World Bank representative warns against reform delays

World Bank Country Manager for Serbia Loup Brefort has said that a delay in reforms poses a threat to the national treasury. Brefort told state broadcaster RTS late on Sunday that the rise in Serbia's public debt is highly dangerous, and compared the state of the Serbian economy with "high cholesterol level in the human body". World Bank representative warns against reform delays A high level of cholesterol is a serious condition that might eventually lead to death. In order to solve that, you need serious and painful measures and treatments. Serbia's public debt is far beyond a safe cholesterol level, Brefort said. Serbia has had a high budget deficit for decades, and that is the reason for such a large public debt, he noted. The government's target for 2012 was the deficit of 4.25 percent (of GDP), but the Fiscal Council delivered an estimate that the deficit would reach 6 percent by the year's end, and even 7 percent unless the government did something about that, Brefort said. "If you have a budget deficit of 4.25 percent, that means that you have to borrow nearly EUR 2 billion on an annual level to cover the deficit. If Serbia's deficit reaches seven percent, which is highly likely, and if the new government does not introduce effective measures for tackling the deficit, Serbia will have to borrow EUR 3.5 billion for 2012," he warned. A delay in reforms could turn into serious problems for public finances, and Serbia could really find itself in a situation that it will have to pay a lot, much more than it is paying now to cover the budget deficit, Brefort underlined. Loup Brefort (file) RTS Tanjug

World Bank representative warns against reform delays

A high level of cholesterol is a serious condition that might eventually lead to death. In order to solve that, you need serious and painful measures and treatments. Serbia's public debt is far beyond a safe cholesterol level, Brefort said.

Serbia has had a high budget deficit for decades, and that is the reason for such a large public debt, he noted.

The government's target for 2012 was the deficit of 4.25 percent (of GDP), but the Fiscal Council delivered an estimate that the deficit would reach 6 percent by the year's end, and even 7 percent unless the government did something about that, Brefort said.

"If you have a budget deficit of 4.25 percent, that means that you have to borrow nearly EUR 2 billion on an annual level to cover the deficit. If Serbia's deficit reaches seven percent, which is highly likely, and if the new government does not introduce effective measures for tackling the deficit, Serbia will have to borrow EUR 3.5 billion for 2012," he warned.

A delay in reforms could turn into serious problems for public finances, and Serbia could really find itself in a situation that it will have to pay a lot, much more than it is paying now to cover the budget deficit, Brefort underlined.