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Italy to give Yugoslavia economic aid

ROME -- Italy and Yugoslavia Friday signed a memorandum of understanding covering a three-year program of cooperation and development under which Italy will provide $4l7 million in aid and credit.

The agreement, signed by Foreign Ministers Giulio Andreotti of Italy and Budimir Loncar of Yugoslavia, is the first of its kind signed between the two neighboring countries.

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Details of the accord were worked out at a meeting Thursday between visiting Yugoslav Prime Minister Branko Mikulic and Italian Prime Minister Giovanni Goria, attended by their foreign ministers and ministers of foreign trade.

It was the first visit to Italy by a Yugoslav government chief in 20 years.

A foreign ministry communique said the 'memorandum of understanding' signed Friday provides for $292 million in financial aid in the form of credit and grants, plus about $125 million in commercial credit.

The program will cover 1988 and 1990 and will include the financing of projects to be agreed between the two countries to encourage the formation of mixed companies and to strengthen the Yugoslav production system.

A sum of $58 million will be devoted to joint action in the field of education, higher education and scientific research to permit the transfer of appropriate technology.

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Prime Minister Goria described the cooperation agreement Thursday as 'an act of faith' in the Yugoslav economy, now experiencing an economic crisis with $19 billion in foreign debt and inflation running at an annual rate of 150 percent.

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