Serbia Makes Guarantee Fee Mandatory, EPS at 585 Million

The state paid banks 25.6 billion dinars (about 218 million euros) in 2025 on guarantees it had issued for public companies that failed to service them. That single figure explains why the Serbian Finance Ministry has now published draft amendments to the Law on Public Debt, turning the fee charged for a state guarantee from something the state may collect into something it must collect.

The draft touches only two articles. The text in force says the Republic “may” charge a fee for a guarantee it issues. The replacement wording leaves no room for reading:

“A fee shall be charged for the issuance of a guarantee”

the Finance Ministry states in the draft. The same article leaves it to the finance minister to set the conditions, the application procedure, the content of the application and the size of the fee. No rate appears in the draft, so the real price of a guarantee will be known only when the secondary regulation is published.

Consultations ahead of the formal public debate run until August 4, 2026, and companies, state bodies, organisations and associations can submit proposals.

Who actually pays the fee?

The list of beneficiaries is short and predictable. As of September 2025, Elektroprivreda Srbije (EPS) was first with 585 million euros in guaranteed loans, Srbijagas second with 470 million euros, and the railway companies held roughly 190 million euros.

At the end of March 2026 the total guaranteed debt stood at 199.3 billion dinars (about 1.7 billion euros), with EPS and Srbijagas accounting for 122.6 billion dinars (about 1.05 billion euros) of that. The new fee is therefore not a charge spread evenly across the public sector but a cost aimed, before anyone else, at two energy companies.

What stays the same

The condition under which a guarantee can be issued at all remains untouched. The Republic may still guarantee only loans that finance capital investment:

“The Republic may issue guarantees (…) only if the loan proceeds finance the capital investments of the debtor”

reads the law currently in force. That clause exists to stop guarantees from covering the day-to-day liquidity of a public company, the practice that produced the called guarantees the budget later had to cover.

The size of the exposure

Indirect obligations, meaning guarantees, stood at around 1.66 billion euros on May 31, 2026. Of that, 462.2 million euros were domestic guarantees and 1.21 billion euros external ones. At the same date Serbia’s public debt was 41.14 billion euros, or 43.7% of GDP, which puts the guaranteed portion at slightly above 4% of the total.

That share stays small for as long as the guarantees are not called. Once they are, the obligation moves to the budget, where it is measured in billions of dinars a year, as it was in 2025.

The next document that matters is not the law itself but the finance minister’s act setting the rate. Until that number appears, public companies know they will be paying, without knowing how much.