DINKIC: New government either has to run into debts or there will be no funds for salaries and pensions

(Mladjan Dinkic)

On Monday, July 23, 2012, candidate for the Minister of Finance and Economy, Mladjan Dinkic, said that in the first couple of months, new government of Serbia would have to run into debts because there was funds for salaries and pensions only till the end of August.

The United Region of Serbia leader said to journalists in the Assembly of Serbia that there would be no decrease or freeze in salaries and pensions and that he would, if elected a minister, in August, provide funds for regular payments.

- We will also talk with the Russian Federation to convert a portion of loan (of 800 million dollars) approved for Zeleznica into budget support. We are receiving signals that a portion of couple of hundreds of million dollars will be converted into budget support – Dinkic said.

New government will invite, he pointed out, both the World Bank and the International Monetary Fund (IMF) to continue talks.

Serbia will ask for a package change with IMF which, as he estimated, was not well-agreed and ask from IMF to direct a portion of funds to budget.

- The first thing I will do will be the analysis of condition in the governmental budget although there are already doubts it is catastrophic – Dinkic pointed out, adding that after that he would do analysis of expenditures, i.e. analysis on which agencies and funds can be cancelled.

"The analysis will be done in the first couple of months of the government operations ", he said.

Dinkic said that the program of anti-crisis measures for trade would have to be created in order to propose to the Assembly budget rebalance and fiscal consolidation program during September.

The first significant budget decrease can be felt no sooner than next year because 2012, as Dinkic said, failed.

Candidate for the Minister of Finance and Economy in the new Serbian government said that in September, some 12 laws would be proposed, such as law on professional of public companies management, cancellation of unnecessary agencies and public institutions, amendments to the law on budget system and VAT law.

Dinkic, who took part in the work of the leaving government of Serbia, as the Minster of economy as of its constitution in July 2008 till March 2011, said that the Democratic Party had been running public finance for six years and made record budget deficit of over seven per cent of GDP.

- I will prove deficit can decrease to below three percent of gross domestic product (GDP), i.e. the European standard – Dinkic said.