An increase in the public wages and pensions of only one percent represents additional budgetary expenditure of seven billion dinars.

We agreed to reconsider the freeze issue during the upcoming reviews, but for the time being the agreement remains that public wages and pensions will remain frozen for the whole of 2010.

Cuts in public investments hurt economic growth and I am always amazed to see that Serbia spends seven times more on public wages and pensions than on public investment. In most transition economies that ratio is much lower. Privatization is a key reform bottleneck.

The Serbian economy would probably be in a much better shape today if past governments would have been more forceful in implementing privatization before the crisis occurred.

Although Serbia has successfully passed the third in a series of exams it will undergo until completion of the 2.9-billion-Euro worth arrangement with the International Monetary Fund, there should be no illusion that much of the heavy lifting for the government still lies ahead.

The most difficult tasks are still ahead – says Head of the IMF Mission for Serbia, Albert Joeger, in an exclusive interview to the Bankar magazine.