observed that Armenia’s foreign debt compared to its GDP is 30%.

Republican MP Hamlet Harutyunyan also saw nothing negative in taking another loan, “the issue is not whether taking a loan is necessary or not. The issue is that they be used purposefully and we catch those who try to pocket the money. The fact is that America has a lot of debt…. I think, only De Gaulle has succeeded in receiving his debts back from the US, Gaddafi tried too, he demanded it but we saw what happened.”

Geghamyan disagreed with his last thought; “They didn’t kill Gaddafi for him demanding debt but because he wanted to create a golden dinar (he means Gaddafi’s plan to create a unitary currency for Africa).” Alexander Arzumanyan who ran the meeting asked the MPs to stop swaying away from the topic.

As a relust, the committee gave a positive conclusion to ratifying the plan on taking the loan. Those voting against all loan plans were Nikol Pashinyan and Alexander Arzumanyan, and for one loan, Rule of Law MP Mher Shahgeldyan joined in voting against.