The Swiss government has offered Yugoslavia a short-term bridging loan of SFr350 million ($195 million). The money will be used to help pay back the arrears owed by Belgrade to the European Investment Bank.
The loan will allow the European Union to proceed with planned financial aid to Yugoslavia, worth over SFr450 million. Once the first EU transfer is completed, Belgrade should repay the Swiss within seven days.
The Swiss government agreed to make the loan available after the Balkan nation asked for financial help. Yugoslavia is part of Switzerland's voting group at the International Monetary Fund.
The authorities believe the loan will help lighten Yugoslavia's monetary woes. The country has virtually no financial reserves.
The loan, announced on Tuesday, comes during a visit to Bern by a Yugoslav delegation, which is seeking Swiss assistance in tracking down public assets suspected to have been salted away in Switzerland by the former president, Slobodan Milosevic.
The group is led by the president of the Yugoslav commission in charge of investigating financial fraud, Aleksandar Radovic. Belgrade accuses Milosevic and some of his close associates of illegally transferring public funds into foreign accounts between 1995 and 2000.
The delegation in Bern is expected to formally submit the required documentation which Switzerland needs to begin judicial cooperation with the Yugoslav authorities.
Switzerland has already started investigating both money and gold transfers from Yugoslavia into Swiss bank accounts. So far, no funds related to the former Yugoslav president have been found.
However, SFr12 million ($6.7 million) belonging to a dozen of Milosevic's former associates has been frozen.
Switzerland is also investigating 300 kilogrammes of gold which were brought into the country during Milosevic's regime.
swissinfo with agencies