Serbia starts official talks about new arrangement with IMF on March 3rd

Official talks between the representatives of the Serbian technical government and the International Monetary Fund (IMF) Mission about a new three-year arrangement and current economic trends in the country will start Monday, March 3rd.

Negotiations on the new three-year arrangement were announced by Finance Minister Lazar Krstic, who said last week that the arrangement would be concluded by the new government. Until then, the outgoing government should carry out all the preparations so that the new government could make a decision and conclude a new agreement with the IMF.

Krstic explained that technical discussions had begun Wednesday, February 26, in Belgrade and that Monday, March 3, would see the start of official discussions at a plenary session that would be held at the National Bank of Serbia (NBS).

- Serbia will have to conclude a new three-year arrangement with the IMF and pledge carrying out a certain strategy in that term - the finance minister said and added that the future government would behave responsibly as it would have to take even some unpopular measures that would probably be agreed with the IMF, such as solidarity tax.

Also, as the finance minister announced, the state would have to adopt systemic legislation to limit salaries in the public sector.

Nikola Altiparmakov, a member of Serbia’s Fiscal Council, said that Serbia’s public debt had gone over EUR 20 billion, or about 65 percent of the country’s gross domestic product (GDP), adding that Serbia's budget deficit of about seven percent of GDP was one of the biggest in Europe. Altiparmakov said that the talks with the IMF would therefore focus on the path of public debt and measures to be taken, but also on pension fund reforms as Serbia allocates EUR 4.5 billion from the budget for pensions every year, and the population is only getting older.

The last arrangement between Serbia and the IMF was concluded in late September 2011, and it was frozen already in February 2012 because the budget for that year did not match the agreed fiscal program.