Serbia Today Economy

Serbian citizens owe to banks EUR 560 on average

2010-07-01T03:40:00.001-07:00

Belgrade, June 26. (Serbia Today) - Average credit debt of Serbian citizens has reached EUR 560, while the delay in payment of loans is increasing every month by 0.1 percent, shows data which were presented on Monday. Although the General Secretary of the Association of Serbian Banks Veroljub Dugalic said the numbers were “still not alarming”, the delay in paying back loans represents “a worrying tendency which could represent a serious problem in the long run”, he added. Even before the global economic crisis there was a delay of 1.2 percent in the repayment of debts, so the present trend should not be cause for worry, Dugalic noted. He pointed out that loans which were taken out for refinancing demonstrate the fastest growth and that people raise them so as to consolidate other debts into one loan, or to pay off the incoming obligations.

Dinar dropped again

2010-06-30T02:18:00.001-07:00

Belgrade, June, 25 2010. (Serbia Today) - The value of the Serbian dinar (RSD) today dropped by another 0.17 percent. This came despite the National Bank of Serbia (NBS) intervention in the foreign exchange market worth EUR 20mn. The official exchange rate is RSD 103.7247 for one euro today, according to the central bank. The NBS on Thursday sold EUR 20mn in the interbanking foreign exchange market in order to reduce the excessive oscillation of the exchange rate. Since the beginning of the year, the NBS has sold a total of EUR 1.208bn, including yesterday's transaction. The NBS announced this week that its foreign exchange reserves dropped by EUR 37.1mn in May and amount to about EUR 10.7bn at the end of May, while the nominal value of the domestic currency dropped 3.4 percent in the same period.

Minister Dinkic: No VAT increase in next two years

2010-06-29T04:05:00.000-07:00

Belgrade, June 24. 2010. (Serbia Today) - VAT and payroll taxes will not be changed in the next two years, according to the statement of Serbian Minister of Economy and Regional Development Mladjan Dinkic "Taxes will not be changed by the end of this government's mandate," announced Dinkic on Monday. The reason for the Dinkic’s reaction was the announcements of the Finance minister Diana Dragutinovic of reducing the payroll taxes and increasing expenditure taxes. Dinkic said that the statement made by Finance Minister should be understood in a long-term context, adding that the idea is not so bad. "But, in view of the present situation and a relative acceleration of the revival of the Serbian economy, nothing should be changed now, but we should possibly think about it until after the economic crisis," concluded Dinkic.

No official decision on bonuses for public sector employees

2010-06-26T03:26:00.001-07:00

Belgrade, June, 22. 2010. (Serbia Today) - The government has yet to pass the decision on paying bonuses to public sector employees, which would probably happen in the fall, Serbian medias reported. There were no talks of the bonuses yet in the government, and it is expected to wait until the budget is rebalanced, which is expected to occur in September. “In the letter of intent with we sent last week to the International Monetary Fund (IMF), we announced that the bonuses would be paid by the end of the year,” sources from the government stated, adding that public sector workers and pensioners will not get the bonuses at the same time. It is not yet known who will receive the bonuses first. Public sector employees with wages of RSD 40,000 (about EUR 400) per month will receive a bonus of RSD 5,000, while pensioners who receive RSD 15,000 a month can expect a bonus of RSD 3,000. Similar bonuses are expected to be paid in early 2011 as well. A budget deficit of about RSD 140bn is expected after the rebalance. “We will discuss the document with officials of the Fund, who will be in Belgrade on August 20, and the new plan for the state budget will include more money for poorer municipalities as well,” the government sources said. About RSD 1bn from the most successful state companies is expected to be paid to 46 of the most poverty-stricken municipalities in Serbia

Jelasic: International context of Serbian currency weakening

2010-06-25T02:35:00.001-07:00

Belgrade June 21. 2010. (Serbia Today) - Outgoing NBS Governor Radovan Jelašić says the weakening of the Serbian dinar was the result of events in the international arena. The slide was also influenced by the weakening of domestic currencies in Hungary, Poland and Turkey, he disclosed. “If the dinar depended solely on the situation in Serbia, it should be strengthening to a certain extent because we have signed an agreement with the International Monetary Fund, additional funds have been provided, salaries and pensions are frozen, and prices are stable”, Jelašić opined during the presentation of the latest issue of Kvartalni Monitor (Quarterly Monitor) magazine. “The foreign exchange market is stable, too, so if we look only at the events here, they are positive, but obviously everything that comes from abroad is prevalent at the moment, which is why there was a certain weakening of the dinar in the recent period”, the governor said. “I am convinced that if we manage to continue with implementing the restrictive policy, we should see a somewhat stronger dinar, but things do not depend only on our internal conditions, as the dinar is now largely tailored by external factors”, he said. The NBS foreign exchange reserves of around EUR 10.7 billion are sufficient to prevent any major fluctuations in the daily exchange rate and provide enough transactions on the interbank foreign exchange market, but the exchange rate will still be determined according to the situation on the market, said Jelašić. After the Thursday NBS intervention of EUR 80mn, the dinar ended its six-day slide against the euro and strengthened by 0.46 percent, so the official exchange rate on Friday was RSD 103.4627 for one euro.

Serbian government debt reached 10,5bn E

2010-06-24T02:01:00.001-07:00

Belgrade, June, 18. 2010 (Serbia Today) - Serbia's government debt reached EUR 10.54bn at the end of May, which is 31.9 percent of the GDP, the Finance Ministry announced. Serbia's public debt aggregated to EUR 9.85bn at the end of 2009, which means that it was increased by EUR 691mn during the first five months of 2010, the ministry's website said. At the end of April 2010, Serbia's national debt was EUR 10.39bn, which means that during May it augmented for around EUR 150bn. Serbian direct liabilities totaled EUR 9.13bn at the end of May, with the internal and external debt reaching EUR 4.22bn and EUR 4.91bn respectively. The country's contingent liabilities totaled EUR 1.41bn at the end of May 2010. Serbia's government debt amounted to EUR 8.78bn at the end of 2008, which was 25.6 percent of the GDP.

Milosavljevic: Increase in electricity prices would be immoral

2010-06-22T03:31:00.001-07:00

Belgrade, June 16. 2010. (Serbia Today) Trade Minister Slobodan Milosavljević said that an increase in electricity prices at this moment would be immoral toward the citizens. He said that at a time when pensions and wages are frozen, it would be wrong to increase electricity prices. Serbian Electric (EPS) announced recently that it would ask the government to approve a price hike in the fall. “My stance is that I will be against an increase in electricity prices until the end of the year if wages and pensions stay froze,” Milosavljević said. EPS General Director Dragomir Marković said on Friday that the company has not backed down from its demand for one more price increase by the end of the year. He said that the conditions for this have already been met, adding that the EPS would ask for prices to be increase by 20 percent.

SNS supports ratification of SAA

2010-06-21T01:56:00.001-07:00

Belgrade, June, 15. 2010 (Source: Blic) - The Serbian Progressive Party (SNS) stated that it supports the announcements that the SAA between Serbia and the EU will be unfrozen. SNS official Nikola Selaković said that this act could lead to positive changes for Serbian citizens. He said, however, that the government is still keeping citizens in the dark regarding the entire EU integration process. “SNS is asking the current government, which is presenting EU integration as its greatest success, whether corruption is in accordance with these integrations, as well as the increasing number of unemployed people in Serbia, and the increased number of people using the national soup kitchens,” Selaković said. SNS official Marko Đurić said that everything “the current government has shown in relations with the EU is a charade, because real relations are found in actions, not in rhetoric.” “SNS believes that the current government, other than being socially irresponsible, is slowing down Serbia’s progress towards the EU,” Đurić said. He said that new parliamentary elections are needed in Serbia, adding that the largest parties of the ruling coalition have already started campaigning.

Jelasic: Inflation in June will be less than four percent

2010-06-21T01:54:00.000-07:00

Belgrade, Jun 14,. 2010. (Serbia Today) Outgoing National Bank of Serbia (NBS) Governor Radovan Jelašić announced that the inflation rate is expected to be less than four percent in June. The figure, according to him, will be about five percent at the end of the year. Jelašić added that prices do not depend only on the dinar exchange rate. The central bank chief told journalists that, apart from the exchange rate, prices depend on many other internal and external factors, adding that it is impossible to precisely determine the dinar exchange rate which may jeopardize the price stability, as "monetary economy is neither physics nor chemistry.” He stressed that Serbia's foreign reserves are high enough for an efficient "defense of the dinar" and added that a certain amount of foreign currency was sold on Monday only for dinars, so that there would be no large daily exchange rate fluctuations. Jelašić recommended that the future NBS governor should, in general, pursue the same policy that he pursued in the last "three plus six years", but added that "it will be up to him to decide on which course to follow.” The new bill on the NBS is before parliament. The debate on the bill is to begin this week, so the new governor is most likely to be elected at the end of June or beginning of July.

National bank wants to save the dinar

2010-06-18T03:07:00.001-07:00

Belgrade, June 12. 2010. (Serbia Today) Bank demand for Serbian dinars (RSD) was far greater than that for foreign currency at the 3-monthly foreign exchange swap auctions, said reports. The auctions were organized by the National Bank of Serbia (NBS). “The NBS swap bought EUR 10mn at weighted average swap points of 15,892, while no bank bids for the purchase of foreign currency were accepted”, according to a statement from the central bank. The NBS organizes foreign exchange swap auctions every three months with the aim to boost interbank foreign exchange swap trading and encourage development of the foreign exchange hedging market.

Dragutinovic: Privatization process continues

2010-06-15T02:45:00.001-07:00

Belgrade June 11, 2010 - (Serbia Today) Serbian Finance Minister Diana Dragutinović says the revenues from privatization in 2010 are expected to amount to EUR 1.6 -1.7bn.This figure would include the expected sale of the state's 40-percent stake in telecommunications company Telekom Serbia, which the minister expects will raise no less than EUR 1.5bn. Regardless of the deficit, the budget is solvent, having a sufficient amount of reserves of about EUR 600mn and consequently no problems with deficit financing”, Dragutiović said at recently held summit gathering governors of central banks and finance ministers of Southeastern Europe, held in Montenegro

Saylor: Serbia is not attractive for American companies

2010-06-12T04:05:00.001-07:00

Belgrade June 09. 2010 (Serbia Today) - President of the U.S.-Serbia Business Council John Saylor said that “Serbia is not offering anything that would attract American companies and investments. “The U.S. simply is not that interested in this market”, he said. He added that “Serbia is not an economic factor for the U.S., but a political one, if you take into consideration its location, size and Washington’s interests to secure regional stability.” “The current amount of economic and trade relations is very small, though we had important investors in Serbia at one point. Russia is now the main trade partner of the country, and then Germany and the Central European and Balkan countries”, Saylor said. “There are very few people here who know about Serbia or Serbian products,” he said, adding that the Serbian government needs to open new economic headquarters outside of just Chicago and include one in Washington, because that is where the World Bank, International Monetary Fund and many larges businesses are located. Saylor said that Serbia cannot allow “political questions, such as Kosovo, to dominate bilateral relations.” He said that Serbia “in looking for direct foreign investments, must define its most attractive products as a supporting factor for foreigners.” He said that Serbia must also improve its infrastructure, since companies that come to Serbia will not only be selling their products in Serbia. Saylor reminded that U.S. ambassador to Serbia Mary Warlick said that Serbian tourists and businesspeople will be allowed to receive American visas for a ten-year period. “This is excellent, and at the same time, it is not easy to get an American visa. A liberal visa approach would encourage people to come to the U.S. and vice versa, to investigate business possibilities, which would be in the interest of both sides,” Saylor said

Support for Serbian construction industry

2010-06-11T03:16:00.001-07:00

Belgrade, June, 08. 2010 (Serbia Today) - The Serbian government recently adopted a program to support the construction industry of Serbia, worth about 30 billion dinars (about 300 million EUR). Serbian Economy Minister Mladjan Dinkic announced that the program will be implemented over the next year and a half and that the government and local administrations should provide three billion dinars for the program. According to him, the remaining 80 percent of the funds for the program shall come from loans by commercial banks. Dinkic said that the program will help construction industry by granting the dinar loans with a maturity of five years and one year grace period and annual interest will be the reference interest of the National Bank of Serbia, plus 2.5 percent. "The program was adopted to promote the recovery of the construction Industry of Serbia which since April last year to April 2010th has experienced import declines from 11.3 per cent, "he said

Currency continues sliding

2010-06-10T02:50:00.001-07:00

Belgrade June, 07. 2010 (Serbia Today) - Economic experts believes that the Serbian dinar (RSD) will continue to slide during this year and could reach the value of RSD 105-106 per euro, reported Tanjug news agency. Experts also believe that an introduction of the euro as the currency in Serbia would not be received well by the European Central Bank. Serbian president's economic advisor Jurij Bajec said that it is hard to predict further weakening of the dinar, stating that it should not exceed the RSD 105-106 mark. “That is a lot too, considering that inflation will not be greater than six percent by the end of 2010”, he told Radio Television Serbia. Bajec said that the long-term solution for strengthening the dinar would be to improve exports and attract direct investments, adding that exports have increased by 11 percent in Serbia during the first four months of the year. He said that figure is still higher in some neighboring countries, if measured according to exports per capita. When asked how to react to the domestic currency situation, the candidate for the new National Bank of Serbia governor, Dejan Šoškić, said that selling foreign currency from the reserves would only have a short-term effect on stabilizing the dinar. “Long-term stabilization is only possible by increasing the competitiveness of the Serbian industry, increasing exports and attracting foreign investments” Šoškić said. He said that there are two ways to introduce the euro as an official currency – “unilaterally like Montenegro and Kosovo, or by becoming an EU member-state.” Šoškić also said that the ECB would not react well to the former, since Serbia has a high budget deficit, adding that the country would have to decrease spending, prices, wages in the public sector and pensions in order for this to be acceptable, which would not benefit the citizens. Opposition DSS economic expert Nenad Popović commented on the same subject to say that the dinar’s value is a telltale sign of the current situation in the Serbian economy. He stated that the stability can be defended in the next five to six month with the help of the money from the International Monetary Fund arrangement. However, Popović also noted that Serbia must improve its exports and economy and attract foreign investors in the next year in order to “pump in fresh money” and stabilize the domestic currency.

Serbia gets the new law on electronic communication

2010-06-10T02:48:00.001-07:00

Belgrade, June, 07, 2010 (Serbia Today) - The new law on electronic communications will bring a more open market, and better consumer protection, announced the Minister of Telecommunications Jasna Matic. She stressed that in practical terms, the standards that apply in Europe and will also apply to all service providers in the telecommunications and postal services in Serbia. In the future, in the Serbian market, telecommunications services will be able to provide everyone who meets the technical and financial requirements. The license of the state, except in the fixed telephony will no longer be required. For citizens it means better protection, more competition, better service and probably lower prices. Draft Law on electronic communications should be better to protect service users and will apply to all current and future telecommunication operators.

NIP Minister: Infrastructure program starts in June

2010-06-09T04:06:00.000-07:00

Belgrade, June, 04. 2010 (Serbia Today) - An infrastructure development program worth EUR 150mn will start in June, NIP Minister Verica Kalanovic has stated on Tuesday. The resources will be invested in the realization of projects in the area of traffic, education, health and institutions of culture and sports, while concrete projects will be presented during the month of June. Kalanovic told Belgrade daily Večernje Novosti that the program would provide works worth RSD 15 bn for towns and municipalities in the coming period, adding that “taking out loans to invest in infrastructure is always profitable”. The Ministry for the National Investment Plan (NIP) provided EUR 75mn from a European Investment Bank loan, while the rest will be provided by local self-governments and the state, she explained.

According to Serbia's Mining and Energy Minister Petar Škundrić and Albanian Economy, Trade and Energy Minister Dritan Prifti meeting was very success

2010-06-09T04:01:00.001-07:00

Belgrade, June, 04. 2010 (Serbia Today) - Serbian and Albanian officials, during their recent meeting in Tirana, discussed improvements to the two countries’ economic cooperation and especially cooperation in the field of energy. Škundrić and Prifti told the media after the meeting that the visit was productive and constructive and that it included friendly talks about the two countries' economic ties. The two ministers also announced that the Memorandum on Economic Cooperation of Serbia and Albania will be signed within the next few months, during Prifti’s visit to Belgrade, and pointed out that the document would be a basis for further cooperation. “Although this is our first meeting, we’ve spoken openly, which points to a need for our countries to intensify cooperation in all areas of the economy, and energy has the most important place in this cooperation,” the Serbian minister pointed out. He emphasized that Serbia and Albania should have a series of joint projects in the field of energy, as well as initiate regional projects, “which are also important for third parties and for Europe as a whole”. “The potential for economic cooperation are ten times what is currently taking place between Serbia and Albania”, Škundrić said, and added that future economic cooperation should also contribute to better cultural ties, friendlier relations between the two countries. He told his Albanian counterpart that Serbia was planning on becoming the region's leader in the field of energy in the next five to seven years, and added that Serbia and Albania should participate in joint gas infrastructure projects. His host said that Škundrić's visit was “historic and productive”. “We’ve talked about how to build cooperation which both countries will benefit from, and we’ve identified in which fields we want to cooperate in the future, such as energy and road infrastructure,” Prifti explained. He said that Serbian investment was welcome in all economic sectors in Albania, that his country was interested in “natural gas interconnections” with Serbia, and that it would “consider the offer”. While in Tirana, Škundrić also met with the country's prime minister, Sali Berisha. A statement after the meeting said that they discussed ways of improving economic cooperation and that the meeting was “constructive, despite the differences the two countries have regarding the important issue of Kosovo.”

Ljajic: IMF negotiations involved social policies

2010-06-07T02:54:00.000-07:00

Belgrade, June, 02. 2010 (Serbia Today) - The latest negotiations with the IMF were geared towards social policies, said Labor Minister Rasim Ljajić for Belgrde daily Vecernje novosti. He told daily Večernje novosti that almost the entire package of measures agreed on between Serbia and the International Monetary Fund (IMF) could be called “social.” Ljajić said that RSD 6.5bn would be given to those who need it the most. “It was agreed that we would use RSD 2bn to help workers in the public sector and another RSD 2bn for pensioners…Another billion will be given to the most vulnerable municipalities and another 1.5 billion will be spent on typical social contributions”, Ljajić said. He said that single mothers will have 20 percent more income thanks to the agreement and that RSD 252mn will be set aside for the work of 69 soup kitchens and for opening 10 more by the end of the year. “This money will be enough for the national soup kitchens to work without distraction, which is very important to us, because there are 50,000 people who are getting their only meal of the day from these soup kitchens”, Ljajić said.

NIS expects to turn profit

2010-06-07T02:52:00.001-07:00

Belgrade, June, 02. 2010 (Serbia Today) – Serbian Oil Industry (NIS) according to the company's General Director Kirill Kravchenko expects that it will turn a profit in 2010 – for the first time in the past several years. Kravchenko told a company monthly that current cost cuts, changes in product assortment, processing and sales structure should play a key role in achieving that goal. “During last year we managed to halt the tendency of loss of growth. From February until December 2009, the NIS net profit was RSD 2.7bn (some EUR 26mn) ”Kravchenko said. Kravchenko said he regretted the fact that NIS failed to compensate for losses created in the first trimester of 2009 which resulted from the global financial crisis, so that loss was recorded at the end of last year.

Serbia and the IMF reached an agreement

2010-06-05T02:58:00.001-07:00

Belgrade, June, 01. 2010 (Serbia Today) - The Serbian government and the IMF have reached agreement in a talks on the fourth revision of the stand-by arrangement, announced the Minister of Finance Diana Dragutinovic on Thursday. Serbia will now be able to use another tranche in the amount of EUR 380mn, with the loan worth a total of EUR 2.9bn. Finance Minister also noted that the slowing economic growth saw the projected GDP rise from two to 1.5 percent for this year, and from four to three percent for 2011. The minister also told reporters that public sector salaries and pensions would remain frozen this year, but that those who are paid from the budget would receive bonuses in the second half of 2010. Dragutinovic announced that tax system reforms would start on January 1, 2011. The visiting IMF mission also discussed the issue of legislation related to fiscal responsibility as they were meeting with Serbian officials. Serbia has so far withdrawn approximately EUR 1.3bn of the IFM loan.

End of Serbia and IMF negotiations

2010-06-03T02:31:00.001-07:00

Belgrade May 31. 2010. (Serbia Today) - Serbian Prime Minister Mirko Cvetkovic said that the government reached an agreement with the Mission of International Monetary Fund (IMF) in the fourth stage of negotiations about their loan, which is worth 2,9 billion EUR. Serbian Prime Minister did not specify details of the agreement, but he announced that it will be released soon. Reporting about negotiations Belgrade daily Blic announced that Serbia will keep public sector salaries and pensions frozen at the same level this year. Instead of giving those paid from the state budget a raise, the government will make two bonus payments worth RSD 5,000 (some EUR 50) each, in October, and again in December, according to the article. The newspaper writes that this will be the likely outcome of the ongoing negotiations held between Serbian government officials and a visiting IMF delegation. Serbia has a stand-by arrangement worth a total of EUR 2.9bn with this international financial organization. When the IMF and the Serbian government negotiate the next revision of the deal in August, the issue of public sector salaries and pensions will be revisited, writes the daily. Tax system reforms have only been mentioned in passing this time, the article claims, while the subject will be revisited in the summer. This means that there will be no change to the VAT level – “at least not until next year. ”According to the newspaper however, it remains to be seen whether the RSD 5,000 bonuses will be distributed to all public sector employees, or only those with lowest income.

NBS: Ratio between supply and demand responsible for dinar sliding

2010-05-31T02:04:00.001-07:00

Belgrade 25. May 2010. (Serbia Today) - President of the National bank of Serbia Council Dejan Šoškić says that a reason for the dinar sliding to over 100 for one euro is the ratio between supply and demand. The candidate for the next central bank governor added that Serbia has no competitive export-oriented economy and is not attractive enough for direct foreign investments. Šoškić believes that there is a possibility that the relationship between the dinar and the euro in the domestic market is partly caused by the expectation that the crisis epicenter in the eurozone will have negative effects on its immediate surroundings. In an interview published by the Belgrade-based daily Vecernje Novosti, Šoškić assessed that a more "aggressive" defense of the exchange rate involving intervention from foreign currency reserves would give short-term results, and would also be expensive for the country and lead to additional debt. "A more aggressive defense of the exchange rate would possibly make sense if it would remove the short-term and significant imbalance in the foreign exchange market, caused by speculative or psychological reasons. I believe that, so far, the movements on the foreign currency market have been neither unexpected nor alarming.” Šoškić pointed out that banks should not accrue further foreign debt, adding that Serbia's indebtedness is growing rapidly and that the public debt level should not increase any more. He also told the newspaper that he agreed with Prime Minister Mirko Cvetković who said recently the exchange rate was not the problem, but rather the euroisation and the “hidden two-currency system”. Šoškić expects the current talks with IMF officials concerning the ongoing stand-by arrangement worth a total of EUR 2.9bn to be successful, and says that if Serbia were to increase public sector salaries and pensions, the country would “likely lack money for planned public investments in infrastructure”.

Summit manufacturer of parts for automobiles 25th May in Belgrade

2010-05-29T02:26:00.001-07:00

Belgrade, May, 24. 2010 (Serbia Today) – International set of manufacturers of parts for the auto- industry will be held in Belgrade on 25 May. More than 130 leading companies in the area of automobile industry from 17 countries will take a part on the summit. Advisor to the Ministry of Economy Aleksander Ljubic said on Thursday that the goal of the summit is to encourage the development of automobile industry in Serbia and investment, as well as job creation in Serbia. He added that some of the advantages of Serbia are high-quality workers, a strategic partnership with Fiat, agreements on free trade and access to market of nearly 800 million people, encouraging government action to create new jobs. Fair organizers are the Ministry of Economy and Foreign Investment Agency.

NBS: Recovery of Serbian economy

2010-05-29T02:23:00.000-07:00

Belgrade, May, 22. 2010 (Serbia Today) National Bank of Serbia (NBS) estimated that at the end of this year and early next year inflation will be about five percent, while the growth of gross domestic product (GDP) will be about 1.5 percent. Vice governor of NBS Bojan Markovic said that inflation rate in April was 0.6 percent, while the prices from April 2009 to April 2010 increased by 4.3 percent. In the second quarter there is expected further decline in inflation (about 4 percent)
while the rest of the year will have the projected level of 6 plus / minus 2 percent. In 2011, inflation will be about 4.5 percent according to projections NBS. According to Markovic, this year it expects modest growth in GDP 1.5 percent due to slow release of the world economy from recession and low domestic demand. "We estimate that growth in investment and net exports will give the greatest contribution to GDP growth in the future. Public and personal consumption will continue to decline, "he said. In the first quarter of 2010 for the first time since the beginning of the crisis Serbia recorded growth of GDP by 1 percent compared to the same period last year. Net export growth for 13.9 percent while import is reduced to 4.8 percent. NBS has estimated that a significant recovery in economic activity could be expected in 2011, when it is projected to grow three percent of GDP.

Finance Minister: Speculators depreciate dinar

2010-05-29T02:21:00.001-07:00

Belgrade, May, 22. 2010 (Serbia Today) - Minister Diana Dragutinovic said on Wednesday that the exchange rate changes were the consequence of “speculative strikes”, and that the National Bank of Serbia (NBS) should continue to prevent sudden changes of the dinar exchange rate. In a statement published by Blic newspaper today, she underscored that the amount of foreign exchange reserves guarantees that the domestic currency will be defended from speculative strikes. Asked what the state would do to prevent a further fall in the value of the dinar, Dragutinović said that “the state will contribute to an increase of foreign currency offer in the country by drawing the credit funds for the construction of infrastructure, which would stabilize the dinar rate.” The changes of the rate so far have not been dramatic, and in respect of the country's economic status they may be evaluated as desirable, the minister said. “The changes of the dinar rate in the past year and a half were mainly gradual, and both the real sector and citizens had enough time to adjust to the new rate. Serbia's foreign trade and payment balance show significant improvement signs, which did not happen by itself. The dinar depreciation, as well as the reduction of the domestic expenditure, particularly that of the state, contributed to that”, said Dragutinovic

Dramatic currency decrease

2010-05-25T02:28:00.001-07:00

Belgrade, May, 21. 2010 (Serbia Today) Serbian currency has decreased once again, making one euro worth over 100 RSD. It is the smallest value of Serbian dinar since the EU currency was introduced. According to the National Bank of Serbia (NBS), as of May 18, the EUR is worth 101,45 RSD. National Bank of Serbia (NBS) has sold 50 million euro in the interbank foreign exchange market to prevent the excessive daily exchange rate fluctuations. Since the beginning of the year, the Central Bank has sold 796,5 million EUR. The domestic currency was at its strongest this year on January 4, when the official exchange rate was RSD 95.97 per euro.

Negotiations with IMF begin in Belgrade, PM: Crisis “statistically and formally” over

2010-05-24T01:50:00.001-07:00

Belgrade, May, 20. 2010 (Serbia Today) - Fresh negotiations between Serbian officials and the International Monetary Fund (IMF) mission relating to the fourth revision of the stand-by agreement have started in Belgrade. At today's meeting they have analyzed the current economic situation and macroeconomic indicators for the first quarter. In the next two weeks they will discuss the further implementation of agreed measures. Immediately before the meeting Prime Minister Mirko Cvetkovic said that the crisis in Serbia was “statistically and formally” over. Cvetkovic pointed out that the real economic recovery in Serbia would come when the economy grows by a more sizable margin. He said that a high unemployment rate remains among the country's biggest problems, despite the fact that its growth had slowed. Cvetkovic reminded that the Serbian economy was forecast to gain two percent in 2010, while economic expansion should reach three to 3.5 percent in 2011. In the talks with the IMF, the Serbian government will be also speaking about increasing wages and pensions. It will however, be considered from the point estimates of economic trends by the end of the year, as well as fiscal effects, the government announced.

Milosavljevic : Serbia has reason for optimism

2010-05-21T05:16:00.000-07:00

Belgrade, May, 18. 2010 (Serbia Today) - Even though the economic crisis is not over, Serbia has a reason to be optimistic, climes Serbian trade Minister Slobodan Milosavljević. “The average citizen does not feel it yet, but the trends are positive and, finally, at the end of 2010, we can expect the first improvements in standard and buying power,” Milosavljević told Belgade daily Večernje novosti. He noted that decrease in prices can be expected, but not in seasonal food at markets, adding that it is important that the prices of electricity and communal services are stable after the March increases. As far as the price of fuel is concerned, he said that they are expected to decrease in the summer in order to avoid budget losses, since up to a million vehicles will pass through Serbia in the vacation season, and most avoid filling up in Serbia because the gas prices are the highest in the region. He said that if VAT were increased, all positive trends would be nullified, adding that buying power would be decreased. Milosavljević added that opinions are split within the government regarding an unfreezing of wages in the public sector and pensions. He believes that the time is not right yet. The minister also said that he does not believe that the crisis in Greece will have any major effects on Serbia. “One potential danger comes from Greek banks in Serbia, though they are stable and have a more quality placement on the market than they do in Greece and Bulgaria. NBS and the government have plans in case of problems with the banks, in order to secure liquidity and to avoid citizens from having problems,” he said.

Serbia is to pay 36million euros for a satellite

2010-05-20T02:19:00.000-07:00

Belgrade, May, 17. 2010 (Serbia Today) – Serbia will have to pay 36million euros to an Israeli company, in damages for not complying with an agreement for renting a satellite. Serbia will also pay RSD 1.38mn for the lost case with which it questioned the authority of the International Arbitration Court in Paris and its decision to award the Israeli company the damages. The contract with Israeli company Image Set signed former Defence Minister Prvosalav Davinic 2005th. In 2008, the court in Paris awarded ImageSet the money, but Serbia decided to take the case to a regular court in London. The State Public Attorney's Office stated that Serbia took its case to London in order to use all possible legal methods to circumvent the decision of the court in Paris, which ruled in Image Set's favor. Defense Minister Dragan Sutanovac expressed the hope that the Serbian judicial system will call to account those who are liable in this case. He said that the Israeli military industry is among the best in the world, and that the Serbian Army would have readily converted the money for a military equipment, but “it is uncertain whether there is such option”. The Serbian Supreme Court stated on April 16, 2009 that an investigation into the deal made five years prior by former Defense Minister Prvoslav Davinić would begin. He is suspected of abusing his position in forming the contract with the Israeli company for the use of the satellite. The contract was worth EUR 45mn.

There are currently 24 companies striking in Serbia, according to data of Serbian Ministry for Labor and Social Policies.

2010-05-20T02:14:00.000-07:00

Belgrade, May, 17. 2010 (Serbia Today) - Deputy Minister Radmila Bukumirić - Katić reminded that that 2009 ended with 80 ompanies striking at the same time. Bukumirić-Katić doesn’t claim that decreasing number of strikes means that the workers live better now. “I think that the workers understand that the state is doing everything it can to help them and to keep as many of them employed as possible, ”Bukumirić - Katić said. She announced that the draft law about strikes would soon be finished and presented to the public. “I think that we will reach an agreement with unions so that it would one of the instruments for giving workers more security,” she said.

Only one bid for consultant in Telekom Serbia

2010-05-19T02:45:00.001-07:00

Belgrade, May. 15. 2010 (Serbia Today) - The only bid in the tender for the adviser for the sale of state shares in Telekom Serbia, was submitted by a U.S. company “Citygroup global markets". This indicates that a Serbian state company will not attract a high price, said a consultant for foreign investments Mahmud Busatlija. He adds that now is the question of whether the bid is to stay in the game or it is a the idea of good strategy for selling. "That, unfortunately we can not know until we see whether the government chooses them and what would be their first steps in the consultation - whether to stay in this or to exceed more than 50 percent of shares for sale, which would slightly improve the cost," Busatlija said. Ministry of Finance announced that the tender committee will assess whether the technical part of the offer meets the conditions of the tender, which will be known within two weeks. In addition to 80 percent of the shares of Telekom owned by the state, the remaining 20 percent belongs to the Greek "OTE", in which Deutsche Telekom has 30 percent equity. Actually it was "Deutsche Telekom" until now mentioned as the most serious buyer of "Telekom Serbia". According to previous announcements from the Government, it is expected that the tender for the sale of shares of Telekom will be announced in the late summer or early fall.

Euro almost 100 dinars, foreign exchange reserves at record level, says Governor

2010-05-19T02:39:00.000-07:00

Belgrade, May. 15. 2010 (Serbia Today) - In Serbia the dinar is weakening against the euro, and European currency has reached a value of nearly 100 dinars. On the other hand outgoing National Bank of Serbia (NBS) Governor Radovan Jelasic said that the country's foreign exchange reserves are at a record high of EUR 11bn. Ahead of talks with the International Monetary Fund, Jelasic said that in those talks, there will be no discussion of withdrawing additional funds, but of not withdrawing them, since Serbia obviously does not need them. Discussing NBS's monetary policy for 2010 before the Serbian parliament's Finance Committee, Jelasic said that he expects the inflation rate will continue to drop by mid year, reaching 3.5 percent in June. According to him, the drop is a result of restrictive monetary policy, frozen salaries and pensions and the effects of the economic crisis. Jelasic noted that the reference interest rate has been in continual decline and is currently at eight percent. He said that the inflation rate at the end of March was 4.6 percent and that NBS forecasts have the April rate at 4.3 percent. He reminded that NBS has set the 2010 inflation rate at six plus-minus two percent. Year-end inflation was 6.6 percent in 2009.

Djelic askes ratification of SAA and warns that economic turmoils within the EU will affect the conditions for accession

2010-05-18T02:09:00.001-07:00

Belgrade/Brussels May. 14. 2010 (Serbia Today) - Deputy Prime Minister Bozidar Djelic said that the latest economic turmoil within the EU and the establishing of a European mechanism for the maintenance of financial stability of the EU member states will affect the conditions for EU accession, which will become more demanding and strict. According to him, the EU will no longer "tolerate the EU accession of countries that are not fully prepared," which can also be an opportunity to obtain greater support for Serbia and other Western Balkan countries. He has requested support from the European officials for the continuation of Serbia's EU integration. He also expressed hope that the ratification of the Stabilization and Association Agreement (SAA) could begin already in June, based on the positive report that he expects from the visit of Hague Prosecutor (Serge) Brammertz. After the meeting with Djelic, European Parliament President Jerzy Buzek referred to Serbia's fight against crime, particularly when it comes to the processing of war crimes, stressing that he is familiar with Djelic's position regarding this matter and that the EU expects concrete steps in that direction.

Dragutinovic : Serbia wiil not end up like Greece

2010-05-17T01:56:00.001-07:00

Belgrade, May 13. 2010 (Serbia Today) - The economic situations in Serbia and Greece should not be compared, since Serbia’s public debt is not as extensive, claims the Serbian Finance Minister Diana Dragutinovic. “Serbia’s public debt is not as great as in Greece” Dragutinovic said for daily “Vecernje novosti”. She added that the experience of Greece will be helpful, also pointing out that poor fiscal policies, not the financial crisis, led to Greece’s current situation. Dragutinovic said that there must be a limit to how much debt a country can incur. “That limit is 2.5 percent annually, to a maximum 40 percent of the gross domestic product,” Dragutinović said. Serbian Finance Minister also announced that Serbia is entering the new phase of talks wit IMF (beginning this week) in a very relaxed state, because it has fulfilled its tasks according to its IMF arrangement. She announced an agreement with the IMF that pensions have to be harmonized three times by April 2012 according to wages in the public sector, and that they would then begin to be harmonized with the cost of living.

Before the arrival of IMF serbian officials give optimistic estimates

2010-05-15T02:19:00.000-07:00

Belgrade May, 12. 2010 (Serbia today) - The International Monetary Fund (IMF) mission will arrive in Belgrade on May 12 to discuss the fourth revision of its stand-by arrangement with Serbia. The mission is expected to be in Serbia until May 26, and Albert Jaeger will once again lead the mission. According to earlier announcements, the talks will focus on tax and pension reforms and adopting the law for fiscal responsibility. Serbian Finance Minister Diana Dragutinovic announced earlier that Serbia is entering the new phase of talks very relaxed, because it has fulfilled its tasks according to its IMF arrangement. She said that it was agreed with the IMF that pensions have to be harmonized three times by April 2012 according to wages in the public sector, and that they would then begin to be harmonized with the cost of living. One task Serbia must complete is to draft a law for fiscal responsibility, after which IMF experts would look at the law, which is expected to decrease public spending within the gross domestic product (GDP) by 0.75 percent, with the goal of balancing out Serbia's budget by 2015. On May 15, 2009, the IMF approved the stand-by arrangement for Serbia worth a total of EUR 2.9bn, which is valid until April 2011. Serbia has already withdrawn EUR 1.3bn in three installments from the IMF arrangement.

Detecting code of the new punto 25th May

2010-05-13T02:48:00.001-07:00

Belgrade, May 08. 2010 (Serbia today) - The first model of car to be produced at the company “Fiat cars Serbia” should be disclosed on 25th May. Fiat's will send a delegation of top management, led by Vice President Alfredo Altavilla, to Belgade and participate in the Regional Conference of manufacturers of automobile parts. According to Novosti, it is expected to be a smaller B-class model. Dimensions of this class are the most famous of the "punto 188" and "grande" variant of this model. The Italian company laid out a five-year plan on 21 April. It expects to roll out 34 new models by the year of 2012, of which two new models will be produced in Kragujevac. The first contract stated that the production would start with class A, a small city car, "Topolino" and slightly larger B-class, this was changed due to the crisis and with the cooperation with Chrysler. It will start with the smaller B-class model, which is specifically designed for Southeast Europe market and it probably will be labeled with the redesigned Chrysler logo and exported to the U.S. Market.

NBS: Greek banks in Serbia stable

2010-05-12T01:38:00.001-07:00

Belgrade, May. 07. 2010 (Serbia today) - The financial situation of Greek-owned domestic banks is stable and they are liquid and solvent, a statement the National Bank of Serbia (NBS) announced on Wednesday.These banks, as well as other banking institutions operating in Serbia, are resistant to external shocks, which has been confirmed by stress tests conducted by the NBS on the methodology of the International Monetary Fund (IMF), and the checks carried out by a joint team of the IMF and the World Bank under the program of assessment of Serbia's financial sector, the NBS statement reads. In Serbia, there are four banks that are majority-owned by legal entities from Greece - Alpha Bank Serbia, Eurobank EFG, Piraeus Bank and Vojvođanska Banka - with a participation in the market of 16 percent. In 2009 these banks increased their credit activity by 10 percent, and the growing trend is continuing in this year. These banks, as members of the financial companies from Greece, operate in Serbia as independent legal entities within the frameworks of their banking groups, with the license of the NBS and their own capital, which enables them to properly and efficiently fulfill all their obligations towards their creditors, including the citizens.

Financial support from EU

2010-05-11T02:45:00.001-07:00

Belgrade, May 06. 2010 (Serbia Today) - Serbia and the EU will sign a new financial agreement in late May, writes daily Politika. The media announced that after the recently signed deal on the use of EUR 70mn from the IPA funds of the European Union for the year 2009, Deputy PM Božidar Đelić plans to sign a new financial agreement with the European Commission by the end of the May. As Politika reports, there are funds from the 2010 IPA program, based on which another 170. 000.000 EUR will be donated to Serbia for 26 projects. Money will be used for social and economic development of southern Serbia (Jablanica and Pčinj districts) and southwestern Serbia (Zlatibor, Raška, Morava and Rasina districts, and that will be supported with EUR 15mn from the 2010 package. Funds will also be used for infrastructural investments in institutions of high education (EUR 25mn) and supervision of works on Corridor 10 (EUR 10mn).EUR 2.5mn will be used for the fight against financial crime, while EUR 28mn will go toward the construction of the Leskovac-Vranje electrical substation.

Serbian Tycoons have no property in Serbia

2010-05-08T08:44:00.001-07:00

Belgrade, May 03 2010 ( Source: Blic) – As Serbian daily Blic writes, even six of seven businessmen who recently represented domestic economy in negotiations with the Government have their mother companies registered in Cyprus, Holland or British Virgin Islands. Companies behind which there are Miroslav Miskovic, Milan Beko, Miodrag Kostic, Toplica Spasojevic, Zoran Drakulic and Slobodan Petrovic are all registered in tax heavens where tax rates are smaller and where it is also possible to hide the real owners of the capital. According to official evidence by the Agency for economic registries, they have almost no property in Serbia. Thus Milorad Miskovic is always said to be the owner of ‘Delta Holding’ but one cannot see so in the Agency documentation. There it is written that ‘Delta Holding’ is owned by a company ‘Hemslade’ of Cyprus and Miskovic is mentioned as president of that company’s management board. The same case is with all other above mentioned businessmen. It is impossible to find out who owners of those companies registered in tax heavens actually are .

Serbia exits recession

2010-05-08T01:34:00.002-07:00

Belgrade, May 01, 2010 (Serbia Today) — Director of the Serbian Statistics Office Dragan Vukmirovic said today that Serbia has exited recession as its GDP in the first quarter of 2010 was higher by 1% compared to the same period in 2009. Speaking at a press conference, Vukmirovic said that this was the first GDP growth seen after a fall during four consecutive quarterly periods in 2009. The estimate of Serbia’s exit from recession is based on a flash estimate of quarterly GDP published by the Statistics Office for the first time today, he said. The main reason for introducing this methodology is to provide early estimates during a crisis, said Vukmirovic. The flash estimate was introduced in Europe because of the current economic crisis and is based on calculations over a period of 30 to 45 days after the end of a quarter, while a detailed GDP estimate is formed over 60 to 90 days after the end of a quarter, he explained. A recession is defined as two consecutive quarterly GDP falls but only one quarterly period of growth is enough to exit recession, he said. The depersonalized data from the first quarter of 2010 shows a 1.2% GDP growth compared to the last quarter of 2009, said Vukmirovic. Vukmirovic said the retail prices of goods and services in Serbia in April this year were higher by 1.1% compared to the previous month. Compared to the same month of 2009, the April price increased by 7.4%, he stated. The cost of living in Serbia in April 2010 month-on-month got higher by 0.6%, Vukmirovic added. In April 2010, compared to December 2009, the cost of living increased by 2.6%, he said. He explained that the difference between inflation and the cost of living is a result of various influences including rising prices of certain products. The Director of the Serbian Statistics Office said that industrial production in March 2010 was higher by 2.7% compared to the first three months of 2009. Compared to the 2009 average, production was higher by 2.4%. According to Vukmirovic, during January – March 2010, compared to the same period in 2009, industrial production grew by 2.8%

Serbia exits recession

2010-05-08T01:34:00.001-07:00

Dinkic: from May 1st only RSD loans

2010-05-07T02:28:00.000-07:00

Belgrade, April 30. 2010 (Serbia Today) - The Serbian government issued yesterday the Decree which will terminate use of the foreign currency (Euro) in calculating loans. Serbian banks are from May 1st required to give loans only calculated in dinars without using currency clause. This will apply both to business and consumer loans. "It will be much safer for the businesses, because they will avoid the risk of exchange rate and interest rates on diner loans, liquidity is only 7 per cent per year, which is significantly lower than the previous clause," Mladjan Dinkic, Minister of Economy, told reporters. According to Dinkić, in the first three months since the start of the implementation of the program of subsidized loans, government granted nearly 500 million Euros of subsidized loans to businesses and citizens. "It's almost the half the total amount from last year, when the banks approved 1.3 billion of subsidized loans," he said.

Government to adopt program for revival of industrial centers

2010-05-05T08:35:00.001-07:00

Belgrade, April 29. 2010 (Serbia Today) - Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic said yesterday in Novi Pazar that the government will adopt a special program in May for the revival of industrial centers. Dinkic, who visited Novi Pazar together with Minister of Labor and Social Policy Rasim Ljajic, said that this program will cover Novi Pazar, Nis, Kraljevo and Zajecar. He explained that the program will entail special incentives for investors who open new workplaces in these towns. For example, investors in Novi Pazar will have double incentives from the budget per new employee. The Minister said that this town has a very high unemployment rate of 50% and that the government will especially encourage investors who want to build new production plants and renovate existing ones. He added that an office of the Development Fund will be opened in Novi Pazar, which approves soft loans for active industries in underdeveloped areas. Dinkic explained that these loans require a mortgage in the amount of 50% of the loan, the annual interest rate of 2.5% is fixed and the repayment period is five years. These loans will help companies that employ workers in the furniture, textile, shoe and machinery industries. Dinkic and Ljajic spoke with Novi Pazar Mayor Meha Mahmutovic and with the region’s businessmen. At the beginning of the visit, the ministers visited the Tahirovic furniture factory. This company is an example of a successful industry which not only produces goods for the Serbian market, but for export as well.

New “Fiat Uno” from Kragujevac

2010-05-05T08:33:00.001-07:00

Belgrade, April 28. 2010 ( Serbia Today) - As Belgrade daily Blic reports, new version of the model Fiat Uno will be produced in Serbia and it is accepted that the first cars will be coming out of the assembly line from Kragujevac by the end of 2011. This news also appeared on several Italian websites specialized in auto industry news. It is accepted that press conference where Fiat will officially announce the production of a new model will be at the beginning of May in Torino. The same model will be produced in Fiat’s factory in Brazil. The new Fiat Uno will be presented to the public on May 7 in Brazil while the timing of the promotion of the Serbian model is not known yet. However, Nebojsa Zdravkovic Deputy Mayor of Kragujevac, confirmed for daily Blic that the factor in Kragujevac is well on the preparation road to start production of the new model. It is expected that the production of the new model of Fiat Uno will bring additional 10 thousand jobs for Kragujevac. As Fiat managers announced at their last visit to Kragujevac, Fiat will invest during this spring and summer around 1500 million Euros in car factory in Kragujevac.

Serbia, Italy set up Business Council

2010-05-04T06:26:00.000-07:00

Belgrade, April 27, 2010 (Source:B92) - Serbia and Italy set up a Business Council, which is aimed at promoting relations among companies and entrepreneurs of the two countries, in Belgrade yesterday. Deputy Prime Minister and Minister of Economy and Regional Development Mlađan Dinkić and Italian Minister for Economic Development Claudio Scajola signed a joint declaration on founding of the Business Council. Dinkić evaluated that the founding of the Council, such as those Italy had already set up with France and Germany, confirms the importance of the economic cooperation between the two countries, underscoring that Serbia's exports had marked a 13-percent growth since the beginning of the year and that the major part of those commodities was exported to Italy. He recalled that Italy had started important business projects in Serbia, such as the arrival of Fiat, announcing that talks will soon start with Italy's producer of car components Magneti Marelli on setting up capacities in Kragujevac. Dinkić recalled that a feasibility study for the reconstruction of the Belgrade-Bar railway, developed in cooperation with Italy's Italfer, will be completed by the end of this fall. He announced that a summit of producers of car parts, sponsored by Fiat and the Serbian government, will be held in Serbia on May 25. The minister recalled that there are about 250 Italian companies operating in different sectors in Serbia. Minister Scajola said that Italy wants to intensify political relations with Serbia and help Serbia get accepted in the European Union sooner. Scajola underlined that Italian entrepreneurs are very much satisfied with their business results in Serbia, announcing “a bigger investment impulse” in the coming period.

PM meets with reps of U.S. companies

2010-05-02T11:41:00.001-07:00

Belgrade, April 25. 2010 (Source: B92) - There's been good cooperation in creating favorable business environment for promotion of the Serbian economy, said PM Mirko Cvetković. He made the comment on Friday during a meeting with mangers and representatives of U.S. and other international companies that are doing business in Serbia and are members of the American Chamber of Commerce (AmCham). Cvetković pointed out that the top 2010 priority of the Serbian government is increase in employment rate and economic activity, the Serbian government's press office stated. Special attention was paid to the implementation of the regulatory guillotine, improvement of the legislation in the area of working relationships and real estate market regulations. “The government creates the business environment, while an active dialogue between state and economy is extremely important,” the prime minister underlined. AmCham President Skip Bornhuetter underscored that the chamber believes that consistent implementation of reforms is crucial for future attraction of foreign investments, and particularly of those reforms that refer to reduction of bureaucracy and administrative procedures. “In the period when the level of direct foreign investments is low, it is crucial to prepare the ground for the inflow of new investments and provide an impetus to the entrepreneurship,” Bornhuetter said.

160 million Euros loans for budget deficit

2010-04-30T19:12:00.000-07:00

Belgrade, April 24, 2010 (Serbia Today) - Finance Minister Diana Dragutinović signed loan contracts with three commercial banks on Wednesday. The loans worth EUR 160mn will be used to finance the budget deficit, a Ministry of Finance statement said. Marfin Bank, Erste Bank and Vojvodjanska Bank granted Serbia loans worth EUR 100mn, EUR 40mn and EUR 20mn respectively. The repayment period is five years, and the payments will be made in 48 equal installments, with a one-year grace period, the statement reads. It is further added that the interest rates approved by the banks are the most favorable ones that the state can get in the market for the time being. The granted interest rates are monthly euribor +4.5% fixed interest rate at Erste Bank, and monthly euribor +4.35% fixed interest rate at Marfin Bank a.d. Belgrade and Vojvodjanska Banka a.d. Novi Sad. The signing of the contracts was in keeping with the Budget Law for 2010. The contracts were signed on the basis of the Law on the indebtedness of the Republic of Serbia at Erste GCIB Finance I.B.V. Amsterdam, with Erste Bank a.d. Novi Sad as agent, Marfin Bank a.d. Belgrade and Vojvodjanska Banka a.d. Novi Sad.

“Role of NBS council won’t change”

2010-04-30T05:44:00.001-07:00

Belgrade, April 23. 2010 (Source: B92) - NBS Council President Dejan Šoškić said that there would not be changes made to the level of the council’s authority. Šoškić, who is candidate for the position of NBS governor, spoke in Belgrade on Tuesday to say that there were “many different solutions for the new NBS law,” but that officials are no longer considering changing the role of the council by giving it more powers. This means that there would not be any authorities taken from the Monetary Committee and given to another body of the central bank that has more members, Šoškić said. He added that the central bank and government officials should be allowed to adopt the new law for the National Bank of Serbia first. Asked when he is expected to be officially elected as the new NBS governor, Šoškić said that the amendments for the NBS law must be drafted first, adding that it was hard to tell when this would be completed. Šoškić also commented on the introducing of measures which enable the citizens to obtain loans from commercial banks under more favorable conditions as “justified”. During an break in the International Accounting Standards (IAC) seminar, Šoškić said that the current market demand in Serbia has dropped compared to the previous period, and that this situation has opened possibilities for implementing instruments such as loans which allow a somewhat greater level of indebtedness and simplify the procedure for obtaining loans. “This measure is justified if there is no imminent danger of inflation in the next period, but if the situation should change - and there are signs already that the deflation will not last long - then every measure should be closely inspected”, Šoškić said. Šoškić reminded that monetary policy has for some time now been subject to relaxing, and that the NBS has decided on several occasions to reduce either the referent interest rate or the mandatory state reserves, and added that such policy is likely to persist, since there is no magic formula which the state could use. The instruments which can be used are quite clear, and so are the expectations from monetary policy - stability of prices and improvement of Serbia's economic growth, Šoškić pointed out.

The Employment Fair opened

2010-04-29T06:53:00.001-07:00

Belgrade, April 22. 2010 (Serbia Today) - Mladjan Dinkic, the Vice-president of the Serbian Government and Minister of Economy, opened the Employment Fair “Career Days” at Sava Center on Tuesday. In his speech he mentioned that the 2010 is one of the most difficult year to get a job. The Serbian Government will try to make a connection between the employers and job seekers, and that the Fairs like this is the great opportunity for that. He also added that the young and ambitious people will have the chance to get good jobs with high salaries. “There are a lot of young people who are looking for a job, but they need to fight and not give up. One has to seek work and be persistant and not to wait for others to offer it. “ –said the Minister. At the Employment Fair the jobs are offered by 40 companies , among which are “Vip Mobile”, “Ernest and Young”, The National Bank of Serbia, “Apatin Brewery”, and the “Coca-Cola”.

Reform of tax system to boost production, employment

2010-04-29T06:48:00.001-07:00

Belgrade, 22 April 2010 (Serbia Today) - Minister of Finance Diana Dragutinovic said yesterday that the announced reform of Serbia’s tax system will boost production, employment and exports through a reduction in income taxes and contributions and an increase in excise. Speaking at the 11th session of the Assembly of the Serbian Chamber of Commerce, dealing with basic elements of the tax reform, Dragutinovic said that the excise on cigarettes and alcohol should be increased. This would be done by establishing the excise on alcoholic drinks by the content of alcohol, and not per liter. There is room for increasing the excise on cigarettes after the state’s obligations to investors in the tobacco industry cease. She stressed that the tax reform must have no impact on revenues, meaning that along with reduction of income taxes and contributions, the state must find additional sources of income so that budgetary deficit does not grow. The Minister explained that the VAT rate in Serbia is perhaps the lowest in Europe because there are two rates, of 18 and eight percent. The share of goods that are taxed with the lower rate is 40%, which means that the real VAT rate is 14%. Dragutinovic stressed that the grey economy contributes to over 30% of GDP, just as in other eastern European countries. By simply transferring the grey economy into legal channels, which is what representatives from the economic sector propose, we would not be able to close the budgetary deficit in the event of income tax being lowered, the Minister said. She said that the grey economy is the largest sector when it comes to employment, but the smallest in the VAT system, where taxes are the hardest to evade. She also said that the tax reform should strive to reduce tax in sectors where evasion is the highest, and increase it in others where it is not that frequent. Dragutinovic explained that such a tax system would stimulate exports because it would reduce labor costs and increase the competitiveness of the Serbian economy, at the same time discouraging imports and in this way improving Serbia’s balance of payments. The Minister stressed that the tax reform could also help to shift from one economic growth model to another, adding however that this is also influenced by the competitiveness of the workforce, the reduction in administrative obstacles and an efficient judiciary. She said that the Ministry of Finance is also working on a reform of public expenses and before the end of the year it will adopt a law on fiscal responsibility to limit the state’s expenses.

FIAT will produce 200,000 cars in Serbia

2010-04-28T06:38:00.001-07:00

Belgrade, April 21. 2010 (Serbia Today) - “Fiat” plans that by year 2015 they will be produce 200,000 cars in Serbia, said the Roman daily "Republic", referring to the company's strategic plan, which will officially be released today. According to the internal document which has come to the Roman daily, "FIAT” predicts drop in production in Poland and the sharp increase in Serbia, where it plans the production of 200,000 low-cost cars." In terms of total production,” Fiat” plans to produce five million cars by 2015 that is. between 2.5 and 2.7 million Fiat vehicles and another 2.8 million “Chrysler” vehicles. From that point, just over one million “Fiat”, “Lancia” and “Alfa Romeo” vehicles will be produced in Italy. Other seven models starting with Fiat 500 will be produced In the United.

Smaller Export Deficit with Holland

2010-04-27T06:53:00.001-07:00

Belgrade, April 20, 2010 (Serbia Today) - The total value of the export by Serbian companies to Holland during last was 156 million US dollars which is 13% less than a year before, according to a Serbian Chamber of Commerce report. At the same time, Serbian import from Holland was 235 mill. US dollars. The most important Serbian import products are transportation equipment (37,74%), iron and steel (11,20%), fruits and vegetables (8,69%), wheat (7,05%), and garments (6,65%). The most dominant import products from Holland were cars and other vehicles (6,5%) as well as industrial ,medical and pharmaceutical equipment and machines. Although the Serbian export deficit last year was 78 million US dollars, it was still smaller than the year before. This is not only because of the growth of Serbian export to Holland, but primarily because of the less import from Holland at the same time period. The biggest Serbian exporters to Holland are "Brodogradilište Begej" from Zrenjanin, whose export account for over 15% of the total Serbian export to Holland. Other exporters are "Team" Sremska Mitrovica, "US Steel" Smederevo, "Rhine-Danube" Kladovo, "Impol Seval" Sevojno, "Mateksom " Subotica, "Agroglob" Novi Sad, "Delta agrar" Beograd, "Prvi maj" Pirot, "Agrotrejding" Novi Sad and "Interprom" Beograd.

Value Added Tax (VAT) Remains 18 Percent

2010-04-24T03:36:00.000-07:00

Belgrade, April 18. 2010 (Serbia Today) - Mladjan Dinkic, Serbian Deputy Prime Minister and Minister of Economy said that the Government is thinking about changing tax policy, but that the rate of value added tax (VAT) of 18 percent will certainly not increase, reports Beta. Dinkic said that he supports the idea of the Ministry of Finance on tax reform and said that it would be best to start with the application on January 1st 2011th. We can think about reducing the income tax to 10 percent, with an increase of minimum taxable wages, while also establishing a uniform VAT rate of 18 percent, but with the abolition of taxation of the most sensitive products, like bread, books, newspapers and some other products - said Dinkic

Mrkonjic : Yugoslav Air Transport Status Will be Resolved Very Soon

2010-04-24T03:34:00.000-07:00

Belgrade, April 18. 2010 (Serbia Today) - Milutin Mrkonjic, Serbian Infrastructure Minister said today that in the first half of this year the status of Yugoslav Airlines (JAT) has to be resolved. "It will be resolved very soon, as with the current fleet of JAT Airlines will not be able to fly more than a year," said Mrkonjić to the reporters in the Serbian Parliament. Mrkonjic said that the Serbian government has not discussed the situation about the JAT Airlines. He said that there are two possible options for JAT Airlines -the first one is to find a strategic partner and the other one is to be sold. According to the media, the Serbian government should make a decision on forming a new air transportation company independent from JAT Airlines. After that, the Ministry of Infrastructure should look for a procurement consultant specialized in finding strategic partners and then follow the tender on the sale of the newly formed company.

The Construction of the Highway Near Dimitrovgrad Started

2010-04-23T06:23:00.001-07:00

Belgrade, April 17. 2010 (Serbia Today) - Slavica Djukic-Dejanovic, the Speaker of Serbian Parliament ceremonially opened the works on the construction of Corridor 10, road section at Dimitrovgrad, on Wednesday . She said that because of the construction of Corridor 10 highway jobs will be provided for 100,000 people. It is a long section of 8.7 kilometers, whose construction cost 31 million Euros. The beginnings of these works means that Serbia is becoming a big construction site and that’s giving a hope for a better future for the country. I take this opportunity to thank the representatives of the World Bank. The construction of Corridor 10 and specially this section near Dimitrovgrad in Serbia means a new start in the life of the region, and that the problem of unemployment in this part of Serbia is resolved in the next two years in the best possible way - said Dejanovic. The Director of the World Bank for this region Armitidž Jane said that the World Bank provides full support for the Serbian government to build two missing part of Corridor 10 between Nis and Dimitrovgrad and the border with Macedonia.- The construction of this corridor is a key element for the integration of Serbia with the transport network in the region. The World Bank's Serbia for the construction of this road approved the largest loan ever. Total cost of Corridor 10 is estimated at 1.3 billion Euros, and from this amount the World Bank will finance the 275.2 million Euros - said Armitidz.

Tender for Telekom most likely during the summer

2010-04-23T06:20:00.000-07:00

Belgrade, April 17. 2010 (Serbia Today) - Jasna Matic the Minister of Telecommunications said that the tender for the privatization of Telekom Serbia is most likely to be announced in the summer. She told to the reporters in Batocina that the strategic investors and major telecommunications operators will be invited to offer an appropriate sum for a percentage, now preliminarily determined as 40 percent. "We will see whether the adviser agree with this optimal percentage of sales," she said. Jasna Matic is expected that there will be a strategic investor, who will raise the level of telecommunications in Serbia at the same level as in European Union. "We should pay special attention to broadband Internet, and allow all citizens of Serbia to have the Internet, telephone and mobile phone," said Jasna Matic.

Spainair will start Belgrade-Barcelona flights from Thursday

2010-04-21T06:39:00.000-07:00

Belgrade, April 15. 2010 (Serbia Today) - Spanish air company will fly Belgrade-Barcelona from April 15 , and according to Belgrade"s airport season flying schedule, Spainair will fly three times a week- on Tuesday, Thursday and Saturday. Promotional fares to travel between Belgrade and Barcelona are from 75 Euros without fees, according to the Spainair site. For example, a round trip with departure from Belgrade on Saturday, June 12 and return from Barcelona on Thursday, June 17 currently cost 149.55 Euros with all the fees included. The Spanish airline has announced that from May 28, they will introduce flights from Belgrade to Madrid, two times a week - Fridays and Sundays. Spanair has a fleet of 36 aircraft and is a member of Star Alliance, led by German Lufthansa.

NBS top spot candidate on monetary policy

2010-04-20T07:07:00.000-07:00

Belgrade, April 14. 2010 ( Source:B92) - The candidate for becoming the new National Bank of Serbia (NBS) governor, Dejan Šoškić, says there is room for a further relaxation of the monetary policies. Šoškić, who currently heads the central bank's council, said this was true in the context of the current inflation trends. “As you know, at the last meeting of the NBS Monetary Committee, the reference interest rate was decreased to 8.5 percent. It is clear that the restrictive monetary policy has recently been less and less present,” Šoškić told Belgrade daily Politika. Asked whether the mandatory cash reserves of banks should be lowered in order for them to place this money in the industry more, Šoškić said that the reserve should be an instrument for the control of credit expansion. As for the planned sale of a 40-percent stake in Telekom Srbija, he noted no public company should be sold in order to support the dinar exchange rate.. “Its sale must be motivated by maximum usefulness for the budget, rather, the tax payers, and to improve the quality of services for consumers. Every sale in support of the exchange rate can only be short-term and without chances of long-term sustainability. The exchange rate can be stabilized for the long-term with increased exports and increased competition in the domestic market,” Šoškić said. Asked whether the state is spending too much, Šoškić said that the deficit is a clear sign that the state is spending a lot more than it can earn. “That is why it is important to make rearrangements within the existing budget deficit to the advantage of investments in the country’s infrastructure. We must take into consideration that room must be made and that the public debt must be decreased, which means that loans must be paid back. From here, the state must continuously work on creating much better conditions for economic growth and control its own spending,” Šoškić concluded.

Proposal to cut income tax under consideration

2010-04-19T08:04:00.000-07:00

Belgrade, April 13. 2010 (Serbia Today) - Finance Minister Diana Dragutinovic stated today that the tax policy reform includes a proposal to cut income tax and obligatory insurance contributions, which would encourage production and increase employment. Speaking to the press at a presentation of the “Tax Policy – A Look Forward” study, she said that tax reforms should be speedy and not gradual, and implemented in one step in order to provide cheaper labour, encouraging employers to offer more jobs. The sooner we begin, the bigger are our chances to encourage production and employment. Income tax cuts will be a huge relief for potential employers, she said. Tax per RSD 100 net salary is nearly RSD 60. If the employers were to pay a maximum of RSD 149 instead of RSD 160, it would make a huge difference, said Dragutinovic. Since the amount of taxation depends on the category of the employee, employers will be totally relieved of paying contributions for employees whose salaries are below RSD 16,500, which is the poverty line, she said. She added that such a reform would be backed by employers, adding that its essence is the idea that the tax system should be reformed so as to endorse key elements, ie production, competition, economic growth and grey economy reduction.
The “Tax Policy – A Look Forward” study looks at the tax system change, aimed at increasing consumer tax and decreasing income tax in order to discourage consumption and reduce labour costs, Dragutinovic said, adding that the grey economy would thus be reduced and prices of products lowered. USAID Director Michael Harvey said that good economic policy is crucial for macro economic balance, economic growth and new jobs. Harvey said that compared to its neighbours, Serbia did well during the crisis, but its effects can still be felt. When the market loses confidence in the government, it brings about a series of negative effects on the development of the entire state, he said adding that the study on future tax policy includes stimulating models to help the Serbian economy become competitive on the basis of increased production and decreased consumption.

Deutsche Telekom to offer EUR 800mn?

2010-04-16T07:00:00.001-07:00

Belgrade, April 10. 2010 (Source:B92) - Germany's Deutsche Telekom is at this point willing to offer less than EUR 800mn for a 40-percent stake in Serbia's Telekom Srbija, reports said. The Serbian government recently decided to sell the state-owned telecommunications company in a tender, likely later this year. Now the International Communications Partners are quoted as reporting in an analysis that "it remains to be seen if the Serbian government will manage to get more money in direct negotiations". The state owns 80 percent of Telekom via Serbia's postal service, PTT. The rest is owned by Greek OTE, where Deutsche According to the same report, Belgrade believes that its 80 percent of Telekom is worth EUR 2-2.5bn, which means that they expect a price of EUR 1.1bn to 1.2bn for the 40 percent that will go on sale. Telekom holds a 30-percent stake.

Serbia, Russia sign $200m loan agreement

2010-04-14T09:14:00.001-07:00

Belgrade/Moscow, 7 April 2010 (Serbia Today) – Minister of Finance Diana Dragutinovic and Russian Deputy Minister of Finance Dmitry Vladimirovich Pankin signed a loan agreement today worth $200 million that the Russian Federation approved for Serbia. Dragutinovic said that the funds approved for Serbia will be used as support to its budget and for financing its deficit.

The agreement could have been signed in 2009 but this was postponed so as to avoid changes in Russian regulations, she explained. Dragutinovic said that the negotiations on signing a loan agreement to finance infrastructure projects in Serbia will be intensified in May. Both loans were initiated by Serbian President Boris Tadic in a letter that he sent to President of the Russian Federation Dmitry Medvedev in March last year. The grace period will last until March 2012 and the deadline for repayment is the end of 2021. The annual interest rate will be determined on the basis of LIBOR for six month deposits denominated in dollars, plus 2.95%.Under the agreement, Serbia has the right of early repayment of the loan, without paying any penalty interest .

The Council of the National Bank on Governor's resignation

2010-04-13T10:32:00.001-07:00

Belgrade, April, 06. 2010 ( Source : B92) - The Council of the National Bank of Serbia (NBS) is set to accept Governor Radovan Jelašić’s resignation as it meets today, reports said. Jelašić announced his resignation last month, and said the decision came due to personal reasons. President of NBS Council Dejan Šoškić told B92 that the current law did not envisage a deadline for electing a new head of the central bank, and said he therefore expected that the procedure "could take a while". The current law says that the Parliamentary Finance Committee formally nominates a candidate for governor, but the PM has recently announced a new law on the NBS, with one of the envisaged changes related to the institution that makes nominations. According to reports, it is "being considered" that the president of the republic should choose candidates. Šoškić explained that the selection of a new governor is not expected soon precisely because of the expected changes to the law. "Adoption of a new law requires a long-term procedure, primarily drafting the bill itself and after that the bill should become an official proposal, then it must go to the parliament agenda, so it’s a process which will take some time. I would be surprised if it took less than two, or three months,” he said. Unofficially, the ruling Democratic Party (DS) will nominate a candidate instead of G17 Plus, which has so far produced central bank chiefs from its ranks. Precisely Šoškić, who is also one of the members of the prime minister's economic team and professor at the Faculty of Economy, is being mentioned one of the most serious candidates. Šoškić confirmed for B92 for the first time that he held informal talks on the subject. “There were some informal contacts, however, I would let the democratic process take its course at this point. It is certain that many more of these preliminary consultations should be carried out in order to come up with a concrete proposal for this important position,” he explained. “This is a complicated process of mutual agreement and it would be hard to assume that it can be finished in a short time,” Šoškić concluded.

Doubt over JAT debt plan

2010-04-12T08:12:00.001-07:00

Belgrade, April, 05. 2010 ( Source: B92) - Economic analyst Miša Brkić does not share Prime Minister Mirko Cvetković’s optimism as far as getting Jat Airways out of debt is concerned.

“t is good that the state decided to let go of Jat, because it showed that it is not capable of running such a company,” Brkić said. “I think that Jat will not be able to cover all its losses with its property. When a company goes into bankruptcy, then the creditors are given money from the amount that already exists, there is not money for everything else, and then the creditor get shorted. Unless the state decides to pay what is owed to the creditors, in which instance it would be paying from the budget,” Brkić said. He said that the state can, but does not have to leave part of Jat’s ownership for itself, adding that the citizens care about having cheap flights and safe planes more than they care about who owns the company. The decision to sell the company is seen as a good one by economic analyst Ruža Ćirković as well.
.”
A million Euros needs to be invested in that company just to get it working. I do not believe that Jat is in good shape. But it is easier to sell it without debts. We made the debts, rather, the government with the scandalous way it led the company,” she said. Two years ago, the government tried to sell 51 percent of Jat’s ownership for EUR 51mn. The tender fell through because no one wanted to participate in it, even though Russian Aeroflot was said to have shown interest. There has also been talk that Jat is negotiating a strategic partnership with Turkish Airways, and there was also speculation that the Marbo factory, which makes chips and snacks, could buy the national air travel company

The resignation of the NBS Governor will be accepted on April 6th

2010-04-10T03:14:00.001-07:00

Belgrade, April 01. 2010 ( Source: Tanjug) - The outgoing Governor of the National Bank of Serbia Radovan Jelasic announced yesterday that the Council of the NBS will accept his resignation on April 6th and added that he does not know who are the candidates for the post, news agency Tanjug reports.
During the break at the international conference on corporate social responsibility in the NBS, he told reporters that the Council's will pass their decision to accept the resignation to the Finance Committee of the Parliament of Serbia, which should confirmed it
Jelasic told reporters that he made his decision to resign after long consideration and that the same is not made in haste. He also said that he feels relived now when decision is public and the resignation in process.

Serbia's trade deficit USD 1.1bn

2010-04-10T03:12:00.001-07:00

Belgrade, April 02. 2010 ( Source: B92 ) - Serbia's trade deficit was USD 1.1bn in the first two months of 2010, which is 14.1 percent less than the same period last year. This is according to the Statistical Office, which made the announcement on Wednesday. Exports during this period were worth USD 1.2bn, which was a 20.9 percent increase compared to the previous year, while imports were 1.3 percent higher at USD 2.3bn. The import was covered 52.6 percent by the export, which is an increase compared to the same period in 2009, when it was at 44 percent. More than half of the trade was conducted with EU countries, while the biggest surplus was recorded in trading with Montenegro, Bosnia-Herzegovina and Macedonia. The highest deficit was recorded with the Russian Federation, due to the import of oil and natural gas.

The resignation of the NBS Governor will be accepted on April 6th

2010-04-09T08:02:00.001-07:00

Serbia's trade deficit USD 1.1bn

2010-04-09T07:58:00.000-07:00

The most interesting candidates for the new governor

2010-04-07T08:17:00.000-07:00

Belgrade, March, 31. 2010 (Serbia Today) - Interviews with the candidates for the new Governor of the National Bank are largely under way, as daily "Blic" unofficially learned. It is likely that the Democratic Party coalition partners will propose Dejan Soskic, a professor of the Faculty of Economics of the Belgrade University and the President of the Council of the National Bank of Serbia as their favorite candidate.

Since the NBS Governor Radovan Jelasic suddenly resigned, Serbian Prime Minister Mirko Cvetkovic has conducted several interviews with candidates for the new governor. According to unofficial reports, prof. Dejan Šoškić and Dusan Vujovic, World Bank chief economist, are the two candidates for the position of the first man of the NBS. The public also speculated about Vladimir Čupić, Chairman of the Executive Board "Hypo Alpe-Adria Bank, Goran Pitic, Chairman of the Board," Societe Generale Bank, and Kori Udovicki, former Governor. A proposed candidate for the new Governor must be acceptable to all coalition partners. The most qualified candidate will be suggested by the Democratic Party, but this proposal must be accepted by other parties in the coalition. There are a lot of good professionals, but not all of them are qualified for this public function where specific experience is required and strong managerial skills together with political integrity and independence.

The procedure for the election of a new Governor assumes that at the first meeting of the Council of Governors it will be accepted the resignation of Radovan Jelasic, and the Council will then instruct the Finance Committee of the National Assembly. The plan is that this will be done latest by April 6th , although the procedure has a legal deadline of 60 days. Even after accepting the resignation, the NBS former Governor will continue to perform all tasks until the Parliament Assembly does not appoint a new Governor, at the suggestion of the Committee on Finance. In any case, it is expected that by the end of the week the public and the Finance Committee, will know who is the proposed candidate. Meanwhile, Radovan Jelasic, the outgoing Governor, still performs his duties. He did not accept any new position and rejects claims that he received an job offer from the World Bank, which some media have reported.

Leading economists say now that the new Governor is about to be elected, it is the right moment to change the Law on the National Bank of Serbia. According to the current law from 2003, the mechanism of management and decision-making involves three restrictions - the Governor, the Monetary Board and the Council of the NBS. Dr. Milojko Arsic, Professor of the Faculty of Economics, says that the most effective solution would be the existence of a Council of the NBS. - President of the Council would be the governor and the Council would have six to eight members. In this way, decisions would be more balanced, and would be much more collective responsibility. In any case, would be strengthened by the independence of central banks - indicating Arsic.

IMF expects no changes in NBS work

2010-04-06T03:56:00.001-07:00

Belgrade, March, 30. 2010 (Source: B92) - The International Monetary Fund does not expect any changes in the NBS’s strategy after the resignation of Governor Radovan Jelasic. The IMF representative in Serbia Bogdan Lissovolik said that the arrangement which IMF has with Serbia is in power and that the agreed framework for economic policies is being implemented.
He said that the government's decision of to sell 40 percent of the shares of Telekom Srbija is a good chance for revitalizing the important process of privatization in the country, but added that he did not wish comment on the Telekom case "in this phase". Asked how he sees the government role in controlling the functioning of public companies, Lissovolik said that he could be concluded that the state control in this field is still at a very high level. “It is a fact that a large number of state companies are continuing to produce losses. That is, among other things, a key reason why the participation of the private sector in the total Serbian economy is less than in similar transitional economies such as the ones in Poland and Slovakia.” He said that in these countries, the private sector makes up 75-80 percent of the total economy, while in Serbia, it only carries 60 percent. “Greater participation of the private sector could be a key factor in the Serbian transition towards building a new, sustainable model of growth based on exports,” Lissovolik said.

Government priorities to increase employment, living standards

2010-04-01T02:31:00.000-07:00

Belgrade, March 26. 2010 (Serbia Today) - Serbian Prime Minister Mirko Cvetkovic said today that the main priority of the government this year will be to increase employment and living standards.
At the 8th business roundtable meeting with the Serbian government under the title "New policies for economic growth", the Prime Minister announced a series of stimulating measures for stopping the growth of unemployment and to increase economic activity. He stressed that the government will be active in seeking strategic investors from Europe and around the world. Cvetkovic announced the securing of funds for stimulating export-oriented enterprises and strengthening institutional capacity for conquering new markets. The Prime Minister said that the government will work on the identification of sectors that have export potential.Emphasis will be placed on small and medium enterprises (SMEs),he underlined.Also, Cvetkovic announced fiscal incentives that will encourage growth in domestic demand and investment in infrastructure. He added that the government will encourage efficiency of public enterprises and their investments, which will be given government guarantees. Speaking about investment in the energy sector, the Prime Minister said that out of €1.6 billion foreseen for this purpose, power industry Elektroprivreda Srbije (EPS) and forest management company Srbijasume will receive €700 million, which amounts to 5% of GDP. The Prime Minister announced special incentives for the building sector, adding that the fiscal stimulus will be €20 million, which should instigate housing construction worth €300 million.
Cvetkovic said that we should expect reforms in the judiciary, pension and disability insurance sector, as well as in education. Along with the economic policy, a plan of social security for citizens will be implemented, he announced, noting that systemic laws on social protection and better identification of vulnerable groups will be adopted. All measures will be balanced and will not affect macroeconomic stability, said Cvetkovic. When it comes to the sale of Telekom Srbija, he stressed that the government considered which percentage of this company should be sold to attract more than one interested party and therefore has decided to sell 40% of the shares. He said that the buyer of 40% of Telekom’s shares will become the majority owner, because the shares will be distributed to citizens and will be available for trading, so the future owner of 40% of the shares would be able to become the majority owner. Cvetkovic said that the sale of Telekom will be similar to Mobtel’s sale. The Prime Minister stressed that the money from the sale of Telekom will go to a special fund for investments. Namely, the funds will be used to build roads such as road Belgrade–Cacak, Cacak–Pojate–Krusevac, Paracin–Vrska Cuka, Nis–Prokuplje and others, the Prime Minister said. Cvetkovic said that the Serbian government is committed to regional cooperation and better relations in the region, and pointed out that there are some problems in the Balkans, but that they can be dealt with through talks. He stressed that the official position of Belgrade is to preserve the territorial integrity of Serbia and added that the decision of the International Court of Justice (ICJ) will create the basis for new talks, which should lead to a mutually acceptable solution to the issue of Kosovo-Metohija.

National Bank of Serbia Governor Resigns

2010-03-31T01:48:00.001-07:00

Belgrade, March 25, 2010 (Source : Beta) - National Bank of Serbia Governor Radovan Jelasic submitted his resignation to the bank's Council yesterday, the central bank said in a news release. According to the news release, in a note to Council Chairman Dejan Soskic, Governor Jelasic said the resignation was irrevocable and he was submitting it for personal reasons. "I request that, in line with the Law on the National Bank of Serbia, you launch a process before the Serbian parliament's Finance Committee, which will determine that conditions have been created for the cessation of the duty of governor before the end of his mandate," Jelasic said in his resignation. Jelasic previously told a news conference that he will occupy the post of governor until the parliament appoints a new one, adding that he will not change his decision. The governor also said he has already informed Prime Minister Mirko Cvetkovic and President Boris Tadic of his decision, and the two officials marked his work so far positively. Jelasic added he does not have a new job offer and has yet to decide where he will work in the future and whether he will stay in Serbia. The parliament appointed Jelasic as governor for the first time on Feb. 25, 2004. After the adoption of the new Constitution and Constitutional Law on Sept. 26, 2007, Jelasic was given a new five-year mandate. Prime Minister Cvetkovic said that he was sorry to see Jelasic resign. Cvetkovic told BETA that Jelasic had told him he would resign, but had not gone into detail regarding the personal reasons for this. He added that relations between the central bank and the government have been good, despite occasional disagreements, which were resolved "in a constructive manner."

Unions against Telekom privatization

2010-03-30T03:20:00.000-07:00

Belgrade, March, 24. 2010 (Source : Tanjug) -Telekom Srbija unions have appealed to the state not to privatize the state-owned telecommunications company. According to them it is one of the last remaining successful companies in the country. Representatives of the unions from Republika Srpska, Montenegro and Serbia have signed a cooperation agreement and formed a coordinating body in order to improve the conditions of the company and its employees. Although Serbian Prime Minister Mirko Cvetković said on Sunday that Telekom privatization may be carried through by selling a part of the shares while having the state keep the other part, the unions warn that the company may pass into private majority ownership even if the state sells only five percent of the company's shares.

Telekom union President Miroslav Joksimović explained that the Greek telecommunications company OTE holds 20 percent of the capital shares in the Serbian Telekom, while the citizens, current and former employees hold about 25 percent. This means that 45 percent of the shares are currently not in state ownership, and if additional 5 percent are sold the state will no longer be the major shareholder, Joksimović said. Telekom Srbija union President Slavoljub Kandić warned that the transfer of the company to majority private ownership would mean a rise in the price of services, similar to the rise in phone subscription costs after the Norwegian Telenor became the second fixed telephony operator. Kandić added that the transfer would also lead to lay-offs.

Serbia "heavily indebted" country

2010-03-27T04:20:00.000-07:00

Belgrade, March, 23. 2010 (Source: B92) - Serbia owes euro 22.8bn to foreign creditors, according to indicators of the world bank and international monetary fund. The national bank of Serbia and authorities are trying to play down the severity of the situation, claiming that Serbia is among the countries that have middle degree of indebtedness, where the debt's participation in the GDP is 74.1 percent. That is six percent under the mark that separates Serbia from countries in high debt, economist Mlađen Kovačević told daily Večernje novosti. He said that in the last two years, the state of foreign debt has drastically worsened, and that the taking out of loans will continue in this and the next year, which can lead to a long-term debt crisis. Kovačević also believes that the total debt needs to worry Serbia the most, even though the central bank insists that private debt, which is the debt companies have abroad, should not be taken into consideration. "i think that there is reason for concern. What will happen if Telekom Serbia, (the state-owned telecommunications company) has problems and is not able to pay off its loan? The scenario is simple. Citibank or any other creditor the company is indebted to can take over our national company at a minimal price,” Kovačević said. He explained that the ability to pay off loans will depend mostly on the strength of the industry, which is the only source that can secure foreign currency. “As far as the state is concerned, it can always find a way to regulate its obligations. It can reprogram debts, take out new loans, which it has been doing for years. But that also has a price,” Kovačević said, adding that Serbia owes euro 6bn based on interest alone for a period of four to five years. He believes that the state will be going even further into debt. “There are already indications that the Chinese will give euro 1bn of loans, and the Russians will give euro 800mn. The sale of Telekom is also being announced by the end of the year, at a time when the crisis is still shaking Europe, Which means that a lot less money can be gotten for the company than during better times,” he said.
"The state is continuing to spend its 'family treasures', to sell out everything it owns. The privatization of EPS (electric company) is also being mentioned, with the Czech as the main interested party, in other words, a state institution. How could it possibly be that a foreign state company can handle things better than ourselves in our own house," this expert wondered. "Since January 1, 2001 until today, the state took euro 70bn based on privatizations, foreign loans… where that money went, i cannot see. In nine years, we have not built a single new bridge, corridor 10 has not been finalized, nor any other investment of any significance," Kovačević added. He also noted that Serbia's situation is "not far from the Greek scenario", because Serbia is spending "25 percent more than it earns".

Government unanimous regarding economic policy

2010-03-27T03:55:00.001-07:00

Belgrade, March, 22. 2010(Serbia Today) – Serbian Prime Minister Mirko Cvetkovic said that from a strategic point of view, Serbia needs an export-oriented economy because that is the model for all developed countries of similar size. In an interview for today’s edition of the Politika daily, Cvetkovic stressed that if Serbia wants to continue its development, it has to found it on non-tradable goods. He added that this is an ideal situation for investors who do not place their faith in ratings to come to Serbia and do well in business. It is my impression that we have made a huge step forward, but I also believe that our people lack optimism, because we had had a long period of negative scenarios. It is only recently that good things started happening to us, but it will take some time for the people to gain self-confidence, the Prime Minister said. He noted that it would be a good move to sell Telekom this year, adding that by abolishing the monopoly on landline phone the need to privatize Telekom arose. Telekom will be sold at a tender. However, I am more inclined towards the option which implies the sale of one part of Telekom now, while the other would remain state-owned, Cvetkovic noted. The Prime Minister announced that on 31 December the monopoly over the oil and oil derivatives market will also be abolished, regardless of the protests by Russian partners in the Serbian oil industry NIS. He announced that the government is stable and of one mind when it comes to the implementation of the country’s economic policy, adding that 2010 will be much better than last year, though the change for the better may not yet be felt in the actual life. The government has to rely on the social aspect, create additional demand and help people, Cvetkovic noted stressing that the government will contemplate any ideas put forward by employers and unions. Whenever employers and unions reach an agreement the government will accept it. It will also with great pleasure take into consideration all ideas proposed jointly by unions and employers, he noted. The Prime Minister stressed that the Greek scenario will not happen to Serbia since the situation with its public debt and the control over it is perfectly clear. Our public debt refers only to loans for infrastructure projects. We did increase our public debt in 2009 and it rose to 32%, but we must not forget that a part of it was redirected to budget reserves which currently amount to around half a billion Euros, he explained. As for cooperation in the region, Cvetkovic said that Serbia wants to maintain cooperation with all countries and make friends, not enemies.

Dinkic announces forming SME business council

2010-03-24T04:11:00.000-07:00

Belgrade, March, 20. 2010 (Serbia Today) – Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic announced that the Ministry will establish a business council for small and medium enterprises (SMEs) next week in order to establish direct communications with this sector, which employs one million citizens in Serbia. Dinkic visited the small company Stublin in Stojnik near Arandjelovac, owned by Radovan Milojevic, who was declared the best entrepreneur in 2009. He said that the council will include the 80 most successful SMEs from all over Serbia.

The Serbian government wants and needs to help these entrepreneurs to expand their capacity and to expand the market and to employ more people, said the Minister of Economy and Regional Development. He pointed out that this sector employs most of the workforce and contributes to approximately 75% of GDP. Dinkic recalled that the state has provided soft loans for liquidity, which are intended for SMEs. He explained that the idea of establishing the SME business council is to tackle specific problems that these companies are faced with and also to increase their competitiveness. The Minister of Economy and Regional Development said that the council will include companies from different sectors, including the metalworking industry, bakeries, vulcanizes, the textile industry etc. Radovan Milojevic, who founded his company in 1993, was declared the best entrepreneur in Serbia for 2009 in an awards event held by Blic daily and Banca Intesa.

For better Economic relations between Serbia and Poland

2010-03-24T04:08:00.000-07:00

By Milen Vesovic
Belgrade, March 19, 2010 (Serbia Today) – The Serbian Government announced that after a visit of a Polish Deputy Prime Minister and Minister of Economy Valdemar Pavlak to Serbia, he stated that: "Serbia and Poland have, as soon as possible, to reinforce an economic cooperation between the two countries".
The Polish official spoke to the Serbian Prime Minister Mirko Cvetkovic, Serbian Deputy Prime Minister and Minister of Economy Mladjan Dinkic and second Vice President (in charge of European integration) Božidar Đelić. It was concluded that it is necessary to promote the economic cooperation between Serbia and Poland in terms of increasing the volume of foreign trade, and in the field of investment, particularly in mining, energy and agriculture.

Minister "speaks in name of budget"

2010-03-23T03:23:00.000-07:00

Belgrade, March, 18. 2010 (Source: B92) - Finance Minister Diana Dragutinović said that the state should try to have no budget rebalances this year and to keep wages and pensions at the same level.
She told daily Večernje Novosti that budget income is at the planned level and an increase in wages and pensions can be expected only if income increases significantly, stressing that she is speaking on the issue only in relation to the budget passed by the government. "I am not saying that there will not be an unfreezing (of wages and pensions), I am reading what is written in the budget. Nothing can be said for certain. I would like for us to have one budget in 2010. Not two. But for an increase in wages and pensions there would have to be a rebalance," she said. Dragutinović said that the problems of unemployment and the decrease in demand could be solved in part by tax reforms. She said that she personally supports an increase in taxes on spending and a decrease of taxes on wages, adding that this is "her personal vision of tax reforms, which does not mean that the government must accept it.

Unions waiting for answer from government

2010-03-22T07:22:00.001-07:00

Belgrade, March, 17. 2010 (Source : B92) - Unions and employers are asking for a meeting with government officials to reach an agreement on key economic measures for 2010. The government has yet to address their request. The goal of the meeting would be to discuss measures for lessening the effects of the crisis which the citizens will continue to experience this year. “The Independent Union is expecting an answer from the prime minister today on the demand submitted for a joint meeting with business and union officials. The main topic will be the economic ambient in Serbia and efforts to get out of the crisis. The consequences of the current ambient in Serbia are small wages, a lot of unemployment, small pensions,” Independent Union President Ljubisav Orbović told B92. Orbović said that the government is not leading a clear economic policy, which is why a social crisis is possible. “I believe that in this moment, we have no knowledge of what direction Serbia is heading in. The position we are in shows that the crisis will be greater and greater, and a third kind of crisis is approaching, a social crisis, where more people would be made redundant, which is not sustainable and cannot be accepted. We are offering a joint meeting and joint solution and to reach a joint agreement,” Orbović said.

Average monthly budget per household RSD 47,582 in fourth quarter of 2009

2010-03-22T05:33:00.000-07:00

Belgrade, March, 16. 2010 (Serbia Today) – The Serbian Statistics Office stated that in the fourth quarter of 2009 the average monthly budget per household in Serbia stood at RSD 47,582.

The statement adds that 94.9% of the total available funds is monetary income and 5.1% is income in kind. The largest share in monetary income is recorded with citizens with regular jobs, ie 45.8%, and 33.8% with pensioners. Personal expenses in households in Serbia amounted to RSD 44,886, of which the largest part was spent on food and non-alcoholic beverages (40.7%).

Infrastructure development necessary for fast growth

2010-03-19T00:46:00.000-07:00

Kopaonik, March 13. 2010 (Serbia Today) – Minister for the National Investment Plan (NIP) Verica Kalanovic said that all post global economic crisis development models for Serbia make infrastructure development a priority and a necessity for quicker growth.

In a statement to Tanjug news agency from the Kopaonik Business Forum 2010 Kalanovic said that from this year on only infrastructure projects will be financed with NIP funds and no financing will be provided for maintenance costs, equipment, consulting, subsidies and soft loans. Compared to 2009, the number of NIP projects has been reduced and procedures almost identical to World Bank procedures are being followed, said Kalanovic. She said that this year around RSD 26 billion will be at the NIP’s disposal, of which sum RSD 15.5 billion is from the budget and RSD 10 billion from the European Investment Bank’s project loan. Kalanovic stressed that a new model for project realization and management is needed, namely one that implies partial management modernization at the central level, through the work of ministries and the transformation of certain institutions. The Minister said that the realization of projects in Serbia is still slow, even though progress was achieved both in 2009 and 2010. She also emphasized that the government goal is to create preconditions to enable project realization over a few months, starting from the day when the funds are approved.

Serbia needs 2 pct. GDP growth

2010-03-17T07:22:00.001-07:00

Kopaonik, March 11, 2010 (Source: Tanjug) - PM Mirko Cvetkovic told the Kopaonik business forum that country cannot get out of the economic crisis without a GDP growth of over 2 percent. He added that the key challenges in 2010 will be to stop the increase in unemployment, revive domestic demand and achieve macroeconomic stability.
“ If we do not achieve a growth higher than 2 percent, this year will be similar to the year of the crisis and we will have no sense of improvement”, said Cvetkovic, Nothing that the country needs a continuous growth of 5 to 6 percent annually for it to move forward. The prime minister said that there is no reliable data that would suggest with certainty that Serbia has come out of the crisis, but that there are a number of indicators for that, like the 31 percent increase in export in the first two months of 2010, which inspires optimism.
According to Cvetkovic, stimulating export oriented sectors of the economy, attracting strategic investors and improving Serbia”s rating are also key to the country's economic recovery. The government goals in 2010 will be to strengthen economic activity, maintain stability of the Serbian dinar, reduce public spending, prevent an increase in poverty, continue the public sector reform, work on harmonization with European standards and fight crime and corruption. Cvetkovic pointed out that the 3,7 percent growth in industrial production in January,the said high increase in export and the 1,5 percent growth of the composite index also in January all point to positive trends since the start of 2010 and signal a signal a growth of GDP.
The negative indicators, according to Cvetkovic, are the fact that budget revenue was lower than had been planned for the first two months of this year and the continued drop in domestic demand over the same period. Cvetkovic stressed that the government has no trouble formulating the economic policy, but that it has problems coping with conflicting interests that appear as part of that model, and he asked for assistance from companies and economic experts in dealing with those. As an example, Cvetkovic stated the government’s intention to raise demand while reducing public spending, which is the prime source of demand. As another example of such conflicts, he described the necessity to improve the living standard and increase salaries while maintaining a restrictive budget. Cvetkovic announced over RSD 160BN of investments by the government and public enterprises in 2010, a RSD 4 BN fiscal stimulus to support the construction and purchase of new apartments, measures to stimulate export and support in conquering new markets.

Employees of SIK Kopaonik get their first salaries after production recovery

2010-03-16T02:54:00.000-07:00

Kursumlija, March 10, 2010 (Serbia Today) – Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic said in Kursumlija today that €8 million will be invested in the Forestry and Industrial Complex (SIK) Kopaonik by autumn. At the initiative of the Ministry of Economy and Regional Development, the production in this company was restarted in February and thus 300 workers of the company got their first salaries after more than 20 months. By the end of March, this company will also receive a loan from the Development Fund, on the basis of a recently adopted programme of the Serbian government for production revival and employment in economically devastated areas of Serbia, the Minister said after visiting SIK Kopaonik. He recalled that Kursumlija belongs to a group of 40 municipalities in Serbia whose level of development is approximately 50% of the republic’s average. The Ministry of Economy and Regional Development has earmarked €100 million for the promotion of balanced regional development through the revival of production and employment in the poorest municipalities in Serbia, he said. He said during his visit to Kursumlija that a great opportunity for the development of this part of Serbia lies in spa tourism, which is confirmed by resorts such as Prolom and Lukovska Banja which have great potential. However, Kursumlijska Banja has not been in operation for 15 years and a tender will be called to invite investors to cooperate with the state to revive it, said Dinkic.

The offer will include a debt write-off and the state will be a partner in the new company, while the renovation of the hotel will be the investor’s obligation, he explained. An agreement should also be reached with pension and disability insurance funds and trade unions which would use the services offered by the resort, he said. Since there are plans for beginning the construction of a motorway from Nis to Prokuplje next year and Djavolja Varos is a big tourist attraction, I think we must revive resorts and spas. The state will work on the infrastructure and provide personnel qualified for running resorts, he said.

Serbia, Algeria to improve economic cooperation

2010-03-11T08:39:00.001-08:00

Belgrade March 04, 2010 (Serbia Today) – Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic and Algerian Minister for Water Resources and Co-Chairperson of the joint committee for economic cooperation with Serbia Abdulmalek Sellal stated on Tuesday that Serbia and Algeria must improve economic cooperation.
Dinkic, who is heading a Serbian delegation on a three day visit to Algeria, said during talks that cooperation should be restored to the level at which it was during the 1980s, when as a member of the Non-Aligned Movement, Algeria was one of former Yugoslavia’s top economic partners. Speaking at a meeting, which was also attended by representatives of Algerian and Serbian businesses in the area of water resources, Dinkic stressed that the Serbian delegation’s visit is a great opportunity for Serbian companies to work in Algeria, which is one of the richest North African countries and is planning to start a $150 billion, four year, investment cycle. The Serbian delegation also includes Defense Minister Dragan Sutanovac and Minister of Youth and Sports Snezana Samardzic-Markovic, who met today with their Algerian counterparts. During this visit, Dinkic will meet with Algerian Prime Minister Ahmed Ouyahia, and he will also have separate meetings with five ministers and the governor. The Serbian business delegation is represented by some 60 representatives of leading Serbian companies. A business forum will be held tomorrow at which businessmen of the two countries will discuss future cooperation. The football national team of Serbia also arrived to Algeria together with the Serbian state delegation and they will play a friendly match with the Algerian national team tomorrow.

Serbia successfully implements interim trade agreement with EU

2010-03-11T08:36:00.000-08:00

Belgrade, March 04, 2010 (Source: serbiangov.rs) – Deputy Prime Minister for EU integration Bozidar Djelic stated at the first session of the Committee for Implementing the Interim Agreement on Trade and Trade Related Issues with the EU that Serbia has been successfully implementing the agreement for 14 months.

Djelic, who chaired the first session together with Director for Western Balkans in the European Commission's Directorate General for Enlargement Pierre Mirel, said that this is a huge success for the Serbian government and Serbian citizens. He said that today Serbia has formally established the contractual-partner relation with the EU, adding that European and Serbian interests have been contemplated and compared for the first time at the session. The interests of Serbian producers will be protected from now on in the EU market in the same way in which European producers are protected in Serbia, Djelic said adding that the meeting also looked at trade with the EU and fulfilling tariff quotas for Serbian exports. The Deputy Prime Minister recalled that Serbia exports 80% of its goods to the EU, while over 75% of imported goods in Serbia come from the EU. Even so, there was a fall of 25% in the trade volume with the EU in 2009, Djelic said adding that the crisis did not affect the agricultural sector, in which Serbia made a surplus. He also stressed that Serbia is the only country in central and south-eastern Europe to have attained a surplus in agricultural exchange with the EU in 2009, which doubled in comparison with 2008. The quota allocated for the export of baby beef from Serbia to the EU has not been fulfilled, since only 12% of the total approved amount was exported, while 8% of the quota was used for the export of wine and the export of fish was also below the quota.
Djelic said that only export quotas of over 180,000 tonnes have been met for sugar. He said that it is not understandable that Serbia has the same quota for sugar exports as Croatia, since Croatia produces less sugar. The Serbian Deputy Prime Minister said that the citizens of Serbia seeking political asylum in EU countries will be returned to Serbia in accordance with the agreement on readmission, while the organizers of such transport will be punished. Djelic said that Serbia will not tolerate those who through their actions want to jeopardise the crucial freedom of all citizens of Serbia. He said that an attempt to abuse of the liberal laws of Belgium with regard to political asylum in no way implies the action of the state. The Deputy Prime Minister reiterated that Serbia was aware of the fact that the liberalisation of visa regime is not only a privilege but also an obligation. Mirel said that people who abuse the possibility to travel without visas hamper the reputation of Serbia, and reiterated that travel without visas does not imply a work permit. He said that there is a large number of people misusing this circumstance, which indicates that there is an organised group behind. Political asylum is sought by people who come from non-democratic countries and Serbia is a democratic country, concluded Mirel.

Prime Minister Mirko Cvetkovic calls for support for dinar

2010-03-09T02:49:00.001-08:00

Belgrade, March 02, 2010, (Serbia Today) – Prime Minister of Serbia Mirko Cvetkovic said that the state must support the domestic currency. He said that the decision for the state subsidizing credit in Euros should be reassessed and that the state should “turn towards packages from business banks that are meant for crediting in dinars.” Cvetković told Belgrade daily Večernje Novosti that the citizens will have more trust in the domestic currency when inflation is not six, but two percent. “The decrease in the value of the dinar is felt most with citizens who are indebted in Euros and getting paid in dinars, and their buying power decreases,” he said. Cvetković said that there could be increases in wages in the public sector in some percentage or one-time payments in the second half of the year “if significant economic growth is achieved.” He said that “in the next several years, the cost of pensions will be about 10 percent of the BDP, as it was agreed with the IMF.” The prime minister said that the government has chosen to harmonize pensions with the growth of wages in the public sector over the next 18 months, stating that this period is enough time to take care of the consequences of “the two-year status of frozen pensions.” He said that while he worked in the Privatization Agency, he never heard the names that are being mentioned now in cases of alleged abuses in privatization processes, and that his stance is clear on that because he has initiated several processes against such people who abuse privatization procedures since he became the prime minister. Cvetković said that he does not believe that the privatization of Jat Airways will be completed this year, but that the government will be speaking with air travel companies and investors who have a clear investment plan for the company and will decide on what companies could be good strategic partners.

Police intervene against protesters in Belgrade

2010-03-09T02:46:00.001-08:00

Belgrade, March 02, 2010 (Serbia Today, B 92) - About thirty workers of a former Serbian Railways company who have been blocking the main railway station in Belgrade have been "moved from the tracks” according to Serbian media B 92. According to reports, MUP officers intervened to remove the protesting women from the railroad tracks, and are now preventing them from going back. The intervention was unmarked by any incidents, reports said. The protesters, all from the Nega Kola company, earlier stranded both incoming and outgoing trains. A number of local trains, and those traveling on international lines from Sofia, Budapest and Sarajevo were delayed this morning. The protesting workers are demanding payment of overdue wages, and for the company management to be replaced.

Unused advantages of Free Trade Agreement with Russia

2010-03-04T02:14:00.000-08:00

Belgrade, Feb. 25, 2010 (Source: Tanjug) - Serbian Chamber of Commerce (PKS) President Miloš Bugarin said that Serbia has failed to fully exploit the advantages of its free trade agreement with Russia.“The quantity of goods and continuity of their delivery by Serbian exporters have not met the demands of the huge Russian market”, Bugarin told the Tuesday edition of Belgrade daily Blic. Asked if the political situation in Serbia is the reason why the Russian Duma has still not ratified the agreement, Bugarin said that “what is important for Serbia's export economy is that the arrangement can be implemented in full.” Bugarin said “Serbia needs to focus on the customs union which will be formed by Russia, Belarus and Kazakhstan and which will create a market of 200 million consumers.” “If we could up production both in Serbia and the region, the sky would be the limit for food exports to this market. The trade liberalization is far greater with Belarus than with Russia, and it is time we start negotiating free trade with Kazakhstan,” Bugarin assessed. Bugarin said “energy is the cornerstone of Serbia and Russia's strategic cooperation, and that this does not comprise only the privatization of oil company NIS, but also the South Stream gas pipeline, the oil pipeline, the gas storage in Banatski Dvor and the establishment of a mixed company for insurance and risk sharing in the Serbian and Russian markets.” There is also talk of building hydropower plants and restoring thermal power plants. “Serbia must improve its energy efficiency, because it ranks lowest in Europe,” Bugarin said.

IMF Reaches Staff-Level Agreement with Serbia on Third Review of Stand-By Arrangement

2010-03-03T05:31:00.000-08:00

Belgrade, Feb. 25, 2010 (Source: IMF Press Release No. 10/57 ) - An International Monetary Fund (IMF) mission, led by Albert Jaeger, met with with the Serbian authorities during 9-23 February 2010 as part of the third review of the country’s Stand-By Arrangement (SBA) and the 2010 Article IV consultation. At the conclusion of the visit, Mr. Jaeger made the following statement in Belgrade:
“An IMF staff mission and the Serbian authorities have reached agreement, subject to approval by the IMF Management and Executive Board, on the completion of the third review of the SBA. We expect the request to be considered by the IMF’s Board in late March. Completion will allow Serbia to draw €350 million to support its external reserve position.”
“The program is performing well: all key quantitative targets have been met, most of them with a considerable margin, including the target on the fiscal deficit, which was 4¼ percent of GDP in 2009. Progress is also being made in the structural areas, such as the reform of the pension system, the design of the fiscal responsibility legislation, and the corporate debt collection and restructuring framework. Encouragingly, with the global economy stabilizing and foreign banks remaining strongly committed to Serbia, the economy is starting to recover. We project a modest GDP recovery in 2010 and 2011 of 2 and 3 percent respectively. Inflation is falling broadly as targeted.“Despite these welcome trends, economic challenges remain substantial. Unemployment is high and rising, output and investment remain weak. This is insufficient for a perceptible rise in living standards. Recent events show that Serbia cannot afford a return to the pre-crisis model of growth based on high consumption and low domestic savings and low exports. The key challenge is to undertake growth-oriented structural reforms.“The public sector should reduce its high claim on resources while taking the lead in realizing the needed economic transformation. Thus, the 2010 budget should be tightly executed in line with the deficit target of 4 percent of GDP, focusing on expenditure restraint. This should free the room for essential public investment, with well-targeted social spending being protected. Further steps to anchor this strategy are expected to be specified in the discussions of the next review. “The mission also discussed scope for further monetary easing, plans for streamlining reserve requirements, and the exposure floors for foreign banks under the Bank Coordination Initiative. Additionally, it reviewed opportunities for reducing Serbia’s high level of Euroization.”

Spanair will start Belgrade to Barcelona flights in April

2010-03-02T03:07:00.000-08:00

Belgrade, Feb.24, 2010 (Serbia Today) - Spanish air carrier Spanair is scheduled to begin a direct Belgrade-Barcelona service, with the first flight expected to take off on April 15. Return tickets are expected to cost EUR 169, and can be purchased through the company's website. There will be three flights a week – on Tuesdays, Thursdays and Saturdays, Belgrade daily Blic reports. Spanair will fly Airbus A320 planes with 156 seats on the line. Belgrade will then enjoy direct flights to Spain for the first time in 18 years. Spanair is a Barcelona-based company, and is not considered a low-cost carrier although low ticket prices can be likely be bought at opportune moments. “We have concluded by detailed market analysis and interviewing passengers that what's missing the most regarding the offer of the Belgrade airport were direct flights to Spain,” said Director of Nikola Tesla Airport Velimir Radosavljević.“We are glad that the lifting of visa regime, expanding the capacity of our airport and meeting requests of air carriers have all contributed to attracting Spanair as another in a series of air carriers,” he said. “The goal is to have two flights from Belgrade to Spanish cities every day. I have Barcelona and Madrid in mind primarily, but in the summer season, also to Valencia, Malaga and Palma de Mallorca. The conditions have been fulfilled for charter flights this summer not only to Palma, but also to Alicante and Costa Brava (Girona),” Radosavljević added. With this announcement, many companies have started offering lower prices for connecting flights from Belgrade to Barcelona. The lowest price offered by Lufthansa is EUR 200, but the lowest price is being offered by SWISS with tickets starting from EUR 158. This, however, is only for those who plan to travel in early May.

Serbia needs public-private partnership for development of infrastructure

2010-03-01T07:18:00.000-08:00

Belgrade, Feb. 23, 2010 (Source: serbiangov.rs) – Deputy Prime Minister Bozidar Djelic said today that Serbia needs public-private partnership for building local infrastructure which will attract foreign investment and quality communal services, higher employment rates and a rise in living standards as well. Speaking at a seminar on public-private partnership in infrastructure, organized by the World Bank (WB) office in Serbia, Djelic said that it is necessary to pass the appropriate legal regulations to facilitate development of this partnership. He added that amendments to the Law on Concessions should be adopted in the middle of this year. The existing Law on Concessions is suitable for large national projects, but it cannot satisfy the needs of local projects.
Djelic noted that representatives of the Serbian government, local self-government and WB agreed at a meeting held this morning at the Serbian government to initially work with smaller projects, for recycling and processing of waste waters, which would be at the same time linked to electricity production plants. WB expert Jose Luis Guasch said that public-private partnership can and should be a powerful instrument for investment in infrastructure. He explained that it can generate jobs and increase household income, particularly in highly indebted countries, such as Serbia. He observed that Chile and Korea have been the most active in promoting public-private partnership with 70% and 90% respectively of all projects there realized through that form of cooperation.
Guasch said that this form of partnership is mainly used in the field of traffic, water supply and sewage systems, waste collection and disposal, city traffic and building of schools and hospitals. The seminar was opened by head of World Bank office in Serbia, Simon Grey.

Serbian Dinar hits new low

2010-03-01T01:17:00.000-08:00

Belgrade, Feb. 22, 2010 (Serbia Today) - When banks open on Monday, February 22, the domestic currency will be at its lowest value compared to the Euro since the introduction of the European currency in 2002. One Euro will be worth RSD 98.9293 on Monday. This decrease in value will occur despite interventions by the National Bank of Serbia, which sold an additional EUR 10mn on the foreign currency market in an effort to avoid further drops in the domestic currency’s worth. The NBS has sold EUR 371.5mn thus far this year in an effort to stabilize the exchange rate. In 2010, the dinar was at its highest rate on January 4, at which time one euro was worth RSD 95.9679.

Diana Dragutinovic: “No problems in talk with IMF”

2010-03-01T01:14:00.001-08:00

Belgrade, Feb. 20, 2010 (Source Tanjug) – Serbian Finance Minister Diana Dragutinović said that she does not know where the media heard that there are problems in the ongoing IMF negotiations. Dragutinović said at a press conference that government representatives are not concerned over this stage of the negotiations because, as she pointed out, Serbia "has fulfilled all its obligations" to the International Monetary Fund (IMF). She said that this is the second week of negotiations, and that the most important issue is pension system reform. Official talks between IMF delegates and the Serbian government, as part of the third review of the stand-by arrangement, started with a plenary session on February 9 and will continue until February 23. In the talks so far, IMF has rated positively the government's realization of the stand-by arrangement obligations, including the successfully conducted measures to alleviate the adverse effects of the crisis, macroeconomic indicators which are better than in other Eastern European countries, and the pension system reform activities to date. On May 15, 2009, the IMF approved a new stand-by arrangement for Serbia, worth EUR 2.9bn, for the strengthening of foreign exchange reserves. Two installments of the loan, totaling EUR 1.12bn, have been withdrawn so far. The IMF agreement requires Serbia to cut down budget spending on public employee salaries and to keep the salaries and pensions frozen in 2010. The agreement also envisages layoffs in the state administration and the adoption of a new pension and disability insurance law.

HIP Petrohemija savings €13 million

2010-02-24T02:55:00.000-08:00

Belgrade, Feb. 19, 2010 (Source: serbiangov.rs) – Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic said today that four months after the beginning of production, the savings of the petrochemical complex HIP Petrohemija stand at €13 million. The restructuring of the company has produced good results owing to favourable agreements with suppliers and the reduction of expenditure, said Dinkic.

Dinkic said that he is satisfied with today’s talks with Petrohemija executives and the factory trade unions and is pleased to see the results achieved since the completion of restructuring and the beginning of production. Major savings have been made compared to the previous period. Petrohemija should focus on increasing savings, improving energy efficiency and starting a new investment cycle, said Dinkic. We have decided to obtain a loan for new investments from the European Investment Bank as soon as possible. It is estimated that €70 million needs to be invested in the upcoming years, for since the 1980s no investments were made in the company, Dinkic said. He said that Petrohemija is potentially the most profitable state-owned company and that €200 million profits are expected this year. The factory can very soon make €300 million from exports, with previous financing. Dinkic said that new investments will satisfy the ecological aspect as well and that modernization of technology will make Petrohemija a factory that fulfils all EU ecological standards and citizens of Pancevo will no longer have to be fearful of pollution.

Government ready to support large investors

2010-02-24T02:51:00.000-08:00

Kragujevac, Feb. 18, 2010 (Serbia Today, srbija.gov.rs) – Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic together with a delegation of the International Monetary Fund (IMF) today visited car manufacturer Fiat Automobili Srbija (FAS) in Kragujevac.

After meeting with company’s management that presented the results of work on launching the new car model, Dinkic pointed out to the importance of this company reaching the figure of €1.5 billion from annual export. He said that the meeting with IMF representatives addressed ways to improve competitiveness of Serbian exports and the economy and noted that the project implemented in Kragujevac is one of those ways. Dinkic confirmed that the Serbian government is ready to support large investors. He added that it is good that IMF representatives could see that Serbia has export potentials for companies such as Fiat. He expressed satisfaction over the fact that the Kragujevac factory has continuously recorded positive progress. Dinkic announced that the company’s CEO Giovanni de Filippis informed him that orders for reconstruction works in the factory start this week and their value will amount to approximately €150 million. We have seen new investment in the area of lacquering unit, new uniforms are arriving, a thousand people were admitted to FAS, and they can now earn their living by themselves and not live from government subsidies, said Dinkic.

According to Dinkic the Serbian government in cooperation with Fiat plans to organise a summit of suppliers from Italy, South Korea, Japan and Slovenia in spring, with the idea of presenting Serbia as the most suitable locations in Europe for investment in car industry. Dinkic, together with Governor of the National Bank of Serbia Radovan Jelasic and the IMF delegation, will also visit the winery Radovanovic in the village of Krnjevo later today.

A very “thin” minimum wage envelope in Serbia

2010-02-22T00:23:00.001-08:00

Belgrade, Feb. 15 2010 (Serbia Today) – According to the last info released to media a minimum monthly wage in Serbia was in the second half of 2009 RSD 15.138 (155 Euros or 206 US dollars). When Labor Unions asked Government last year that this amount be raised for 3.5% to meet the growth of the living costs, the request was denied.
Recent proposal by the Labor unions in regard to the adjustment of minimum wages for 2010 is still not addressed by the government and it is expected that this question be resolved at the next session of the Social economy Committee. The prospects of the raising minimum wages are very small taking in the account the situation in the Serbian industrial sector. Last year industrial production went down 12.5%, the number of employees went down 5.1% and the average wages went down 8.6%.
According to economy experts in Serbia, bad economy policies and large public spending caused this situation in Serbia. If government raises minimum wage based only on the growth of the living costs, and not based on the realistic revenues from the business sector this will cause further problems for the Serbian economy.
Similar situation is in other countries of the former Yugoslavia with the exception of Slovenia. The minimum monthly wage there was recently raised for 22% ant it is now at 562 Euros ( $765).

EU strategy for Danube region

2010-02-21T04:27:00.000-08:00

Belgrade, Feb. 12, 2010 (Serbia Today) – Deputy Prime Minister for EU integration Bozidar Djelic held the fifth meeting of the government’s working group for cooperation with the EU in the Danube region on Wednesday, of which he is president. The meeting was also attended by representatives of 27 municipalities and cities which are located on the banks of the Danube River.

Key priorities of local government were discussed at the meeting. Projects for utilizing the development potential of the Danube will be designed based on these priorities. Djelic presented the underlying principles of Serbia’s national platform for participating in the comprehensive EU Strategy for the Danube Region. The platform will soon be posted on the Serbian government website and citizens will be able to post comments, proposals and state their opinions. It was agreed at the meeting that a larger-scale gathering should be held in early April to include representatives from all towns and municipalities in the Danube region, at which local government projects will also be presented.

NBS sells EUR 10mn in order to enable normal functioning of the foreign exchange market

2010-02-19T03:43:00.000-08:00

Belgrade, Feb.11, 2010 (Serbia Today) - National Bank of Serbia (NBS) sold EUR 10mn on the interbank foreign exchange market on Monday, Serbian News Agency Tanjug reports. The decision came in order to encourage trading and enable normal functioning of the foreign exchange market, the central bank said in a statement.The indicative euro exchange rate on Monday, determined by the morning trading on the interbank foreign exchange market, was RSD 98.6946 for one euro, said NBS. Including today's intervention, the central bank has sold a total of EUR 351.5mn since the beginning of the year, in order to alleviate excessive oscillations in the dinar exchange rate and enable normal functioning of the foreign exchange market. On Monday, the dinar continued its three-day recovery trend against the euro, as it went up by three paras (1 dinar=100 paras) or 0.03 percent, making the official middle exchange rate RSD 98.6519.

Program for starting up production in underdeveloped communities ready soon

2010-02-18T01:38:00.000-08:00

Belgrade, Feb. 10, 2010 (Serbia Today) – Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic said today that a program for starting up production in underdeveloped communities should be prepared by the end of February and that more than €100 million will be set aside for that purpose.

At a meeting between the Business Council and Serbian businessmen, Dinkic called on companies which have secure export markets and that can sell their goods to take part in this program and assist in the development of underdeveloped areas. The Deputy Prime Minister explained that the program provides long-term loans through the Development Fund and that it also includes two sub-program. The first sub-program is intended for companies from active industries which would obtain loans from the Development Fund. The loans would be favorable in the sense that 50% of funds from the loan should be covered by a mortgage. The second sub-program is intended for very poor municipalities like Kursumlija, Merosina and others. A mortgage will not be needed for loans, but only collateral for equipment that will be purchased with the loan, the Minister said. Dinkic explained that any bigger domestic or foreign renowned company can apply for the program, as well as those wanting to build more capacity. He underlined that this is not privatization, but starting up production in underdeveloped municipalities and creating jobs. The Deputy Prime Minister said that lower exports and poor domestic demand are problems that are still present in Serbia’s economy. Last year exports dropped by over 20% in relation to 2008, while imports dropped by 28%. However, he said that exports of semi-finished goods and raw materials increased by 10% and of durable consumer goods by almost 9% in relation to 2008. Dinkic said that a hard year is behind us and that according to economic indicators, Serbia will already get out of recession by the first quarter of the year. He voiced hope that economic growth this year will be bigger than 1.5%. he Minister stressed that Serbia’s public debt stands at 32% of GDP, which is still much lower than the EU’s average public debt of around 73% of GDP. Except for the loans for several infrastructure projects and factories of strategic interest for Serbia, the state should not get into any further debt, he said. The state will take loans for the real sector and its large exporting companies, the first of them being the mining and smelting complex RTB Bor, to which the state has already issued a guarantee for a €135 million loan. These funds are to be invested in a new smelting facility and a sulphuric acid factory, the Minister explained. Dinkic added that the second company is the petrochemical producer Petrohemija, announcing that talks will be held with the European Investment Bank regarding a loan to help increase the company’s competitiveness and energy efficiency. The Deputy Prime Minister noted that a program for purchasing Serbian buses with state subsidies will be initiated this week.Dinkic said that the program for purchasing Ikarbus and Neobus buses envisages allocating over RSD 1 billion from the state budget for the purpose of public transport in Serbian cities, as well as the private sector. He stressed that both companies and private individuals will be allowed to purchase the buses with a 20% discount for those with a Euro 4 diesel engine and 30% for LPG powered buses. The program will help to produce and sell over 200 buses made in Serbia in 2010, Dinkic noted.

IMF mission in Belgrade on Monday

2010-02-17T01:26:00.001-08:00

Belgrade, Feb. 09, 2010 (Source: Beta, Tanjug) – The International Monetary Fund (IMF) mission arrived on Monday to continue talks regarding the third revision of its credit arrangement with Serbia. The IMF delegation will hold talks with various technical experts of the government and National Bank of Serbia. The IMF has warned Serbia that is not honoring the decision for freezing wages and pensions and the plans for the rationalization of the administration. The international financial institution stated that the government adopted EUR 120mn more than was agreed for wages in the administration, while the implementation of the plan for cutting the number of employees in the public administration is running late. A member of the Serbian Prime Minister’s economic team, Dejan Šoškić, said that he expects the IMF to have understanding for the tardiness in letting people go from the administration.
“Some things need to be implemented in accordance with realistic possibilities. In other words, it is not realistic to expect to finish all this in one or two months,” he said. “Sometimes the procedural questions are such that they are impossible to solve in a short period of time, so I believe that it is important whether we are working in accordance with the chosen orientation, and whether there are some objective circumstances for the tardiness,” Šoškić said.

Laws on Privatization Agency, free shares amended

2010-02-17T01:21:00.000-08:00

Belgrade, Feb. 08, 2010 (Serbia Today ) – The Ministry of Economy and Regional Development announced that the government approved amendments today to the Law on the Privatization Agency and the Law on free shares, which will allow citizens to receive shares of state enterprises before they are privatized.

The statement specifies that citizens will receive free shares of Telekom and Airport Nikola Tesla this year, as well as shares of oil company Naftna Industrija Srbije (EPS) in 2011.

These amendments introduce the formation of the Share Fund, which will not have management bodies or employees, with its portfolio of shares being managed by the Privatization Agency.

Amendments to the Law on the Privatization Agency envisage the merging of the Share Fund with the Privatization Agency, which will contribute to a rationalization in the number of employees and reduce costs.The process of free distribution of shares commenced on January 6, 2010, when citizens received free shares of NIS.

NIS should become an open joint stock company by June 30, 2010, after which citizens will be able to trade company shares on the stock market.