No time to lose: Fiscal consolidation reloaded

Abstract

Public finance deficits and structural weaknesses of the Serbian economy and society are so severe, that there is no time to lose. After emergency measures, taken in the last quarter of 2012 in public finances, a responsible control over public finances in 2013 is necessary in the first place in order to prevent deficit increase above the projected. It is of key importance for the Government to keep under control what is in its power, i.e. expenditures, including a solution to be found for the arrears problem. Second, along with monitoring execution of this year's budget, the Government has to adopt and implement the Fiscal Strategy measures: solving problems in enterprise restructuring, limiting and reducing subsidies and guarantees, limiting the public sector wages, developing and implementing a rationalization programme as regards the public sector employment, and the like. Third, several systemic fields are improperly regulated, primarily the pension system and vertical imbalance in the public finances between the central and local government levels.