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The Government of the Republic of Serbia

In the service of citizens

Parliament to discuss budget bill in emergency procedure

Belgrade, 9 November 2005

Serbian Minister of Finance Mladjan Dinkic said that the Serbian government will adopt several bills at its session tomorrow, including the bill on the 2006 budget.

Mladjan Dinkic at today's press conference

Speaking at a press conference, Dinkic said that these bills will be forwarded to the Serbian parliament for immediate adoption, in line with the agreement made with the International Monetary Fund (IMF). He voiced hope that the parliament will adopt the package of these laws by late November, and said that that will be a positive signal for holding a session of the IMF's board of directors, which will, in line with its established practice, be held at the latest six weeks from the adoption of laws in the parliament.

The minister confirmed that the payment of October pensions to all pensioners will begin tomorrow, which will be increased by 3.6 percent, while October pensions for farmers will be increased by 40 percent in relation to the previous month.

For the first time in ten years, pensioners in Serbia will receive pensions for the previous month, Dinkic said and reiterated that this is the second pensions increase in Serbia in the past two months. This time the increase totals 10.6 percent.

Dinkic said that he won't give up the stance he expressed in the negotiations with representatives of the IMF and that is that the state's debt to pensioners, totalling 45 billion dinars, should be paid in its entirety, and voiced hope that in the upcoming days an agreement on this issue will be reached with the IMF.

He said that the Serbian government submitted to the IMF a new, modified proposal of the payment of debt to pensioners, and that he expects the confirmation of the plan for the payment of salaries in public companies in 2006.

The minister said that this month salaries of the members of the Army of Serbia-Montenegro will be increased by 12 percent, in which process the professional army members, from second lieutenants to generals, and civilians with a university diploma, will receive an increase of 24 percent, and pilots 32 percent.

The increase in salaries in the Army has been made possible by the reduction in the number of employees, Dinkic said and specified that almost 7,500 people left the armed forces, of which 5,200 were civilians, and the remaining were soldiers.

Dinkic said that negotiations with the health and education unions are underway and added that owing to reforms in the health sector and voluntary retirement of 7,500 workers, the ratio between the salaries of doctors, medical technicians and non-specialised workers will be 4:2:1.

Speaking about the situation in the education sector, Dinkic said that the declaration on the voluntary retirement of educational workers is underway and it will be completed by the middle of November. He explained that the growth in salaries in this sector will depend on the reduction of the number of employees.

Dinkic said that the first phase of the tender for the privatisation of Vojvodjanska Banka has been completed. The bidders are 11 leading European banks - two banks from Italy and France each, four from Greece, a mixed Italian-German-Austrian bank and one bank from Poland and Hungary each. He added that the privatisation of Vojvodjanska Banka should be completed in the first half of 2006.

He said that negotiations are underway with the Hungarian bank OTP on the privatisation of Niska Banka, and at the end of January 2006 a tender will be called for Kredi Bank from Kragujevac.

Dinkic said that during the first 10 months of this year Serbia realised a sum of 38 billion dinars from privatisation, of which an influx of 23 billion comes from the privatisation of banks, while 15 billion was realised from the privatisation of socially owned businesses.

In October of this year the total budgetary revenue of Serbia was 39.8 billion, and expenditure was 34.2 billion, so that a record surplus of 5.6 billion dinars was achieved, said Dinkic and added that the total state surplus reached 15.4 billion dinars during the first 10 months of the year.

Dinkic said that the budgetary revenues in the first 10 months totalled a sum of 334.4 billion dinars, expenditure was 318.9 billion, and surplus was 15.4 billion dinars, while local self-governments realised a surplus of approximately 7.8 billion dinars, the city of Belgrade alone producing 5.3 billion dinars.

He said that during the period of January to October, 40 percent more budgetary revenues were realised from the added value tax, against the revenues from sales tax from 2004, while the growth of revenues from excise tax on domestic tobacco products has doubled.