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The Government of the Republic of Serbia

In the service of citizens

State to repay entire debt to pensioners

Belgrade, 31 August 2005

Serbian Minister of Finance Mladjan Dinkic presented today two bills on the repayment of debt to pensioners and a bill on investment funds.

Dinkic told a press conference that the parliamentary committee on economy has accepted all three bills proposed by the Ministry of Finance and that they should now pass the parliament.

He explained that the state owes 1.5 monthly pension checks to pensioners and that the total debt stands at 23.5 billion dinars, while the debt to beneficiaries of the farmers’ pension fund is 20 billion dinars.

Dinkic said that the state has decided to repay all debt to pensioners, totalling 43.5 billion dinars, even though their pension checks have been arriving on a regular basis, and he explained that the intention is for pensions to be paid regularly during the current month for the previous month and that this dynamic should be achieved by the end of the year.

The debt to pensioners will be transferred from the pension fund into state debt, meaning that the debt to the employees’ pension fund will be repaid over three years and the debt to the farmers’ pension fund over five years, Dinkic explained.

He also said that repayment of debt from the 1989 loan for Serbia’s economic recovery has been launched today and that the maximum per bond payment this year will come to €1,060.

Dinkic added that total declared claims on this debt amount to €49 million and that €4.4 million of it was repaid last year. This year, according to him, €4.6 million will be paid back, with the entirety of the debt to be settled by the year 2007.

He also announced that the payment of 2005 wheat premiums to 65,000 registered farms, totalling 633 million dinars, will begin on Thursday, September 1.

Head of the Securities and Capital Market Department Jelena Kralj said that a bill on investment funds is of outstanding importance for the development of the country’s financial market.

The bill includes the option of so-called “collective investing,” she said and explained that this provision allows small investors and ordinary citizens the opportunity to pool their sums in order to invest into large equities.