Branko Ruzic says the indebtedness of local governments is “not as alarming as it might seem in the Fiscal Council’s report.”
The minister of State Administration and Local Self-Government also said that the government would provide “a clear answer on this occasion.”
Ruzic told reporters in Belgrade that all ministries in charge of local governments “will do everything they can to find optimal solutions and prevent abuse in order to avoid undermining the basic function of the state and society.”
“The situation is not as alarming as it would appear from the Fiscal Council’s report itself,” Ruzic said, adding that the report was “a signpost for the Serbian government on how to deal with the issue.”
He said that the ministry headed by him, would initiate “optimization regarding the formation of unnecessary institutions and public companies in some local governments.”
“This has led to the collapse of the substance, because it is not realistic that a municipality of 15 to 20 thousand inhabitants has 17 institutions or enterprises. Such things will no longer be tolerated, we have already done a lot in that field,” Ruzic said.
Ruzic also that “the structure of the debt should be checked – that is, it should be determined how high interest rates are,and who the creditors are.”
In the last report, the Fiscal Council warned that a number of local governments are on the verge of bankruptcy and that the most indebted are Belgrade, Novi Sad, Nis and Kragujevac.
The debts of these cities’ self-governments exceeds one billion euros.
