- Title: SERBIA: Serbia feeling economic crisis, cuts deal with IMF
- Date: 15th November 2008
- Summary: (CEEF) BELGRADE, SERBIA (NOVEMBER 14, 2008) (REUTERS) CARS DRIVING PAST GOVERNMENT BUILDING SERBIAN FLAG ON BUILDING (SOUNDBITE) (English) HEAD OF IMF TEAM ALBERT YAEGER SAYING: "It is quite clear that the global financial turmoil is increasingly spilling over to Serbia." SERBIAN FLAG (SOUNDBITE) (English) HEAD OF IMF TEAM ALBERT YAEGER SAYING: "However looking beyond the immediate short term Serbia is one of the more vulnerable countries in the region from our point of view." PEOPLE WALKING IN MAIN SHOPPING STREET PEOPLE AT CASH MACHINE ELECTRONIC BOARD READING "BUY 84.40 SELL 85.70" ELECTRONIC BOARD AT THE EXCHANGE OFFICE WITH EXCHANGE RATES FOR SERBIAN DINAR PEOPLE WALKING IN STREET (SOUNDBITE) (Serbian) ECONOMIC JOURNALIST, MISA BRKIC, SAYING: "The government is the one which in the days ahead while preparing the budget, which has to be done, must be very brave and face the global crisis which is in serbia. It must says openly to the citizens that the days of uncontrolled spending are over." (CEEF) KIKINDA, SERBIA (NOVEMBER 12, 2008) (REUTERS) CARS DRIVING ON MAIN STREET VARIOUS OF WORKERS LEAVING THE 'LE BELLIER' METAL PLANT (SOUNDBITE) (Serbian) PR MANAGER FOR THE 'LE BELLIER' METAL PLANT, JELENA RADOSAVLJEVIC, SAYING: "We are witnessing the global financial crisis, because our company 'La Bellier Kikinda' is one-hundred percent an exporter and all our products are exported to European Union markets. All events there influence us as well, so a crisis which is present in Europe influences our business as well." VARIOUS OF THREE WORKERS ENTERING HOUSE (SOUNDBITE) (Serbian) UNION LEADER FROM 'LE BELLIER KIKINDA' FACTORY, GORAN RADOVIC, SAYING "I expect nothing from the government, because up till now no-one has done anything. So I believe nothing will be done now either." (CEEF) BELGRADE, SERBIA (NOVEMBER 11, 2008) (REUTERS) MEETING OF THE SERBIAN INDEPENDENT UNIONS (SOUNDBITE) (Serbian) PRESIDENT OF THE SERBIAN INDEPENDENT UNIONS LJUBISAV ORBOVIC SAYING: "This serious situation which is in the world and will most probably happen here in Serbia, the consequences of it have been used. This situation is being manipulated by some employers to illegally lay-off workers."
- Embargoed: 30th November 2008 12:00
- Keywords:
- Location: Serbia
- Country: Serbia
- Topics: Finance
- Reuters ID: LVAAA44NJYYAGG9EJY27034YQV2F
- Story Text: Serbia and the International Monetary Fund (IMF) reached a deal on Thursday (November 13) on a loan that the country could draw from the international lender in case of emergencies to counter the global financial crisis and increase the Balkan country's credit worthiness.
Albert Yaeger, head of the IMF team that over past three weeks have helped the government of President Mirko Cvetkovic draft the 2009 budget, warned that Serbia is vulnerable on a longer term .
"It is quite clear that the global financial turmoil is increasingly spilling over to Serbia," Yaeger said at a news conference in Belgrade on Friday (November 14).
"Looking beyond the immediate short term Serbia is one of the more vulnerable countries in the region from our point of view," he added.
The Serbian government and IMF agreed that the budget deficit for 2009 should be 1.5 percent of gross domestic product a decrease from its current 2.7 percent. Economic growth will slow down to 3 percent, down from present 7 percent.
The deal comes after days-long talks within the Serbian coalition government. The arrangement, which envisions drastic cuts in expenditures, was opposed by coalition's member, the United Party of Pensioners which ultimately agreed to freeze pensions in 2009 at the December's level.
Economic journalist Misa Brkic said the days of uncontrolled spending are over.
"The government is the one which in the days ahead while preparing the budget, which has to be done, must be very brave and face the global crisis which is in serbia. It must says openly to the citizens that the days of uncontrolled spending are over," he said.
Analysts say that metal-processing industry will be hit the most. So far around one thousand people have lost their jobs in Serbia. Some 3,000 workers have been warned that their jobs are at stake.
The French Le Bellie-Kikinda metal plant in Kikinda, some 150 kilometres north of Belgrade, manufactures aluminium castings for the automotive industry with a capacity of 3100 tons per year.
U.S. auto sales dropped last month by a third to their lowest level in past 25 years and European sales plunged sharply, heralding massive job loss which is also threatening Serbia. Jelena Radosavljevic, PR manager at Le Bellier, said the factory is dependent on international markets.
"We are witnessing the global financial crisis, because our company 'La Bellier Kikinda' is one-hundred percent an exporter and all our products are exported to European Union markets. All events there influence us as well, so a crisis which is present in Europe influences our business as well," Radosavljevic said.
Workers who have lost jobs and members of the factory Union have been protesting against the lay-offs and have little faith in the Serbian government.
"I expect nothing from the government, because up till now no-one has done anything. So I believe nothing will be done now either," Union leader, Goran Radovic said.
Unions in Serbia have voiced fears that companies will use the global turmoil as a pretext to lay-off more workers then warranted by the crisis.
"This serious situation which is in the world and will most probably happen here in Serbia, the consequences of it have been used. This situation is being manipulated by some employers to illegally lay-off workers," Ljubisav Orbovic, president of the Serbian Independent Unions said.
But Serbia is a country of contrasts.
Despite the crisis in the car industry, a BMW sales-service centre worth 12 million Euros was opened in Belgrade on Wednesday (November 12).
During the opening ceremony BMW representatives said Serbia was not hit by the financial crisis.
"Now everybody is talking about there being a crisis. And I tell you when you see the Serbian development in the last years of six, seven percent gross rates, a country like Serbia should not go into depression," BMW Deputy director, Kay Segler said.
BMW presented its latest model in the serial 7 at the opening ceremony.
The car has a price tag of about 80.000 euros in Serbia, and the German car manufacturer is confident that they will find customers despite the economic crisis. - Copyright Holder: REUTERS
- Copyright Notice: (c) Copyright Thomson Reuters 2011. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: None
