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The Government of the Republic of Serbia

In the service of citizens

Country's economic recovery as most important task

Belgrade, 22 October 2012

Prime Minister Ivica Dacic said today that the government’s priority is the economic recovery and stopping negative parameters that hinder economic and social status of citizens.

Author: Fonet

Addressing the 12th Economic Summit of Serbia called “Building integral vision of Serbia’s future“ held at the Hotel Metropol Palace, Dacic pointed out that in times of economic crisis, all goals set by the government depend on the economic recovery of the country.

The primary objective of the government is to stop the economic decline, reduce the budget deficit, create new investment and reduce unemployment, the Prime Minister said, reiterating that the government wants active dialogue with all segments of society.

According to him, the government has restored the work of the Social Economic Council and established the National Council for the Economic Recovery, which will now consider a number of measures that can be undertaken without additional funding.

Dacic said that the government will work to create a more favourable environment for foreign investors, but also that local companies will get better conditions for doing business.

He recalled that major economic problems that Serbia is faced with include high budget deficit, unstable conditions, unstable exchange rate and high cost of capital.

It is necessary to solve the problem of high insolvency of companies and to establish financial discipline, strengthen lending activity of companies and lower the cost of capital, reduce operating costs and para-fiscal levies and increase the efficiency of public procurement, and continue the fight against corruption, the Prime Minister said.

He stressed the necessity of improving the overall business environment in Serbia, adding that it is unacceptable that Serbia in the World Bank report is graded the 175th on the list of countries based on the efficiency of issuing a building permit, which requires 19 procedures and 270 days.

Dacic warned that the duration of trials also hinders the progress of the country and said that by the execution of court decisions Serbia takes the 104th place, noting that it takes 36 procedures that take 365 days for a court process to be completed.

He called on foreign investors to invest in Serbia, but to turn to the state in case of any problem related to regulations or corruption in order to address the problem together and to associate with the Serbian government and work on joint projects.

Also, the Prime Minister called on foreign and domestic investors to give proposals for the economic recovery of the country, which will be seriously considered. He said that the government is preparing the budget for next year, which will aim at stabilising the economic situation on the one hand and enabling growth and development on the other.

Minister of Finance and Economy Mladjan Dinkic announced at the summit that the Serbian government is planning to adopt at its next meeting the 2013 budget bill which envisages cutting the budget deficit in half, to 3.5% of the GDP.

Author: Fonet

Dinkic said that the government has a serious and firm intention to cut the budget deficit by half in the next year and reduce it even further in 2014 to 1.9% and in 2015 to 1%.

At the end of this year public debt will be 60% of the GDP, and will decrease below that level as of 2014, the Minister explained.

According to him, a medium-term reform programme has been adopted with structural measures that entail improving business climate, the continuation of abolition of para-fiscal levies and further simplification of the tax payment system by switching completely to electronic tax returns within the next year and a half.

Dinkic said that the government today approved the Bill on the takeover of assets and liabilities of troubled banks, which provides for the transfer of assets and liabilities of a troubled bank to another financially capable and stable bank.

The application of this law will enable the resolution of problems of Nova Agrobanka, whose existing business model is unsustainable in the long run, the Minister pointed out.

He announced that this law should be discussed in the Serbian parliament on 24 October and the voting should take place on 26 October so the citizens who have deposits in Nova Agrobanka will become depositors of the postal savings banks Postanska Stedionica as of 29 October.

The Economic Summit of Serbia has been organised under the auspices of the Serbian Chamber of Commerce and the Foreign Investors Council.