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.