VUCKOVIC: Five more years before salaries of EUR 500

Fiscal stabilization is a necessary, but not sufficient requirement for a better life, stated Vladimir Vuckovic, a candidate for a membership in the Fiscal Council, adding that, if the economic growth in the coming period amounts to around 4%, the average salary of EUR 500 will be reached in five years only.

– From the start, fiscal consolidation should not have been expected to solve all our problems. More years need to pass for this to reflect on the citizen's finances. Serious economists never said anything of the sort – Vuckovic said in his interview for Politika.

According to him, the problem is created by politicians who, in order to justify hard measures, suggest that the exit is “right around the corner” or deny that responsible and hard measure are necessary.

Commenting on the fact that the current president had announced that the level of EUR 500 would be reached in 2017, Vuckovic said that it was problematic to promise something and give it a date, forcing politicians to “make moves outside a rational and good economic practice to the end of reaching those results by taking shortcuts”.

When asked what the economically rational salary and pension raises would amount to, Vuckovic said that linear raises should no longer be a topic of discussion.

– It's time to see who needs to be awarded more, and who needs to awarded less. The administration did not have salary raises in the previous two instances, and these are people who run the state. It's time to think about them as well – he pointed out.

Vuckovic believes that a new arrangement with the International Monetary Fund was needed, as the periods in which there was no arrangement always led to worsening conditions.

When asked whether, in the Fiat Kragujevac case, the state defended the interests of its business partner more than those of the workers, he said that all the statements pointed to a calming down of the situation.

– I have not seen them side with the investor directly. The state has invested a lot in this project and it would be strange if it pulled out now – he said.

Vuckovic didn't want to answer the question of who the biggest culprits for the state of Serbia's public finances were, “as no one person can be blamed for a decision made by the government and the national assembly”.

– The EUR 400 million of the new annual expenditures is the biggest bomb dropped in the system in 2008, creating the biggest problems. The effect was worsened by the fiscal decentralization of 2011, the losses of big state companies, and than the refusal to undertake stricter measures as soon as 2012 – Vuckovic said.

He says that we are no longer in the zone of the public debt crisis, where we were three-four years ago and that the budget deficit is no longer in the range of five to six, but in the range of zero to one percent.

– The situation is better. It was very turbulent in 2011, when we started operating. All the way until late 2014, the problem was so big that we were forced to propose strict and unpopular measure. In early 2015, the public finances started being improved, but new risks are discovered all the time – Vucovic said.

Fiskalni savet Republike Srbije

Međunarodni monetarni fond-MMF Beograd

FCA Srbija Kragujevac

Vladimir Vuckovic

fiscal consolidation

economic growth of Serbia

average salary

salary and pension raises

International Monetary Fund

IMF

Fiat

public debt of Serbia

budget deficit

public finances