Vucic on measures to save economy: All companies to get minimal wage money; €100 to each citizen

Photo: Shutterstock, Tanjug/INSTAGRAM "BUDUCNOSTSRBIJEAV"

"I'm less afraid for our economy, although it will get much more difficult," the president of the Republic of Serbia, Aleksandar Vucic, said last night while presenting a program of economic measures to counter the effects on the economy of the coronavirus epidemic.

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Vucic stressed that all companies, all entrepreneurs, micro and small businesses, bakers, hairdressers, all companies will receive money to pay their workers full minimum wage for the next three months. That will cost the state 700 million euros.

He announced that the payments would start within a month, as the state needs two months to see whether the workers had been laid off or not.

"We want to help entrepreneurs survive, but only those who have not laid off more than 10 percent of workers will be able to count on assistance," he added.

He also stressed that Serbia has surplus money in its state budget that will help us recover, and that, he said, will happen through three ways of financing:

- internal reserves

- borrowing in domestic, internal securities market

- borrowing in international capital market

For the first time, Serbia will introduce corporate bonds (for large companies).

How will money be pumped into businesses?

Vucic said that more than 5 billion euros are in the package of measures for the recovery of the Serbian economy. He emphasized that the program will help the economy, small, medium-sized and large enterprises alike, while the authorities are also considering how to help smallest companies, especially those producing vegetables and dairy farmers.

Special support will be provided to the hospitality industry, he added. At the same time, there will be no reduction in public sector salaries nor in pensions, because, he says, we have been preparing for something like this.

He also said that payment of taxes and contributions for next year will be delayed, as well as the advance income tax for next year.

The second measure, the president explained, is needed for the liquidity and solvency of medium-sized enterprises, but especially for small and micro ones - and that is a guarantee fund, through which the banks will inject 2 billion euros into the system.

"2 billion euros will have to be put into the system by the banks, and from that we take on responsibility for between 480 million and 600 million, we'll have to reach a deal on about 550 million with the banks, which comes to 1.25 billion to finance small firms," said Vucic.

The state will act as the guarantor for three years.

As he said, the deal with the banks is nearing completion, and the governor and the finance minister have already spoken with bank associations.

According to him, we have more money than others.

He said the Serbian economy will continue to be number one compared to the countries in the region. Speaking about the part of the program regarding measures for the recovery of the Serbian economy, Vucic said that we have mechanisms for monetary action.

US President Donald Trump, on the other hand, has none, he added.

"The economy is what has been giving the primacy to America. Trump wants to preserve the economy. As a leader of a small country, I'm not as torn as Trump is," he observed.

"We have money. We have three economic measures ready. Each company will receive money to pay minimum wages."

Each citizen to receive 100 euros?

He stressed that we will continue negotiations with the IMF. He also recalled that the credit rating agency Fitch had confirmed Serbia's rating.

When asked where all this money we have is coming from, he replied:

"There's one more thing I didn't say. We found more money. We have enough money. We are thinking of giving each adult citizen of Serbia 100 euros as a gift to increase spending. It's throwing (money) into a pit - but it will be good for people who are poor," Vucic said while appearing on TV Prva.

"That's a lot of money in the mass, so that's another 520 million euros. To every single adult citizen, employed, unemployed, retired, whoever they are, (€100) as a one-off," Vucic revealed.

He pointed out that it would mean a lot to the poor, and that it would boost spending, which in turn boosts the economy.

He explained that these measures are what's known as "helicopter money." He also said that behind these economic measures are professionals, the Ministry of Finance, the central bank (NBS), as well as other domestic and foreign experts.

Vucic said the state will look to help farmers in this situation as well -mostly around the prices. National carrier Air Serbia will also get assistance.

(Telegraf Biznis)