Serbian Govt Plans Salary Cuts Amid Crisis

Belgrade | 14 April 2009 | – The Serbian Government is to back salary cuts for forty percent of all public administration personnel on Thursday, says Economy Minister Mladjan Dinkic.

Dinkic stressed that this would not be a government recommendation but a legal commitment, adding that the law could enter force on May 1. According to the minister, the government will enact a decree allowing privatised companies to convert state debt into capital in these firms at the same cabinet meeting.

“All public administration salaries are coming down, those that are above RSD 40,000 a month (around €450). So a bill has been prepared, it will be adopted at Thursday’s cabinet meeting and we expect parliament to rubber-stamp it in the second half of this month. That means it’ll come into force on May 1,” said Dinkic.

“That literally applies to all institutions, the Presidency, the government, local authorities, the provincial government, the Serbian Chamber of Commerce, the National Bank of Serbia, the Securities Commission, literally all institutions where the state is the founder and which are of public importance,“ he explained.

At the same time, it has been decided that the Parliament temporarily suspends its current session in order to begin a debate on the anti-crisis measures and the budget review. Parliamentary Speaker Slavica Djukic Dejanovic announced that the current agenda would be suspended and a new session called.

“The ongoing session cannot be finished by the end of the week and, for that reason, we believe that there is nothing more urgent than the economic measures and overcoming the crisis, we’ll suspend the session and resume it once we are done with the government’s proposed measures,” she explained.

Djukic Dejanovic hopes that the government’s measures, adopted on April 7, will be given to parliament by the end of this week.

She said that deputies needed a few days to acquaint themselves with the proposed measures, make suggestions and submit any amendments. “Parliament must bear all the burden that the citizens are carrying in these tough times, and that is why all the measures will apply to parliament too,” Djukic Dejanovic said.

However, the opposition has voiced concern at the Speaker’s plans. Democratic Party of Serbia, DSS, official Radojko Obradovic told Belgrade’s B92 network that this decision showed that the government had no plan for work in parliament. Serbian Progressive Party deputy leader Aleksandar Vucic has poured scorn on the government’s anti-crisis measures, adding that the bulk of his party’s proposals had been rejected.

“The government’s measures don’t support industrial development or job creation, and serve merely as a one-off budget injection,” he said.

Vucic said it was necessary to make changes to monetary policy by cutting interest rates and developing the Serbian banking system, as well as the financial sphere, as it was unwise to cut municipal budgets.

Measures already proposed by the Serbian government include a 10 percent downsizing of the public administration, cutting costs and spending by civil servants, and the introduction of taxes on mobile phones, petrol and luxury cars and yachts.

Serbia has been hit by the global financial crisis more than first expected and according to the latest International Monetary Fund estimates, GDP could shrink 2 percent although some economists fear the figure could hit 5 percent.
Source: Balkaninsight

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Posted by Gjergj Erebara on Apr 14 2009. Filed under Economy, Region. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry