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Dinkic said that the public will be informed about the details of the arrangement, adding that the agreement was reached at the right moment.

We expect support of €3 billion from the IMF over the next two years, of which a sum of €2.2 billion will be provided in 2009, as well as support for refinancing the private sector debt, said the Minister.

According to him, the agreement envisages the reduction in state expenses and their synchronisation with budget revenues. The government will significantly increase national savings, as well as its responsibility, said Dinkic, adding that the burden of these measures will mostly rest on the state administration.

Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic said in an interview with daily Vecernje Novosti that the government has prepared a package of measures for reducing state expenses. More concretly:

On the reduction of state expenses:

First of all, salaries in the public sector will be frozen, saving the state €130 million. We will reduce funds for cities and local administrations. There will be no new jobs, and those who retire will not be replaced with new staff. The position of state servants will be equalised to the position of employees in the private sector. Various privileges used by public servants will be abolished. No bonuses will be allowed. We will not allow the purchase of new cars. We decided to cut costs as much as possible.

The agreement with the International Monetary Fund (IMF):

We expect €3 billion from the IMF in the next two years to fill in the National Bank of Serbia (NBS) foreign currency reserves. This will provide stability for the dinar and help us to adjust to reality.

On the situation in the country:

The situation is difficult. There is uncertainty as the crisis in the world has not reached its peak yet. But the situation is not dramatic. It would be dramatic if the government was not taking any measures. We have a stable coalition. We can cut costs, pump in liquidity in the business sector, especially the private sector as it employs 1.6 million people who “nurture” 550,000 workers in the state and public services. President Boris Tadic is familiar with the situation and we have an absolute consensus on how to tackle problems. Some countries went bankrupt, like Iceland or Latvia; Hungary is on the brink of disaster. We will avoid that. The situation is difficult, but we must not panic.

Preservation of jobs:

We fight for every job. We secured soft loans for companies on condition they do not fire people. We also stimulated the sale of domestically produced goods. Start-up loans are also popular.

When will the budget be revised?

Already in early April. We will ask from foreign commercial banks a loan of €500 million to cover the deficit in the Serbian budget.

What is the amount of the deficit?

Around €1.5 billion, which includes the repayments on the domestic and foreign public debt. We will provide the rest from privatisation revenues, the EU and loans from international financial organisations and commercial banks.

How will Serbia repay debts?

Luckily, Serbia has a low level of public debt when compared to other countries in the region. The public debts amounts to less than 30% of GDP; in Croatia it is 70%, in Germany 100%, in Italy 110%. We still have room to get into debt. The public debt in Serbia at the moment is €6.4 billion while private debt is €15.5 billion.

Is there a possibility to terminate the implementation of the Transitional Trade Agreement?

There are no such ideas. It turned out that the reduction of revenues from customs is not the result of the agreement with the EU; it came as a result of reduced imports by 40% when compared with the same period last year, which halved the foreign deficit.