Serbia awaits USD 250 milllion - World Bank to grant loan if reforms start by summer

The World Bank will approve a USD 250 million loan to Serbia for the budget if the reorganization of companies in our country kicks off by the summer, and that is the only condition set by that international finance institution for the new Serbian government, said World Bank Country Manager for Serbia Tony Verheijen.
- The Government has nine months to begin reforms to avoid "Greek scenario," and some of these reforms must include unpopular measures, such as wage reduction in the public sector - Verheijen told the national broadcasting corporation RTS.

When asked why the new Government had been given nine months to carry out the reform of companies, he explained that "every new government has a 'honeymoon' of 100 days, and when another half a year is added to that, we get a period of nine months in which the most important thing is that the Government determinedly begins reforms".

According to Verheijen, the measures that would clear out the situation with the budget and cut deficits in the quickest possible way include the reduction of salaries in the public sector, downsizing, and the reorganization of state-owned companies.

- Salaries in Serbia's public sector are the second largest in Central and East Europe. Serbia is the only country to have increased these salaries in the past three years - he pointed out and assessed that this was one of the expenses the Government must put under control.

Asked if the wage cut was a condition set by the World Bank for the approval of a loan of USD 250 million for Serbia's budget, Verheijen reminded that the only condition for that laon was the reform of state-owned companies.

Svetska Banka-WB Beograd

Vlada Republike Srbije

World Bank loan

World Bank Office in Serbia

Tony Verheijen

public sector salaries

budget deficit

wage reduction