Vucic's austerity plan for Serbia calls for sacrifice

15/05/2014

A smaller public sector workforce and salary cuts are in the works to get Serbia's economy back on track.

By Bojana Milovanovic for Southeast European Times in Belgrade -- 15/05/14

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"I ask that in the coming period you understand well how much we need these difficult measures," Serbia Prime Minister Aleksandar Vucic said recently of proposed budget cuts.

Prime Minister Aleksandar Vucic said cuts in Serbia's public sector will be one of the new government's first measures to drive the economy in line with EU standards.

"I ask that in the coming period you understand well how much we need these difficult measures, because we have a budget deficit of 1.4 billion euros. So just think how much saving we have to do. And we'll strive to save everywhere. We'll all be affected," Vucic said.

Plans include a smaller public sector workforce and a salary cut of about 10 percent for those remaining in state service. Travel expenses will be reduced for public service employees and executive cars won't be as readily available.

Vucic said the public sector is living at the private sector's expense. Private sector salaries are as much as 30 percent lower, a situation he described as unsustainable.

Ljubomir Savic, a Belgrade Faculty of Economics professor, said austerity measures are necessary.

"Serbia is a wasteful country. Even if there were no global economic crisis, we would need austerity measures," Savic told SETimes.

But unions in the country oppose the measures. They want the government to implement other cuts before reducing salaries.

"The employed are being asked to work more for smaller salaries. Even with their current earnings, people can barely survive and we are being asked to take on the entire burden while politicians give up nothing," Ljubisa Orbovic, head of the Confederation of Autonomous Trade Unions of Serbia, said in a statement to SETimes.

Some citizens also expressed concern.

"My salary is around 300 euros and my monthly bills are around 150 euros. I really don't know how it is possible to survive until the end of the month," Milan Jarić, a clerk in the Belgrade municipality of Vračar, told SETimes. "We have to react to this. I know that we need saving measures, but this is too much."

According to Savic, it is important to determine to what extent the state should resort to saving.

"Saving is necessary in public administration, where many have gotten jobs and settled in over the past several years, and the Serbian economy, such as it is, can no longer bear that," Savic said.

The government should be cautious with savings in public sectors such as health care and education, he added.

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"If the conditions are not satisfactory, many experts will seek a solution in the private sector or abroad, which is not good for the state," Savic said.

He said it will take more than just savings for Serbia's economy to recover.

"There is no progress without economic development, no matter how much we save," Savic said, adding that Serbia needs production growth of at least 5 percent to see any improvement.

What measures could Serbia implement to help save money? Share your thoughts in the comments section.

This content was commissioned for SETimes.com.
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