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“Successful negotiations with IMF”

The talks concerned the fourth revision of a stand-by deal worth a total of EIR 2.9bn. Bajec pointed out that the agreement and the IMF’s positive report were certainly one of the factors which halted a further drop in the value of the dinar. Freezing public sector salaries and pensions and setting aside money for social benefits for most vulnerable citizens is at this time “still better than unfreezing of salaries”, the economist thinks. “This way the government will have enough funds to launch infrastructure projects which can initiate development and growth of the entire economy,” he said. “There’s enough time to send a draft law on the pension system changes to parliament by June, where most of more stringent conditions for retirement will be specified and at the same time a new formula and way the pensions will be unfrozen from 2011 will be defined,” Bajec said. He repeated that the draft was ready and that this item in the agreements was only a legal guarantee to the IMF that Serbia would meet its obligations. “The (IMF) visit was very positively characterized in the public, and the business public too, because the sliding of the dinar has been stopped. It is a consequence of powerful interventions of the NBS (National Bank of Serbia), but also an agreement reached with the IMF represents a wider guarantee that you’re conducting the policy you agreed on,” Bajec was quoted as saying. Serbia has been very disciplined at withstanding the policy of frozen pensions and salaries in the public sector for two years which is an indicator if its seriousness, the PM’s advisor stressed and added that the government should now send a letter about its intentions to the IMF, formally accepting the already assumed obligations when it came to the most sensitive issues. IMF official warns Head of IMF office in Belgrade Bogdan Lissovolik stated on Thursday evening that if Serbia does not observe the agreement with this financial institution, the revision of the arrangement with the IMF will not be completed during this IMF's mission. “Based on our experience with Serbia, we are convinced that the measures will be technically implemented,” Lissovolik told B92 TV. “These measures are not difficult. In the worst case scenario, that is if the previously agreed measures are not implemented, the process is clear - we cannot complete the revision, but we will try to complete it until the next IMF's mission.” Head of IMF Mission to Serbia Albert Jaeger has previously told the journalists that these measures envisage that the Serbian government should bring the bill on pension system reform before parliament and reduce the number of employees in public administration. Lissovolik said that the next IMF mission, which will arrive in three months, will try to complete the fourth and fifth revision, adding that Serbia has reached an agreement with IMF regarding the pension indexation. He also reiterated the request for the reduction of public administration by ten percent, pointing out that this is a challenging measure and that its implementation has been postponed. Source: B92, Tanjug