World Bank official: Serbia has 9 months for reforms

World Bank official: Serbia has 9 months for reforms

If the reforms are not conducted in that time, no one will believe anymore that they will happen at all, he stressed.

It is very dangers to lose political credibility, he stated, adding that if the government agreed on a program with the World Bank and the IMF and then failed to implement it within nine months, he would not be able defend the country before World Bank directors.

The reform of the pension system in Serbia requires deeper analysis that has not been completed yet, and the World Bank did not advise Serbia to reduce salaries across the public sector, but to remove abuses within the system, he noted.

The baseline for those salaries, of which there are now 8, should be equalized so that all those who do one type of job get the same salary, he explained.

There are no funds in the 2014 budget that were planned to be used on subsidies for companies undergoing restructuring, but those companies are still an expense for the government because they do not pay taxes, so the funds are paid from the budget, Verheijen remarked.

However, the budget does have funds set aside for severance pays in case those companies go bankrupt, so it is important to settle that issue as soon as possible, before the money is used for something else, he pointed out.

It is unavoidable that 70-80 percent of the companies in restructuring go bankrupt, but that is not the end of the world, since many of them own valuable buildings, land and other property, he remarked.

For that property to be used efficiently, the obligations towards the employees and creditors have to be covered, so the new owner would have a clear situation, Verheijen stated, adding that the transition fund within the state budget had the task of settling those debts.

He said he did not know the origin of the claims that 100,000 people needed to leave the public sector, explaining that the 153 companies in restructuring had 30,000 employees, and that they were not all expected to lose their jobs.

A new law on planning and construction is necessary to solve the problem with restructuring companies, he said, adding that the law would have to simplify the procedure for gaining construction permits, since investors would not be able to create new jobs without that.