Dacic: Living off debt no longer possible

BELGRADE - Serbia has exhausted all possibilities of living off debt, Serbian Deputy Prime Minister Ivica Dacic said on Saturday, adding that the coalition that he is heading fully agrees with the austerity measures.

"Serbia is at a crossroads - it will take serious measures or continue with the lies that have to come to an end one day - a painful end, like in Greece and Argentina," Dacic told TV Pink.

The salaries and pensions will be reduced not because someone thinks that they are high, but because they are not based on production outputs and revenues, he noted.

The budget must be sustainable, whić means that we cannot have a deficit that is this high and then cover it by taking loans, Dacic said.

The total funds that go into salaries and pensions will be reduced, but the cuts will not affect the people with the lowest incomes, he said.
"It is a just decision and the government has no doubts about whether it should have been made or not," said Dacic, who reiterated that the government is united on the issue and that the decision was not made by the prime minister alone.

Thanks to the government's move, Serbia will save around EUR 700 million next year - and nearly 1.5 billion over the next few years - and reduce the deficit, he said.

The government measures will stop the collapse of the economy and help set the "wheel of the engine of the economy" in motion in a different direction in no more than a year or two, Dacic said.

The irresponsible policy in the past years has led to dozens of billions of euros of debt, while the gross domestic product and employment have failed to grow, Dacic noted.