The Government of Serbia’s measures to assist the economy in the context of a coronavirus pandemic are good and it is now extremely important to think carefully about the mechanisms for their implementation, since it will largely depend on how successful they are, say the Center for European Policies (CEP).
The program of economic measures to reduce the negative effects of the crisis caused by the pandemic is worth 5.1 billion euros and represents the most significant and largest intervention of the Serbian state with the aim of helping the economy ever, said CEP associate Marko Obradovic.
Obradovic said that the minimum wage payment for all businesses and entrepreneurs, or 50 percent of the minimum wage for large enterprises, as well as a tax and wage deferral measure, is primarily aimed at stimulating the affected sectors of the economy that can expect relatively quick returns to pre-crisis mode.
“The main objective of this measure is not to lay off workers, and thus to readily welcome the normalization of the situation and the smooth continuation of the production process,” said Obradovic, who is also the coordinator of the Working Group of the National Convention on the EU which monitors the negotiations on Serbia’s EU accession to the EU – chapters 4 and 9.
Assuming that companies will administer the measure directly to their employees, CEP says they expect relatively high efficiency in its implementation, given the state’s announcement that it will prevent abuse, through the requirement to open special purpose accounts for workers’ payments.
“We only hope that the economy can independently endure the time until the implementation of this measure, which was announced on May 15, ie it will be able to pay its April salaries,” Obradovic said.
Obradovic also says that the corporate income tax exemption measure is a measure that “particularly helps successful businesses,” and that it will have an immediate positive effect on their liquidity.
According to him, the program of financial support to the economy through the Development Fund worth around 200 million euros and a guarantee scheme for supporting the economy through commercial banks, worth about two billion euros, support the liquidity.
As for the measure that caused the most noise among citizens – to help every adult citizen of 100 euros, this is, according to Obradovic, a measure whose main objective is to encourage spending after the end of the state of emergency and through the most economically desirable way, ie. market, pump money into the economy.
The CEP is convinced that this measure can be implemented without any problems, since the state has already administered the distribution of free shares to all adult citizens once.
Obradovic also adds that concerns remain that no measures are envisaged for the public sector, in the face of dramatically reduced fiscal revenues and a deep crisis in the private sector, resulting in increased pressure on public finances and lack of social solidarity.
In addition, Obradovic says that sectoral measures for those industries that will feel the long-term impact of the crisis, such as the tourism industry, air transport, hotels, as well as parts of agriculture that are directly leaning on, are of particular importance.
“In these sectors, revenues have fallen to zero, there will be no rapid recovery in demand, so the pressure to maintain employment levels without significant government involvement is completely counterproductive and may prevent business normalization in the long run,” Obradovic says, Beta informs.
