Serbia Cuts Pensions, Public Sector Salaries

Serbia will cut pensions and public sector salaries as part of a package of economic reform measures.

Serbian Prime Minister Aleksandar Vucic explained in a Thursday interview for state-run TV station RTS that public sector salaries of over RSD 25 000 per month would be cut by 10-10.5% and that the country would adopt progressive pension cuts of 3.1%-10%.

He said that the reform measures were also aimed at fighting the illegal economy, cutting red tape, reducing subsidies for certain state-owned companies and supporting the business sector.

Vucic, as cited by the BGNES news agency, made clear that the measures were to take effect in October, adding that the steps would help strengthen Serbia’s economy and find an exit from the crisis in 2016.

He said that 60.2% of the pensioners would be unaffected by the pension cuts, with those receiving monthly pensions of over RSD 60 000 being hardest-hit.

Serbia’s Prime Minister specified that people receiving salaries of over RSD 100 000 would be subject to 20% tax.

Vucic emphasized that Serbia was far from bankruptcy.

He pointed out that Serbia’s debt had increased from EUR  8 Bto EUR 17.67 B in the period 2008-2012, adding that the private sector had been totally annihilated, while money was systematically siphoned off from all of the state-owned companies.

Vucic also underscored that public sector salaries were 40% higher than private sector salaries.

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