Serbian citizens owe to banks EUR 560 on average

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 
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

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

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

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

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

 
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

 
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.

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

 
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

 
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

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

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

 
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

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

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

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

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

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

Dinkic: from May 1st only RSD loans

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

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

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

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

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

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”

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

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

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

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

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

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

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

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

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

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

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

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?

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

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

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

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

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

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

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

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 most interesting candidates for the new governor

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

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

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

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

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

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

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

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.