Home News Sports Business

　　Entertainment

　　Food Living Travel Columns

　　Classifieds

　　Jobs Homes Cars

　　By DUSAN STOJANOVIC, Associated Press Writer Monday, September 14, 2009

　　Finance Minister Diana Dragutinovic said Serbia aims to cut spending 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 euro2.8 billion ($4 billion) standby loan granted in March, demanding details on how Serbia plans to finance its growing budget deficit amid the global financial crisis. The IMF had proposed an increase in Serbia's value-added tax ― currently 18 percent on all goods and services ― to cover the country's burgeoning budget gap. Instead, Serbian officials have chosen to 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. "As of January, there will be no salaries for those considered redundant," Economy Minister Mladjan Dinkic said, adding that ministers who don't lay off workers in their sectors will be slapped with hefty fines. Dragutinovic said the IMF insists that the 2010 budget deficit be no more than 3.5 percent of gross domestic product. Serbia had proposed it be 4 percent of GDP and now is running a 4.5 percent deficit. She demanded that ministries give her their cost-cutting proposals by Sept. 18. A trade union representing state employees has already announced strikes if the layoffs are carried out. About 31,000 people, or about 5 percent of Serbia's total work force, have already lost their jobs due to the economic downturn. Unemployment is currently about 18 percent. Serbia has drawn euro788 million from the original loan granted by the IMF in March. It expects to extract an additional euro700 million to finance its budget deficit. The IMF can extend credit to governments that need to cover the gap between tax revenue and spending. The economic downturn has caused Ukraine, Nigeria, Pakistan, Sri Lanka, Mexico, Iceland, Serbia, Belarus and two EU nations ― Hungary and Latvia ― to seek IMF help.