Fiscal Council wants salaries kept frozen for 3 more years

Fiscal Council wants salaries kept frozen for 3 more years

"But 3.7 percent is still a large deficit that does not secure recovery," Petrovic told a press conference.

He also pointed out that the three-year government plan contains no credible measures that would reduce this deficit in order to reduce the public debt.

"When it comes to laying off 75,000 people over three years - this is an unrealistic measure which has already been demonstrated with what has been done so far, so this measure will not bring success," he said.

According to Petrovic, it is necessary to keep salaries and pensions "under control, that is, frozen" in order to move toward the recovery of the economy in the next three years, "as this is now the only concrete austerity measure."

Petrovic added that reforms of public enterprises had barely begun in 2015, when "something was done only when it comes to (Serbian) Railways, while EPS and Srbijagas remain a problem."

"When it comes to companies in the restructuring process, only a third of the problem has been solved, according to our assessment," the president of the Fiscal Council - an independent state body reporting to the National Assembly - observed.

Petrovic said that "the problem of EPS and Srbijagas" - i.e., Serbia's public electricity and natural gas enterprises - must be "faced and solved first."

Regarding privatizations, Petrovic believes there is no reason "for delaying a solution for companies such as Zelezara (steel plant)."

"There are 55,000 workers in these troubled companies, postponing these problems creates a deficit in some other means. Maybe the fate of 35,000 of these 55,000 can be solved this year," said he.

Petrovic does not believe that a solution will be found this year for Zelezara and copper mines and smelter RTB Bor, noting that in the case of Srbijagas, "not even what is the least painful has been done."

"Railways is a somewhat brighter spot. It is a big problem but a professionally good plan has been made and its implementation is now starting," he said.

As for the reduction of subsidies, Petrovic said this measure was not well prepared, and mentioned "subsidies for the public service" as an example, noting it was "not known if those (subsidies) will be enough."