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The Government of the Republic of Serbia

In the service of citizens

Krkobabic talks with IMF representatives

Belgrade, 27 October 2009

Serbian Deputy Prime Minister Jovan Krkobabic talked today with head of the International Monetary Fund (IMF) Mission to Serbia Albert Jaeger as part of the second and third round of negotiations.

Albert Jaeger, left, and Jovan Krkobabic

According to a statement by the Deputy Prime Minister’s Cabinet, the IMF requests that Serbia makes savings wherever possible, in order to reduce public spending and help the country out of the crisis.

During the talks Krkobabic explained that pensions in Serbia are generally very low and that no cuts can be made there.

He presented a detailed picture of the overall reform of the pension system, whose aim is to be economically sustainable.

Krkobabic stressed that the pension system we have today is burdened with numerous negative effects from the past and is additionally jeopardised by unemployment and lack of discipline when paying contributions for workers.

The Central Register will provide a more rigorous control of payments of contributions to the Pension and Disability Insurance Fund and introduce order in this field.

Short term and long term measures related to the reform of the Pension and Disability Insurance Fund have still not been finalised and a number of options discussed with the IMF are still under consideration.

He said that it was agreed that proposals regarding a new Pension and Disability Insurance system should go before the government in December.

Speaking about the time period for freezing public sector salaries and pensions increases, he said that this will depend on the rate of economic recovery and that they cannot be frozen for too long a period of time because inflation would seriously affect the lives of pensioners, many of whom live below the poverty line even now.

It was agreed at the meeting that the reform of the Pension and Disability Insurance system is proceeding as planned despite the complexity of problems in this area which have been made even more difficult by the current crisis, concludes the statement.