Debate on amendments to draft state budget for 2013

BELGRADE The Serbian parliament concluded the debate on the draft budget on Monday, according to which the deficit totals RSD 121.9 billion or 3.3 percent of the GDP. MPs will start the debate on the amendments to the bill on Tuesday. Debate on amendments to draft state budget for 2013 On Monday, Serbian Minister of Finance and Economy Mladjan Dinkic said that the government would be able to go into debt next year at an interest rate of less than five percent annually, and added that he is dissatisfied with the fact that Serbia's latest loan came with the interest rate of 5.5 percent. He underscored that Serbia would be powerful only when it becomes able to take out loans at the interest rate of 3.5 percent. The minister said that he is aware of the fact that the GDP growth of two percent envisaged for 2013 is not a big achievement. Still, he noted that the revenues would increase since the law on conditional write-off of interest on arrears, which is being prepared, would reinforce the charge rate of current dues in the next period. Serbia had a problem with the lack of financial discipline and a lot of time was lost in needless discussions, and the proposed budget is not a guarantee that Serbia will go through a business turnover, Dinkic said and added that this point just serves as a basis for a new economic policy. (Beta) Monday's debate IIn the continuation of the Serbian parliament's debate on the draft budget for 2013 Monday, MPs of the ruling coalition said that the coming year's budget projections would reduce the deficit, public debt and restrictions in public expenditures. The opposition, however, criticized the draft document, claiming that it would need to be revised as early as in the spring of 2013. Zoran Kasalovic of the ruling Socialist Party of Serbia (SPS) pointed out that the budget proposal was the first step towards stopping the public debt in the medium term. “This budget shows the outlines of the government's medium-term policy, and that is a balanced budget by 2016,” Kasalovic said, pointing out that the main challenge would be implementing the plans. Momo Colakovic of the ruling Party of United Pensioners of Serbia (PUPS) said that the party would support the budget proposal because the document provided for the reduction of public debt and for public expenditure restrictions, but also for payment of all 12 pensions in 2013, of a 13th pension in two installments, and of all of social security benefits. Representative of the opposition Democratic Party (DS) Bozidar Djelic is of the opinion that the government itself does not believe in its own budget and that it will have to be revised in the spring next year. He pointed out that the government had failed in reaching an arrangement with the International Monetary Fund (IMF) as the proposed budget did not meet the recommendations. “How does the government plan to accomplish that in the spring if not with a revised budget?” wonders Djelic. Another DS deputy, Borislav Stefanovic, said that with the document at hand, Serbia would get a fundamentally unrealistic budget, which would further increase unemployment and the country's debts and threaten the citizens' standard of living. Bojan Djuric of the opposition Liberal Democratic Party (LDP) said that the government's budget proposal was untenable and that in 2013, due to the proposed increase in excise and other taxes, all who worked in the state sector or received pensions would see their real income go down by about 10 percent against the current year. Djuric said the government's policy shortcomings would burden the private sector even further, which would likely cause new layoffs. He added that the current government was incurring debts at almost the same pace as the previous one, admitting, though, that the interest rates on the new loans were more favorable. MPs of the opposition Democratic Party of Serbia (DSS) filed over 60 amendments to the document and announced that they would not support the budget proposal since they believed that the country needed to undergo a radical reform. “The current government continues pursuing a debt-incurring policy just like the previous one, which can only lead to a debt slavery situation,” said DSS deputy Radojko Obradovic. He criticized the practice of “subsidizing liquidity and subsidizing job creation,” adding that serious measures should be taken to reform the public sector in 2013. The proposal for the 2013 budget envisages a deficit of RSD 121.9 billion in the state coffers, or 3.3 percent of gross domestic product. The government drafted the budget document based on a two percent GDP growth and 5.5 percent inflation forecast. Tanjug

Debate on amendments to draft state budget for 2013

On Monday, Serbian Minister of Finance and Economy Mlađan Dinkić said that the government would be able to go into debt next year at an interest rate of less than five percent annually, and added that he is dissatisfied with the fact that Serbia's latest loan came with the interest rate of 5.5 percent.

He underscored that Serbia would be powerful only when it becomes able to take out loans at the interest rate of 3.5 percent.

The minister said that he is aware of the fact that the GDP growth of two percent envisaged for 2013 is not a big achievement.

Still, he noted that the revenues would increase since the law on conditional write-off of interest on arrears, which is being prepared, would reinforce the charge rate of current dues in the next period.

Serbia had a problem with the lack of financial discipline and a lot of time was lost in needless discussions, and the proposed budget is not a guarantee that Serbia will go through a business turnover, Dinkić said and added that this point just serves as a basis for a new economic policy.

Monday's debate

IIn the continuation of the Serbian parliament's debate on the draft budget for 2013 Monday, MPs of the ruling coalition said that the coming year's budget projections would reduce the deficit, public debt and restrictions in public expenditures.

The opposition, however, criticized the draft document, claiming that it would need to be revised as early as in the spring of 2013.

Zoran Kasalović of the ruling Socialist Party of Serbia (SPS) pointed out that the budget proposal was the first step towards stopping the public debt in the medium term.

“This budget shows the outlines of the government's medium-term policy, and that is a balanced budget by 2016,” Kasalović said, pointing out that the main challenge would be implementing the plans.

Momo Čolaković of the ruling Party of United Pensioners of Serbia (PUPS) said that the party would support the budget proposal because the document provided for the reduction of public debt and for public expenditure restrictions, but also for payment of all 12 pensions in 2013, of a 13th pension in two installments, and of all of social security benefits.

Representative of the opposition Democratic Party (DS) Božidar Đelić is of the opinion that the government itself does not believe in its own budget and that it will have to be revised in the spring next year.

He pointed out that the government had failed in reaching an arrangement with the International Monetary Fund (IMF) as the proposed budget did not meet the recommendations. “How does the government plan to accomplish that in the spring if not with a revised budget?” wonders Đelić.

Another DS deputy, Borislav Stefanović, said that with the document at hand, Serbia would get a fundamentally unrealistic budget, which would further increase unemployment and the country's debts and threaten the citizens' standard of living.

Bojan Đurić of the opposition Liberal Democratic Party (LDP) said that the government's budget proposal was untenable and that in 2013, due to the proposed increase in excise and other taxes, all who worked in the state sector or received pensions would see their real income go down by about 10 percent against the current year.

Đurić said the government's policy shortcomings would burden the private sector even further, which would likely cause new layoffs.

He added that the current government was incurring debts at almost the same pace as the previous one, admitting, though, that the interest rates on the new loans were more favorable.

MPs of the opposition Democratic Party of Serbia (DSS) filed over 60 amendments to the document and announced that they would not support the budget proposal since they believed that the country needed to undergo a radical reform.

“The current government continues pursuing a debt-incurring policy just like the previous one, which can only lead to a debt slavery situation,” said DSS deputy Radojko Obradović.

He criticized the practice of “subsidizing liquidity and subsidizing job creation,” adding that serious measures should be taken to reform the public sector in 2013.

The proposal for the 2013 budget envisages a deficit of RSD 121.9 billion in the state coffers, or 3.3 percent of gross domestic product.

The government drafted the budget document based on a two percent GDP growth and 5.5 percent inflation forecast.