Serbia to Start Talks on New IMF Loan

The Serbian government and IMF representatives will begin a series of meetings in Belgrade on Tuesday to discuss further spending cuts aimed at securing a deal on a new loan from the international financial body.

Dusan Vujovic, the Serbian finance minister, said that over the next two weeks they will discuss Serbia's macroeconomic projections, with the talks on subsidy cuts and reductions in the number of workers employed at publicly-owned companies scheduled for the second week.

Vujovic stated that Serbia had already created "solid foundations" for securing IMF backing by reducing public sector salaries and pensions, but that the country would probably have to make further cuts.

He explained that Serbia will need to cut its expenditures on public companies, as well as to draft new, improved managerial structures for state enterprises and reduce the number of employees in these companies.

Vujovic explained that public company Electric Power Industry of Serbia, EPS, for example has 600 different directors, while a company of that scale only needs about 100 people in these posts.

Another step will be cutting subsidies to both private and state-run businesses.

According to the revised 2014 budget adopted on October 26, Serbia spent roughly 13 billion dinars [€108 million] more than originally planned on subsidies in 2014, primarily on public companies undergoing restructuring.

The IMF suspended its last precautionary loan programme with Serbia in February 2012 when Belgrade stopped meeting agreed targets on spending and public debt.