By Aleksandar Vasovic
BELGRADE (Reuters) - A top Serbian official said on Thursday he had asked the United Arab Emirates for a low-interest, long-term loan to repay some of the country's debts and invest in its ailing economy.
Serbia's economy is expected to grow about 2.5 percent this year, but is weighed down by a rising deficit of 4.7 percent of GDP and debt at 65 percent.
Belgrade is planning to tap markets with a $1 billion Eurobond this year and borrowing on the domestic market. It has also sought sovereign creditors including China, Russia and the United Arab Emirates.
"I have recently ... asked my friend, Sheikh Bin Zayed, for $2 billion or $3 billion, at the lowest interest rate, for 20 to 30 years," Deputy Prime Minister Aleksandar Vucic said in a TV broadcast, referring to the UAE's Crown Prince Mohammed Bin Zayed.
Vucic, also head of the Serbian Progressive Party, the senior member in the nationalist-socialist coalition, did not say whether Bin Zayed had agreed to a loan.
Serbia secured a 400 million-euro loan from the UAE earlier this year to invest in agriculture and last month the wealthy Gulf state's Etihad airline purchased a 49 percent stake in Serbia's indebted Jat Airways.
To lure investors, Serbia must seek a new loan deal with the IMF. The lender froze a previous 1 billion euros ($1.33 billion) deal early last year over broken spending promises.
Vucic said Serbia planned to limit its borrowing in the future to "to halt its debt at the level of between 70 and 75 percent of GDP".
"We would use a billion from that (the UAE's) money to repay the most difficult debts, we would therefore lighten our public debt and I believe the IMF would support that, while the rest will be invested in our economy," he said.
Vucic also said Serbia has hired former IMF chief Dominique Strauss-Kahn to join in an advisory role about country's debt. Serbia also hired former Austrian Chancellor Alfred Gusenbauer, he said.
"We have already spoken, he (Strauss-Kahn) was not happy when after seeing what awaits him, but he already proposed several solutions," Vucic said.
Strauss-Kahn's career at the IMF and French presidential hopes disintegrated in 2011 when he was accused of sexually assaulting a chambermaid in a New York hotel. The charges were later dropped.
Separately, a French court said last month it would try Strauss-Kahn on charges of pimping. Strauss-Kahn's lawyers said there were no legal grounds to try him.
Asked whether he was concerned about Strauss-Kahn's public image, Vucic said that the private life of former IMF head was not something that would question his expertise.
"For example, the grand (painter Pablo) Picasso, treated women and children badly, but some other people like Hitler loved women," he said adding: "If you want to judge Strauss-Kahn by that, than you may have a bad judgement."
(Reporting by Aleksandar Vasovic; Editing by Andrew Roche)