Application of Trade Agreement with EU to start on January 1st, 2009

Minister of Economy and Regional Development, Mlađan Dinkić, said last night (December 3rd, 2008) that the agreement had been reached for the application of the Trade Agreement with European Union to start on January 1st, 2009.

Dinkić said that that agreement had been reached the night before at the meeting with the President of Serbia, Boris Tadić, and Prime Minister Mirko Cvetković.

- We will ask EU to provide macrofinancial support for realization of reforms in our country in 2009 – Dinkić added.

As he estimated, it would be inappropriate if Serbia did not start application of the trade agreement with EU since it asked for it.

He said that the priorities in the budget for year 2009 would be: the development of "Corridor 10", realization of project with Italian "Fiat" and introduction of active employment measures.

Dinkić estimated that the budget could be adopted that day or on Friday at the latest, and he said that that depended on the Ministry of Finance and the time that was needed for all technical details to click.

As he explained, the budget structure represented a problem because it did not anticipate application of the trade agreement with EU.

The Deputy Prime Minister of Serbia, Božidar Đelić, expects that the Government of Serbia will determine the draft budget for year 2009 by the end of the week and that it will be accepted by the Parliament of Serbia prior to December 15.

Đelić said that it would be very bad for Serbia if it entered the first quarter of year 2009 with temporary financial plan.

Asked whether the application of the Temporary Trade Agreement with European Union starting January 1st would lead to smaller incomes in the budget, Đelić said that the incomes from the duties would be about 300m EUR smaller, but that it would be covered through saving.

- The application of that agreement means that the incomes from duties on import of raw materials and semi-finished products will be smaller by 150m EUR – said Đelić.

He pointed out that the budget déficit would stay within the projected frame of 1.5% of GNP, that is, between 46 and 47 billion RSD.