Serbian President Aleksandar Vucic has announced the realization of an economy stimulus package worth EUR 2.5 billion, including money for all Serbian citizens of age and minimum wages for companies.
Vucic said on RTS that all citizens would be able to apply for a sum of 30 euros in May and then another 30 euros in November, whereas the pensioners were to get another 50 euros on top of that sum of 60 euros.
He said that micro, small and medium enterprises would get three times 50% of the minimum wage and added that there were deliberations about whether to apply the same measures in large companies as well.
He said that the payment would start on April 1.
Vucic announced that, in the transportation sector, a sum of 600 euros for each bus would be paid on six occasions “so that they can survive and preserve their capital”.
He announced that the state would “expand the guarantee scheme” by another EUR 500 million in order to maintain the liquidity of the business sector.
When asked where the money is coming from, Vucic answered that “it’s Serbian money, from the Serbian budget, from the serious Serbian state”.
He emphasized that the state would not experience any problems due to the economy stimulus package and added that Serbia’s public debt would not exceed 61%.
– Everything is under control, we will not leave debts to the upcoming generations, and everything depends on our growth – he said.
CCIS: Economy aid to preserve capacities and liquidity
The announced economy stimulus package of EUR 2.5 billion is a very important step toward the recovery that should follow, especially in the situation of maintained employment rate and the IMF’s projection of the growth of Serbian GDP by around 5%, the assistant director of the Sector for Strategic Analyses of the Chamber of Commerce of Serbia (CCIS), Bojan Stanic, told Tanjug.
He added that the help in the form of minimum wage would help numerous companies preserve their production capacities, as was the case with last year’s measures, according to him.
– The exports dropped by merely 4-5%, so that base in the production-exporting sense has been preserved. On the other hand, the employment rate is reflected on citizens’ personal consumption, which is one of the main components of our GDP. So it was truly the crucial contribution of last year’s package, and this new one will certainly contribute to maintaining the employment rate. When you look at the unemployment rate, which was 9% last year, those are pretty good numbers – Stanic claims.
He expects the measure of help to transporters of EUR 600 per bus to enable them to survive until the tourism sector recovers.
Stanic emphasizes that the measure was proposed by the CCIS, in cooperation with its Association of Transporters.
– Compared to 2019, the number of kilometers in road transport dropped by around 80%. That is truly a loss that they can’t compensate for themselves, so this will certainly help them keep the capacities, which is closely tied with tourism, which we know was the first one to be affected in this crisis and is among the last ones to recover – Stanic said.
The new guarantee scheme of EUR 500 million should enable the further preservation of companies’ liquidity.
– Last year’s guarantee scheme, agreed with the government, contributed to credit activities and preservation of companies’ liquidity. It is the continuation of the guarantee scheme that will additionally secure credits at relatively favorable terms for maintaining liquidity until the moment the economy starts recovering – Stanic said.
He reminds that, last year, Serbia had a GDP drop of only 1.1%, among the lowest rates in Europe, so this year’s growth of 5%, according to the IMF’s projection, will be more than enough to cover last year’s losses.
– On a global level, a recovery is expected, that is, the covering of last year’s losses. Euro area states will need more time to recover, and Serbia is a in a more favorable position than the countries in the region, so we believe that there is potential – Stanic says.
MADZAR: Decision on aid to citizens and pensioners unreasonable
The decision of the president of the state to give 60 euros to each citizen of age who applies and 110 euros to each pensioner is unreasonable and inappropriate, economist Ljubomir Madzar said today.
He told Beta that “it is entirely irrelevant whether there’s money in the budget or not, and there is no money, because the state is incurring debts and the public debt is growing”.
– If social support is the inspiration for such a decision, then it must be selective and not frontal, considering the “white plague” and the demographic situation in Serbia. This discriminates against families with an above-average number of children – Madzar said.
Madzar said that it was justified to incur debts due to the costs caused by the pandemic, “but not for this kind of help, which is unprecedented in the world”.
He added that he couldn’t explain why the same kind of decision was being made as the one adopted in the spring of 2020, ahead of the election, which was publicly criticized.
– The decision to give EUR 100 to each citizen of age last year seems to have been motivated by trying to attract votes, and why the same mistake is being repeated now is familiar only to the president of Serbia. However, the reasonable assumption is that this is meant to buy votes at the future election in advance – Madzar said.
He said that it was not rational to distribute help to pensioners in such an ad-hoc manner either, because “there are those with high pensions, and this decision does not account for that difference”.
– If the goal is to help pensioners, it should be done through law amendments – Madzar said.