Serbia must strictly adhere to fiscal rules and encourage exports in order to be prepared for the arrival of a possible new crisis, it was said on Aug. 10 at a meeting between government representatives and monetary authorities.

The meeting, which was called by Prime Minister Mirko Cvetkovic, was attended by members of the economic section of the government and representatives from the National Bank of Serbia (NBS) and the Fiscal Council, the government announced.

Cvetkovic: Adequate measures possible only on the crisis
All economic developments in the region and Europe must be followed with attention, so that adequate measures can be taken to respond to possible spillover of the crisis in Serbia, Serbian Prime Minister Mirko Cvetkovic said Wednesday.

Cvetkovic convened the meeting on the occasion of the latest disturbances on the world market that could cause a new wave of crisis in Europe and Serbia so that the country could be ready for a potential new crisis.

Fiscal Council Member Vladimir Vuckovic told BETA that those at the meeting had come to the conclusion that fiscal policy had to be rational and that the budget deficit and public debt had to be in line with fiscal rules in order not to raise the country's risk.

It was also concluded that Serbia needed a new arrangement with the IMF because that would have a calming effect on the international and local public and foreign investors.

Vuckovic also said that data on economic trends in Serbia in the second quarter of this year were also analyzed at the meeting, which showed that business activity had slowed down and that the spreading of the world's and Europe's crisis could reflect on the real sector, that is companies and production.

It was concluded that the adopted fiscal policy rules must be respected in order to maintain stability in the foreign exchange market and prevent potential risks that could affect the larger oscillations of the dinar.

In that sense, fiscal responsibility, savings and cuts in public spending must be respected at the republic, provincial and local levels.

The new precautionary arrangement that Serbia will sign with the International Monetary Fund (IMF) is essential, it was concluded.

This arrangement would be a guarantor of macroeconomic stability, but also an indication that the Serbian government takes credible economic policy, which is a positive signal to all potential investors in Serbia.

In such conditions, with strict adherence to fiscal rules, it is also necessary to encourage export-oriented economy and competitive industries, such as food processing and agriculture.

The meeting also discussed the issue of liquidity in the financial markets, as well as the possibility to increase investments with appropriate interest rates.

The Serbian government and NBS will hold meetings with businessmen and commercial banks to review their proposals and evaluate the current situation, a statement issued after the meeting says.

The meeting was attended by Deputy Prime Minister for European Integration Bozidar Djelic, Minister of Economy and Regional Development Nebojsa Ciric, State Secretary of Finance Dusan Nikezic, National Bank of Serbia (NBS) Governor Dejan Soskic, President of NBS Council of Governors Milojko Arsic, NBS Vice Governor Bojan Markovic, President of the Fiscal Council Pavle Petrovic, as well as members of the Fiscal Council Vladimir Vuckovic and Nikola Altipamarkov.