Three years after its last deal with the International Monetary Fund (IMF) was suspended because of its budget waste, Serbia finally has a new $ 1.2 billion.

That should be the hard part, and investors are waiting for all the details of the promised reforms. Nonetheless, the Serbian government has repeatedly expressed its determination and some of the assets for sale are likely to generate international interest.

The IMF Executive Board approved the Triennial Preventive Stand-By Arrangement (SBA) on February 23, announcing that the program had three main objectives: fiscal consolidation, strengthening the financial sector, and increasing competitiveness and growth through structural reforms.

From a statement by David Lipton, the Fund’s first assistant manager:

“The Serbian economy is facing severe fiscal imbalances and entrenched structural weaknesses in the context of slower growth and adverse regional spillover effects. The authorities’ program, supported by the Fund, provides an opportunity to restore public debt sustainability, rebalance macroeconomic policies, strengthen financial sector resilience and improve competitiveness and medium-term growth potential. “

Last year, Serbia recorded the largest consolidated budget deficit in Europe at 6.6 percent of GDP (the consolidated figure was probably even higher), while debt exceeded 70 percent, well above the theoretical legal limit of 45 percent.

Serbia’s latest IMF deal, a $ 1bn SBA, the current administration says it is picking up the pieces.

The IMF praised government reforms over the past year, including labor and pension laws, and its ownership of budget cuts. While some felt this was not yet as far-reaching as hoped, the Fund endorsed the target of reducing the debt ratio by 2017 and called for the usual calls for “improving the framework for public finance management”.

As in many other countries in the region, Serbia has seen an increase in the non-performing loan ratio in recent years, and the Fund welcomed the government’s commitment to design and policy.

It stated that the pressures on the economy by tightening fiscal policy could be offset by easing monetary policy, a path the central bank has already taken as inflationary pressures have eased. The country is also benefiting from exchange rate flexibility, added Lipton – although the dinar’s weakness has caused some concerns in recent years.

While the IMF’s comments were bullish, investors will be interested in a clearer roadmap for the Fund’s three objectives – consolidation, fiscal stabilization and reform.

“The confirmation of the precautionary agreement by the IMF is positive in the short term, especially with regard to offsetting the EUR / RSD upward pressure,” Ivana Kovacic, analyst at Hypo Alpe Adria, told beyondbrics.

“However, we believe that the IMF wants the sovereign to go the way and not just talk the talk. From our point of view, closing the deal was “the easier” step. The challenge is to keep the deal going for the next three years and get serious about any necessary consolidation measures. In that regard, we are waiting for the IMF’s Article IV consultation to see all the austerity measures the Fund would like to see. “

Significantly, the Fund’s opinion emphasizes the importance of restructuring state-owned enterprises both as a means of reducing budgetary pressures and as a structural reform measure. The government has drawn up a list of more than 500 companies to be privatized and in November Economy Minister Zeljko Sertic told beyondbrics that the program was on the right track and was attracting great international interest.

Kovacic says this process has “not been going as smoothly as planned so far”.

“We are skeptical of the country’s plan to complete the restructuring of state-owned companies this year, taking into account sensitive issues (such as optimizing the number of employees), and therefore see the risks that arise from this.”

Some in Serbia fear that the layoffs in the public sector, likely resulting from privatization and restructuring, could lead to protests such as those that have seen across south-eastern Europe in recent years. However, Milan Parivodic, a former economic minister who is now acting as an adviser to investors in Serbia, says small demonstrations that have surfaced are unlikely to snow.

Parivodic informed beyondbrics that Sertic had assured him that privatizations would take place.

“The government has every interest in promoting privatization one way or another,” said Parivodic. “Serbia is simply unable to extend this process, it must be completed, the government is determined to implement this, and I understand that the IMF has recognized this intention with the credit confirmation.”

Telco Telekom Srbija and pharmaceutical company Galenika are likely to be among the more attractive assets on the block, while Prime Minister Aleksandar Vucic has mobilized Chinese interest in engine and tractor manufacturers. Other assets are likely to be less attractive.

“There could be interest from European, American, Chinese or Indian investors, but Russia is too consumed by its own turmoil,” said Parivodic. “The advantage is that Serbia offers duty-free access to a huge market with hundreds of millions of people, mainly in the EU, but also in Russia, EFTA and Turkey, as well as regional markets. The skilled workers are also very important. Risks arise mainly from bureaucracy. “

Serbs and investors alike are now waiting for the government to take the next steps.

Back to Beyondbrics

Today, the Minister of Finance, Labor and Transfers, Hekuran Murati, signed the decision for the operationalization of Measure 1.3 – for the Support of Women in Employment.

Through a Facebook post, Murati said that this measure provides for a 50% salary subsidy for the first three months.

“This measure provides for a salary subsidy of 50% (max 170 euros) for the first three months for all women employed from the tax period July / 2021 onwards. “After the 3-month period, they will be subsidized according to Measure 1.2, with 10% of the gross salary”, he wrote.

According to him, the condition is that the new employees do not appear active in the tax period June / 2021.

Murati said that the application, the same as for measure 1.2, will be made through the EDI system of TAK. / Voice

Photo:pink

The total value of the third aid package is 266 billion dinars, and what has been realized so far is: payment of 3 minimums for more than 1.2 million citizens, 60 euros for the unemployed, the first 30 euros for 5.7 million citizens and 3,000 dinars for all vaccinated.

Truckers receive 600 euros per bus

The first on the payroll are the hauliers. They will be paid 600 euros per bus on July 28, and this will be the fourth installment, while the next two installments will be paid in the next two months. A total of 654 companies will receive financial assistance.

Payment of the minimum for freelance artists in early August

On August 6, freelance artists will receive the last installment of a minimum of 30,900 dinars. We remind you that this help can be received only by independent artists whose status has been determined by a representative association in culture.

Namely, this decree was adopted in April, when it was prescribed that two minimums would be paid to them (in July and August). Funds are allocated for each employee for whom the business entity paid the salary for December 2020 and submitted the appropriate tax return.

For pensioners, the first payment of 50 euros in the fall

The state will make pensioners happy with additional money in September, when they will receive another 50 euros, so with the payment of 50 euros, the total assistance for the oldest citizens will rise to 110 euros, including those 30 euros.

Last payments

All citizens of Serbia will receive another 30 euros in November, and as the President of Serbia Aleksandar Vucic said in the previous days, due to the budget surplus of more than 200 million euros expected in July, the state will be able to pay another 20 euros to all citizens, and they will receive that money in December, which is the last giving from the state package. An additional application is required for the last 20 euros.

It should be reminded that citizens from Kosovo and Metohija, including children, received 100 euros each in May, and the unemployed 200 euros each, while in June, the unemployed in other parts of Serbia also received 60 euros each.

In the previous period, the money was also provided for vaccinated citizens, who received at least one dose by March 31, and the amount of payment was 3,000 dinars.

world
March 12, 2021 – 00:03

President Joe Biden on Thursday signed into law a $ 1.9 trillion stimulus package, commemorating an anniversary of the imposition of a curfew in the United States on the coronavirus pandemic, a measure aimed at easing Americans and strengthening the economy.

The package received final congressional approval Wednesday, giving the Democratic president a landslide victory in the first months of his term.

“This historic law is about rebuilding the backbone of this country,” Mr Biden said before signing.

Mr Biden signed the bill ahead of a speech Thursday night marking the anniversary of the imposition of a pandemic on the country. It is expected to boost Americans’ vigilance and offer hope as the number of people vaccinated across the country is rising.

The signing of the legal package by Mr. Biden, dubbed the American Rescue Plan, was originally scheduled for Friday, but White House Chief of Staff Ron Klein said that changed with the arrival of the law in the White House on Wednesday.

“We want to move as quickly as possible,” Klein wrote in a Twitter post.

The package provides $ 400 billion in direct $ 1,400 direct payments to most Americans, $ 350 billion in assistance to states and local governments, an expansion of child payments, and an increase in funding for COVID-19 vaccine distribution. -s./voa/