Debt Reduction Strategies and Risk Management

Workshop: December 4 – 6, 2018ILjubljana, SloveniaIBudget Preparation and Execution

The main goal of this learning initiative was providing better understanding of the importance of public debt management for the overall macroeconomic stability of the economy. The soundness of the debt policies and strategies as well as the aspect of incorporating the risk element, as an integral part of a wider strategic debt management framework, in the debt management process, was also be elaborated. Furthermore, the workshop gave insights into the possibilities for government and local borrowing on international and domestic markets from the perspective of credit rating agencies.

What you learnt

Government debt is one of the basic instruments, for financing public expenditures. Given the severe macroeconomic consequences of sovereign debt default, and the magnitude of the ensuing output losses, prudent risk management is needed. The European Sovereign Debt Crisis is the latest example that raised the significance of the sustainable public debt and risk management in the government sector.

During this learning initiative we discussed how to manage public debt portfolio in an optimal way, based on cost - risk criteria, in order to hedge government position from internal and external shocks. Thus, we elaborated the various types of debt instruments and learnt how to chose the right ones in a certain moment, based on the latest global economic trends, the performance of the national economy and the preferences of the investors on the financial markets. In line with this, we explained the role of the financial markets and the credit rating received, provided by rating agencies, in the process of financing and managing public debt.

Finally, we tackled local government borrowing, as a source for implementing of local governments’ investment projects. We learnt how to build proper and comprehensive legal framework, make self-assessment of creditworthiness and receiving external credit rating, which are the essential activities that a local government should undertake if it would like to receive external funding for its projects, no matter whether it is intended for short-term purposes or for capital investments.

How you benefited

This learning initiative was designed to support finance officials in designing and implementing optimal and debt and risk management strategies in their country. Additionally, it provided insights about the functioning of the capital markets and the role of rating agencies.

Upon completing this learning initiative, participants were able to:

  • Explain the objectives of a sound public debt policy
  • Understand the role of risk management in the process of debt management
  • Identify strategic benchmarks as risk management tools
  • Receive insight in the work of rating agencies when determining sovereign rating
  • Explain most important economic and risk concepts that should be taken into consideration before deciding for external borrowing
  • Examine possibilities for government borrowings on both domestic and international financial markets

Since the learning initiative was designed as partaking, the participants were actively engaged in discussions and group exercises, and encouraged to share their country’s experiences and challenges related to debt and risk management issues. It provided a ground for sharing experiences and best practices between participants and thematic experts from the SEE region, and beyond.

Who attended

Public officials from the CEF Constituency countries and the other SEE counites are welcome to apply. Invited are those officials who are working at ministries of finance, debt management agencies and central banks, who actively deal with: public debt management; risk management; execution of the debt management transactions; communication, coordination and reporting to international and domestic financial institutions as well as credit rating agencies. The applications from individuals who are not public officials will be considered according to the space availability.

The event will be delivered in English and no translation will be provided.

Practical information

No fee will be charged, and lunches and refreshments will be provided for all selected participants. The applicants need to obtain funding from their sending institution or other donor(s) to cover visa, travel, accommodation, and meals costs.

Applications need to be submitted no later than November 2 via online application form.

Candidates will need to be approved by the CEF; selected candidates will be notified by November 9.


Gonzalo Caprirolo - Chief Economist and Head of the Policy Analysis Unit, Ministry of Finance, Republic of Slovenia

Mr. Gonzalo Caprirolo is Chief Economist, head of the Policy Analysis Unit at the Ministry of Finance. He was senior economist at the Institute of Macroeconomic Analysis and Development (IMAD). He worked as Chief Economist of the Ministry of Finance for about 8 years. He was consultant at the International Monetary Fund (Washington), and UNDP at the Central Bank of Bolivia. He was Assistant Director for Dumping and Countervailing Duty Investigations at the Mexican Ministry of Trade. He was senior analyst at Mexican/Canadian government contractor in charge of managing public sector Information Systems.

He is currently head of the Slovene delegation to the Output Gap working group of the Council of Europe. He led the Slovene delegation to the Economic Policy Committee (EPC) of the Council of Europe and Chairman of the EPC’s Labor Market Working Group. He was member of BRUEGEL steering committee (Brussels-based think tank). He represented Slovenia in the Sub-Committee on IMF issues of the Economic and Financial Committee of the Council of Europe and He was member of the ad-hoc FSC - Ageing & Financial Markets devoted to the analysis and implications of ageing populations for financial markets. He was delegate to the Economic Policy Committee at the OECD.

Research and publications include various topics such as: Euro area crisis and policy response, fiscal multipliers, fiscal framework, tax reform, monetary integration, the impact of pension reform on fiscal stance, impact of capital inflows, current account sustainability, fiscal stance and debt sustainability, public sector debt management framework, government’s debt portfolio management, banking system and minimum wage.

He holds a master degree from Columbia University (MIA), New York and master degree in economics from El Colegio de Mexico, Mexico City.

Marjan Divjak, Director General, Ministry of Finance, Slovenia

Marjan Divjak is the Director General of the Treasury Directorate at Slovenia's Ministry of Finance. The Treasury Directorate, led by Marjan Divjak, was awarded Sovereign Risk Manager of the year 2017 by the Risk Magazine. His responsibilities are funding, liability management, state budget liquidity management and Single Treasury Account operations. He previously worked in the middle office of the Treasury Directorate. He has also been an adviser in the Office of the Prime Minister. He is a member of the supervisory board of the SID Bank. Marjan Divjak is an external expert in the Monetary and Capital Markets (MCM) Department of the International Monetary Fund (IMF).

He holds a BEng in civil engineering from the Faculty of Engineering, Leeds University (UK), an MSc in business administration from the Faculty of Economics, Ljubljana University (SLO), an MA in management of development from the Faculty of Political Sciences, Turin University (ITA), and an MSc in mathematical finance from the Mathematical Institute, Oxford University (UK).

Gjorgji Josifov — Assistant Vice President – Analyst Moody’s

Gjorgji Josifov joined Moody’s in 2011 as Assistant Vice President – Analyst, covering a comprehensive portfolio of credit ratings of regional and local governments as well as government related issuers in various countries of Central and Eastern Europe including Bosnia and Herzegovina, Croatia, Czech Republic, Estonia, Greece, Hungary, Latvia, Poland, Romania, Serbia, Turkey and Ukraine.

Prior to joining Moody’s, Gjorgji served as Chief of Party of the USAID-funded Macedonia Local Government Project (2007-2011). Along with the Chief of Party position he managed the Capital Budgeting and Municipal Credit project components. He has more than 15 years of experience in public policy reform and financial management, with 10 years working on improving local government finance and municipal service delivery in South-East Europe.

Gjorgji holds a Master Degree in European Integration and Regionalism from Karl Franzens University of Graz and a Certificate in Intergovernmental Fiscal Relations and Financial Management from Central European University of Budapest. He earned a BS in Economics from University of “Ss. Cyril and Methodius" in Skopje.

Branko Drcelic, Consultant

Branko Drcelic graduated from the Faculty of Economics of Belgrade University. He was director of the Public Debt Administration at the Ministry of Finance of the Republic of Serbia in period January 2012 – August 2018. He had responsibility for the management of the Republic of Serbia public debt. Before joining the Public Debt Administration, he was Deputy Treasurer at the Treasury Administration - Ministry of Finance of the Republic of Serbia from December 2009 to January 2012. He started his career at the Public Debt Unit in the Ministry of Finance and Economy in 2003. From 2005 until 2009, he worked for the Electric Power  Industry of Serbia, Delta Generali Insurance, Atos Consulting Ltd., ABS Minel and Safege doo.


This learning initiative was supported by:

Slovenia's Development Cooperation Ministry of Finance, Slovenia