Serbia will have to lay off about a fifth of its public sector -- 14,000 employees -- to meet conditions set by the International Monetary Fund to receive more financial aid, an official said Monday. Serbia's Finance Minister Diana Dragutinovic said it is planning cost cuts before the government resumes its talks with the IMF on Oct. 20.
The IMF has postponed giving the Balkan country access to additional funds from a €2.8 billion ($4.08 billion) standby loan granted in March, demanding details on how Serbia plans to finance its growing budget deficit amid the financial crisis. The IMF had proposed an increase of Serbia's value-added tax, which currently stands at 18% on all goods and services, to cover the burgeoning budget gap. But Serbian officials said they could make the savings by cutting down on state administration. The officials said they plan a radical overhaul of the public sector, including state administration, education, health and pension systems, to reduce expenses in the years to come. /Wall Street Jurnal Sept 14). Read the whole article here.