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The Government of the Republic of Serbia

In the service of citizens

Employees of Zastava Employment and Education called upon to receive severance payment

Belgrade, 20 August 2007

The Serbian Ministry of Economy and Regional Development stated today that it has once again called upon employees of the company Zastava Employment and Education from Kragujevac to report for receiving severance payment until August 27.

According to the statement, the government brought a decision to stop financing this company by August 31, considering the fact that tax payers’ money should not be used for paying salaries to redundant employees.

The realisation of the said decision is the precondition for the success of the upcoming privatisation of the company Zastava Motor Works and for finding a strong strategic partner.

From the time that the Zastava Employment and Education was founded it was financed completely by funds from the Serbian budget and thus far it has cost the government and citizens nearly €100 million.

The Ministry has offered employees severance pay of €250 per year of employment, which is on average €6,500 per employee, or nearly €10,000 for senior most employees, which is the largest severance pay per year of employment offered in Serbia thus far.

The total budget for similar offers to employees of other companies in a similar situation is worth RSD 3.2 billion, while the social programme offered to Zastava Employment and Education alone is RSD 2.3 billion, concludes the statement.