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The Government of the Republic of Serbia

In the service of citizens

Agreement with IMF in October

Belgrade, 7 September 2009

Serbian Prime Minister Mirko Cvetkovic said that in October Serbia will sign an agreement with the IMF which will bring Serbia financial stability and a better image among international institutions.

In an interview with yesterday’s edition of Vecernje Novosti newspaper, Cvetkovic said that Serbia will not see a “hot autumn” of massive strikes, riots in the streets and deepening economic problems.

He stressed that major reforms will be carried out in the public sector, step by step progress will be made and living standards will be improved.

Over the next six weeks we will adopt a comprehensive plan for major future public sector reforms in Serbia. Serbia will have to accomplish this enormously difficult task within the next few years, said Cvetkovic.

He said that Serbia needs the IMF because the arrangement with the IMF proves the value of the country’s economic policy.

We have now received nearly €420 million and the funds are already available. We can use them not just for increasing our reserves but also for the budget, explained the Prime Minister.

Asked whether the number of surplus state officials has been established, Cvetkovic answered that this has not been done yet.

We will establish the number by comparing our situation with other European countries. The basic criteria will be the number of officials per 1,000 people. If it is established that we have more than necessary, changes will be made, he said.

He said that a 10% personnel reduction is a rough estimate.

A preliminary analysis has been made for reducing the number of employees in local self-governments by 9%, or some 8000 employees. Analysis of the state administration is continuing. We will have a detailed plan with all the specifications by the time the IMF mission arrives, said Cvetkovic.

He said that analysis will be made of all sectors – state and local administrations, public companies, education, health, the pension system, police and the military.

A special analysis will be drawn up, with recommended measures for each sector, he explained.

He said that in the upcoming period the government will provide an estimate for long term public spending cuts. He reiterated that the government will succeed in preparing a plan for public sector reforms, adding that the government is looking at VAT and income tax increases solely as last resorts.

The Prime Minister said that he does not expect social unrest.

We are seeing the first signs of recovery and the worst is already behind us. Now we can say that we have been through the worst part of the crisis. The government’s social benefit measures will help the most vulnerable employees, regardless whether they have been on strike or not, he said.

Cvetkovic reiterated that Serbia is firmly committed to EU integration.

Our goal is the unfreezing of the Transitional Trade Agreement with the EU and all that is up to us to achieve it, we shall certainly do, he said.

He said that he believes the International Court of Justice (ICJ) will give an opinion on the legality of Kosovo’s unilateral declaration of independence which will be in favour of Serbia, stressing that Serbia’s team of legal experts is ready, has prepared strong arguments and believes that the ICJ’s opinion will become a basis for new talks.

The Prime Minister said that he expects that the bill on transference of jurisdictions to the Autonomous Province of Vojvodina and the Statute of the Province will soon reach before parliament.