Parliament approves 2010 budget

The Serbian parliament has today adopted the country's draft budget and accompanying laws for next year. 127 MPs voted in favor of the bill. A minimum of 126 was needed in order for the legislation to pass. Parliament approves 2010 budget The draft sent to MPs by the government envisaged a deficit of some EUR 1.12bn, with income amounting to EUR 6.84bn and spending worth EUR 7.96bn. As four Alliance of Vojvodina Hungarians (SVM) MPs announced they would vote against the draft, it was uncertain even this morning whether the ruling coalition would manage to scrape together the necessary number of votes to approve the budget. But reports from parliament today said that two independent MPs, and Riza Halimi, who represents ethnic Albanians from southern Serbia, came to the rescue of the 124 ruling coalition MPs. Also today, the Board of Directors of the International Monetary Fund (IMF) was set to discuss a revision of its loan arrangement with Serbia, but that meeting was postponed. According to a recent statement from the Governor of the National Bank of Serbia Radovan Jelasic, the budget must be adopted today so the IMF Board of Directors could discuss its arrangement with Serbia. "If we miss this chance the IMF will decide about the loan arrangement in late January," Jelasic was quoted as saying. However, Professor at the Faculty of Economy and an adviser to the prime minister Milojko Arsic says that all conditions were met for the IMF to approve the deal once the budget was adopted by the government and sent to parliament. Therefore he believes that this international financial institution will confirm its arrangement with Serbia today. “This means that the fiscal policy would have to be in accordance with the arrangement. If the budget were not to be adopted for some reason, it would have to be adopted by a reasonable deadline in order to meet the basic elements of the IMF agreement,” he stated. The key issues, such as RSD 107bn deficit and estimates that the GDP will rise by 1.5 percent, have already been agreed with the IMF. Although there has been a dispute regarding pensions, which constitute for the largest item on the budget's expenditures list, the agreement was agreed upon without the need to increase the VAT rate in 2010. “Officials have different opinions about it now. I think that there is no need for Serbia to withdraw additional money [from the IMF loan]. The level of Serbia’s foreign currency reserves is relatively high and every additional withdrawal would increase the already high level of the country’s foreign debt,” Arsic warned. The stand-by arrangement with the IMF is worth USD 2.9bn, and Serbia has withdrawn about EUR 778mn so far. That money was intended solely for the country’s hard currency reserves. The Serbian parliament (FoNet, file)

Parliament approves 2010 budget

The draft sent to MPs by the government envisaged a deficit of some EUR 1.12bn, with income amounting to EUR 6.84bn and spending worth EUR 7.96bn.

As four Alliance of Vojvodina Hungarians (SVM) MPs announced they would vote against the draft, it was uncertain even this morning whether the ruling coalition would manage to scrape together the necessary number of votes to approve the budget.

But reports from parliament today said that two independent MPs, and Riza Halimi, who represents ethnic Albanians from southern Serbia, came to the rescue of the 124 ruling coalition MPs.

Also today, the Board of Directors of the International Monetary Fund (IMF) was set to discuss a revision of its loan arrangement with Serbia, but that meeting was postponed.

According to a recent statement from the Governor of the National Bank of Serbia Radovan Jelašić, the budget must be adopted today so the IMF Board of Directors could discuss its arrangement with Serbia.

"If we miss this chance the IMF will decide about the loan arrangement in late January," Jelašić was quoted as saying.

However, Professor at the Faculty of Economy and an adviser to the prime minister Milojko Arsić says that all conditions were met for the IMF to approve the deal once the budget was adopted by the government and sent to parliament.

Therefore he believes that this international financial institution will confirm its arrangement with Serbia today.

“This means that the fiscal policy would have to be in accordance with the arrangement. If the budget were not to be adopted for some reason, it would have to be adopted by a reasonable deadline in order to meet the basic elements of the IMF agreement,” he stated.

The key issues, such as RSD 107bn deficit and estimates that the GDP will rise by 1.5 percent, have already been agreed with the IMF.

Although there has been a dispute regarding pensions, which constitute for the largest item on the budget's expenditures list, the agreement was agreed upon without the need to increase the VAT rate in 2010.

“Officials have different opinions about it now. I think that there is no need for Serbia to withdraw additional money [from the IMF loan]. The level of Serbia’s foreign currency reserves is relatively high and every additional withdrawal would increase the already high level of the country’s foreign debt,” Arsić warned.

The stand-by arrangement with the IMF is worth USD 2.9bn, and Serbia has withdrawn about EUR 778mn so far.

That money was intended solely for the country’s hard currency reserves.