"Serbia EU member in 5, 6 years"

Enough with this nonsense! Serbia needs a partner for prosperity now and not in 5 to 6 years. Sooner or later the people of Serbia who aspired to join the EU will get fed up and turn to Russia, hopefully sooner rather than later, too much time has already been wasted.

Two good things can be said about this, firstly the EU will be in a poor state in 5 or 6 years time and secondly we will get another election to stop this nonsense once and for all.

Canadian you are correct on this point, Serbia should be rewarded for progress made. There should be stages Serbia can go through and as each one is completed it gets rewarded. This will encourage Serbs.

I dont know anything about the Serbian voting system but if there is what we call in the UK a general election in that 5-6 year time and Europe has not delivered anything then there could be a swing towards Russia.

I am fully behind Serbia in Europe along with it province of Kosovo

Why doesn't anyone ask French Abassador Terral to qualify his meaning of Serbia ? Especially given his country's total disregard for Serbia's Soverignty and international norms and laws regarding territorial integrity!!!

Come Terreal is Soverign and integral Serbia in 5/6 years for are you of the same persuasion as your northern neighbours in Belguim where FM De Grucht was quite explict???

"“My understanding is that we’ve only signed the agreement with Serbia itself, without Kosovo,” said De Gucht. " http://www.b92.net/eng/news/politics-article.php?yyyy=2008&mm=05&dd=06&nav_id=49994

On another point;

""Serbian exporters are having difficulties because of the lack of coordination between Serbian and EU regulations, said Deputy Finance Minister Igor Brković.

Brković pointed out that 60 percent of Serbia’s trade was conducted with the EU, adding that 30 percent of Serbian trade laws needed to be eliminated. ""

- surely Brkovic is not suggesting a level as high as 60% of all trade is with the EU equates to poor lack of coordination ?

If that were the case then we would see a number far below that of 60% - surely he can't be so inept to comprehend that trade laws are not a pro-EU issue but one of Serbia's trade globally irrespective of EU memebrship or not?

What is hurting Serbia's exporters and business today is not just legislation but a high Dinar value created by investment speculation which has not positive effect for Serbia's SME's but all to gain for the western investors who will eep the profits out of Serbia.

Under what condition(s)?
There are way to many variables to this equation for it to be certain: Lisbon, Irish vote, Den Haag, Kosovo, East-West confrontation, slowing world economy etc…
I am not buying this.
Rather, I see it as ,yet another ,(distant) dangling promissory (yet not binding by any means) note.

oh now its 5 to 6 years first its next year blah blah blah just lies.

Its not very interesting really, this is non news I think.

Princip you should leave economy to the economists. The reason why the dinar is overvalued is not due to speculation. Its due to the Serbian government's base rate of over 15%. They are doing this for one primary reason - to keep inflation down.

The interest rate has been unchanged for quite a long time now, it was also the policy of the DSS government. It is harmful to exporters and makes imported goods artificially cheap for the powerful import lobby who fund most political parties in Serbia.

With friends like these...

" "Serbia is the most significant country in the region because of its geographic position and its economic potential"

just one of the reasaons why Serbia will prevail in regard to the Kosovo-issue.

it doesn´t matter if Obama or McCain "wins"... it is inevitable.

let´s just see what future brings.

Jan two answers to your question - although there are more.

First, when you go to the shops and see the price of something which you consider expensive, do you say that it is exactly the value it should be as people are willing to pay for it? Ask people in Serbia what they think and they will tell you - even though they are paid in dinars and will benefit from a strong dinar, they will tell you that the Euro is artificially weak. For example yesterday when the Euro gained against almost all world currencies it still lost against the dinar. Something is not right.

Second, there is a crucial difference between the dinar and many other world currencies which are subject to demand and supply - the dinar is not available for exchange in world markets. It can only be exchanged in Serbia and it is the Serbian banks that have major influence, rather than the public. Quite literally the banks can set the price of the dinar and on the basis of the very high interest rates set by the central bank they decide to keep dinars ensuring themselves a tidy profit.

I'm paid in dinars and euros but I know an inflated dinar when I see it.

Speculation is not the reason for a high dinar for the second reason I gave, there are no speculators.

Bganon - the economist

"Speculation is not the reason for a high dinar for the second reason I gave, there are no speculators"

- really but earlier you suggested;

"It is harmful to exporters and makes imported goods artificially cheap for the powerful import lobby who fund most political parties in Serbia. "

- really so I guess the "powerful import lobby" and lets not forget external players are not speculators - maybe your right a better term would be profiteers perhaps?

Oh by the way just because the Dinar is not traded widely does not mean its not available in the world markets - I know many a trader willing to consider even the most obscure of currencies - and the Dinar is very far from obscure!

Beyond which what you suggest (i.e. that its not traded) would imply the governemnt of the day have full control of supply and demand of the Dinar and thus setting interest rates would have no effect what so ever with regards actual price and inflation! The setting of interest rates in control of money supply and thus inflation implies a fully tradable currency - so what is it to be Bganon the economist?

No doubt your not seeing the euro going far in the cafes of Belgrade?

On 23 September 2008 19:43, bganon wrote:

"Princip you should leave economy to the economists."

Indeed.

bganon: "The reason why the dinar is overvalued is not due to speculation."

Okay - I am not an economist, so I have to ask: How can something be overvalued? Isn't everything valued exactly like it should be? True, something may not retain its value forever, but RIGHT NOW, isn't everything, including the dinar valued EXACTLY what people are willing to pay for it? So how can it be overvalued?

So, whatever the reason that is behind the valuation of the dinar, it seems like it is an internal Serbian affair and a choice between pest and cholera:

Over-valued => Cheap imports, less risk of inflation due to higher prices on energy imports, expensive exports, higher unemployment, ...

Under-valued => Expensive imports, higher pricing, more inflation, angry pensioners...

oh now its 5 to 6 years first its next year blah blah blah just lies.

Two good things can be said about this, firstly the EU will be in a poor state in 5 or 6 years time and secondly we will get another election to stop this nonsense once and for all.

Canadian you are correct on this point, Serbia should be rewarded for progress made. There should be stages Serbia can go through and as each one is completed it gets rewarded. This will encourage Serbs.

I dont know anything about the Serbian voting system but if there is what we call in the UK a general election in that 5-6 year time and Europe has not delivered anything then there could be a swing towards Russia.

I am fully behind Serbia in Europe along with it province of Kosovo

Why doesn't anyone ask French Abassador Terral to qualify his meaning of Serbia ? Especially given his country's total disregard for Serbia's Soverignty and international norms and laws regarding territorial integrity!!!

Come Terreal is Soverign and integral Serbia in 5/6 years for are you of the same persuasion as your northern neighbours in Belguim where FM De Grucht was quite explict???

"“My understanding is that we’ve only signed the agreement with Serbia itself, without Kosovo,” said De Gucht. " http://www.b92.net/eng/news/politics-article.php?yyyy=2008&mm=05&dd=06&nav_id=49994

On another point;

""Serbian exporters are having difficulties because of the lack of coordination between Serbian and EU regulations, said Deputy Finance Minister Igor Brković.

Brković pointed out that 60 percent of Serbia’s trade was conducted with the EU, adding that 30 percent of Serbian trade laws needed to be eliminated. ""

- surely Brkovic is not suggesting a level as high as 60% of all trade is with the EU equates to poor lack of coordination ?

If that were the case then we would see a number far below that of 60% - surely he can't be so inept to comprehend that trade laws are not a pro-EU issue but one of Serbia's trade globally irrespective of EU memebrship or not?

What is hurting Serbia's exporters and business today is not just legislation but a high Dinar value created by investment speculation which has not positive effect for Serbia's SME's but all to gain for the western investors who will eep the profits out of Serbia.

Enough with this nonsense! Serbia needs a partner for prosperity now and not in 5 to 6 years. Sooner or later the people of Serbia who aspired to join the EU will get fed up and turn to Russia, hopefully sooner rather than later, too much time has already been wasted.

Its not very interesting really, this is non news I think.

Princip you should leave economy to the economists. The reason why the dinar is overvalued is not due to speculation. Its due to the Serbian government's base rate of over 15%. They are doing this for one primary reason - to keep inflation down.

The interest rate has been unchanged for quite a long time now, it was also the policy of the DSS government. It is harmful to exporters and makes imported goods artificially cheap for the powerful import lobby who fund most political parties in Serbia.

With friends like these...

Under what condition(s)?
There are way to many variables to this equation for it to be certain: Lisbon, Irish vote, Den Haag, Kosovo, East-West confrontation, slowing world economy etc…
I am not buying this.
Rather, I see it as ,yet another ,(distant) dangling promissory (yet not binding by any means) note.

" "Serbia is the most significant country in the region because of its geographic position and its economic potential"

just one of the reasaons why Serbia will prevail in regard to the Kosovo-issue.

it doesn´t matter if Obama or McCain "wins"... it is inevitable.

let´s just see what future brings.

On 23 September 2008 19:43, bganon wrote:

"Princip you should leave economy to the economists."

Indeed.

bganon: "The reason why the dinar is overvalued is not due to speculation."

Okay - I am not an economist, so I have to ask: How can something be overvalued? Isn't everything valued exactly like it should be? True, something may not retain its value forever, but RIGHT NOW, isn't everything, including the dinar valued EXACTLY what people are willing to pay for it? So how can it be overvalued?

Jan two answers to your question - although there are more.

First, when you go to the shops and see the price of something which you consider expensive, do you say that it is exactly the value it should be as people are willing to pay for it? Ask people in Serbia what they think and they will tell you - even though they are paid in dinars and will benefit from a strong dinar, they will tell you that the Euro is artificially weak. For example yesterday when the Euro gained against almost all world currencies it still lost against the dinar. Something is not right.

Second, there is a crucial difference between the dinar and many other world currencies which are subject to demand and supply - the dinar is not available for exchange in world markets. It can only be exchanged in Serbia and it is the Serbian banks that have major influence, rather than the public. Quite literally the banks can set the price of the dinar and on the basis of the very high interest rates set by the central bank they decide to keep dinars ensuring themselves a tidy profit.

I'm paid in dinars and euros but I know an inflated dinar when I see it.

Speculation is not the reason for a high dinar for the second reason I gave, there are no speculators.

Bganon - the economist

"Speculation is not the reason for a high dinar for the second reason I gave, there are no speculators"

- really but earlier you suggested;

"It is harmful to exporters and makes imported goods artificially cheap for the powerful import lobby who fund most political parties in Serbia. "

- really so I guess the "powerful import lobby" and lets not forget external players are not speculators - maybe your right a better term would be profiteers perhaps?

Oh by the way just because the Dinar is not traded widely does not mean its not available in the world markets - I know many a trader willing to consider even the most obscure of currencies - and the Dinar is very far from obscure!

Beyond which what you suggest (i.e. that its not traded) would imply the governemnt of the day have full control of supply and demand of the Dinar and thus setting interest rates would have no effect what so ever with regards actual price and inflation! The setting of interest rates in control of money supply and thus inflation implies a fully tradable currency - so what is it to be Bganon the economist?

No doubt your not seeing the euro going far in the cafes of Belgrade?

So, whatever the reason that is behind the valuation of the dinar, it seems like it is an internal Serbian affair and a choice between pest and cholera:

Over-valued => Cheap imports, less risk of inflation due to higher prices on energy imports, expensive exports, higher unemployment, ...

Under-valued => Expensive imports, higher pricing, more inflation, angry pensioners...