Police intervene against protesters in Belgrade

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

Unused advantages of Free Trade Agreement with Russia

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

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

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

Spanair will start Belgrade to Barcelona flights in April

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

Serbia needs public-private partnership for development of infrastructure

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

Serbian Dinar hits new low

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

Diana Dragutinovic: “No problems in talk with IMF”

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