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The Government of the Republic of Serbia

In the service of citizens

Government measures to help Serbia overcome crisis without much difficulty

Belgrade, 6 January 2009

Serbian Prime Minister Mirko Cvetkovic stated in an interview for the Christmas edition of the Vecernje Novosti daily that in 2009, the year of the global economic crisis, Serbia needs solidarity, unity and frugality and not strikes and chaos.

The government’s official web site gives excerpts of the interview.

About the New Year:

In 2009 Serbia must sail into more peaceful political waters. The chief words should be compromise and stability and not conflict, division, campaigning and elections. We are also entering the year of the greatest economic crisis of modern times, which is why now more than ever we need solidarity, unity and frugality and not strikes and chaos. The global economic crisis knocking on our door is not a TV joke. This is a huge and serious matter. The world has not seen anything like it since the 1930s. Everyone can rest assured that the Serbian government has the strength and the capacity to keep the crisis in check. The measures we have taken and are yet to take will help Serbia to overcome the crisis without difficulties such as poverty and famine. This year will not be easy on us, but we will do all we can to make sure it is not much harder than the previous one.

Can the crisis endanger the planned state affairs in 2009?

It is certain that the crisis will affect all priorities, including Serbia’s road to the EU. The crisis has already affected Europe, which is why Europe will now be somewhat more pre-occupied.

How far will Serbia go on the road to the EU?

Our plan is to apply for candidate status in April. We will continue adopting European laws in parliament and thus get ready for full membership.

About preserving jobs:

We will do all we can to preserve jobs this year. Naturally there will be some lay-offs, but there will also be new jobs. We must not continue the policy of preserving unproductive jobs. The state will create an ambience which will give rise to effective jobs that bring in profit to the employer, tax revenues to the state and security to employees. This is the stimulative character we incorporated in the budget for 2009. For instance, we have earmarked more funds for the continuation of work on Corridor 10. A number of companies will apply as contractors and thus create new jobs.

About budget for 2009:

I have not met a single budget user satisfied with the budget. This is a turn in the fiscal policy. It shows restrictiveness and frugality, which is characteristic of the entire set of measures for fighting the ongoing crisis. It affects the amount of money designated for budget beneficiaries and it is only natural that they are dissatisfied. None of them are happy with the amount of funds set aside for their needs, but on the other hand they all realise that these budget limitations cannot be exceeded. There is unanimous agreement within the government on the budget as a whole. The opposition has also shown responsibility and helped adopt the budget at the last moment, for which I am truly grateful.

Despite the budget’s restrictive element, will there be stimulation for the economy?

We have projected the funds that will be injected should the need arise. The Development Fund will set aside around €200 million for incentive loans to SMEs. We have also envisaged loans of €250 million from the European Investment Bank. The budget will also guarantee half a billion Euros to the National Bank of Serbia so that the bank can continue with financial support to exporters and companies that can replace imported products with their own. The goal of all this is to improve the foreign trade balance.

On collective agreement:

Serbia does not have enough funds to cover trade union’s demands for meal allowances and holiday supplements, which imply a 20% increase in salaries. The government offered a realistic solution, i.e. to postpone the implementation of the collective agreement until Serbia overcomes the consequences of the global financial crisis.

What is next?

The government expects negotiations to continue immediately after the holidays, which will lead to the signing of a more appropriate collective agreement.

What would have happened, if the government had endorsed the union’s demands?

The acceptance of the union’s demands would lead to hyperinflation and mass dismissals. Numerous small enterprises would be closed, many of which have already announced bankruptcy.

On trade unions threatening strike actions:

Problems cannot be solved on the streets. Strikes and rallies can only cause chaos. According to the government’s clear stance salaries will stay at the same level in 2009. Everybody should carefully consider the fact that meal allowances, holiday supplements and salaries cannot be earned on the streets.

On cooperation with Fiat at the moment when the car industry is suffering greatly from the consequences of the global financial crisis:

Serbia and Fiat agreed that 2009 will not be a year of production, but of investment. Serbia will invest in infrastructure, Fiat will invest in construction and car production will start next year. The crisis will not hamper the project, unless Fiat is left without money and has to postpone its activities in Serbia. For the time being there is no sign that something like that might happen.

On the sale of the Serbian oil industry NIS to Russia’s Gazprom: The sale of the Serbian oil industry NIS is a very important move for Serbia. Considering the current prices of oil companies all over the world, Serbia should be satisfied with the price it reached with Gazprom.

On giving up the signing of all three parts of the agreement

Serbia and Russia could not have signed the agreement in its entirety, as Serbia does not have the necessary documentation for the two remaining parts of the agreement. The government is certain that Serbia will nevertheless benefit from the agreement. Both sides determined clear deadlines and will be able to sign the agreement on the construction of the gas pipeline by the second half of 2010.

On the possibility of the government reconstruction:

Early elections are the worst possible solution at the moment, as they would slow down the government’s struggle to overcome the crisis. We all share the same opinion concerning the fundamental issues, such as Serbia’s EU integration.

The protection of Serbia’s interests in Kosovo-Metohija:

Serbia will never accept Kosovo-Metohija independence. We hope that the International Court of Justice’s opinion on Kosovo-Metohija independence will be in Serbia’s favour. Serbia’s goal is to help Serbs in the province to overcome their everyday difficulties.