“The first stage in redundancies will have been finished by the time the fifth IMF audit starts and it entails reducing the number of civil servants by 14,000 which should have been done back in January”, said yesterday the Deputy Prime Minister and the Minister of State Administration and Local Self-Government, Kori Udovički.
Out of this number 9,000 jobs will be eliminated through targeted redundancies. Speaking at the Kopaonik Business Forum, the Minister outlined that, this time around, the redundancies were not going to be harshly executed but rather with a surgical precision to ensure that the civil servants who were actually needed would keep their jobs.
As an example, Udovički mentioned the teachers who left with severance pays followed by hiring of new teachers because teaching had to continue, or the people, close to retirement, getting severance pays.
As noted during the panel discussion which, apart from Udovički, was attended by the Deputy Prime Minister Zorana Mihajlović, Economy Minister Željko Sertić and President of the Fiscal Council, Pavle Petrović, in the following five years, 6,000 employees of the Serbian Railways would be made redundant as a surplus. Only in the first year, 2,000 will be laid off. Also, 1,000 employees of EPS will be made redundant.
“Even after reducing civil servant salaries by 10%, Serbia still spends 11% of its GDP on these salaries while the EU average is 9.5%. The standard is 8% while our fiscal strategy stipulates 7% because we have huge pension costs”, Udovički said. She added that our public administration was not huge although it is too expensive to maintain. She also said that there were 7 civil servants per 100 Serbian citizens while, in the EU, there are 8 civil servants per 100 inhabitants. In the rest of Europe, this number is even higher.
Udovički went on to say that if the number of employees in healthcare and education was reduced by 5%, the state would save around 0.3% of the national GDP. For instance, there isn’t enough hospital staff yet 25% of people working in healthcare and education are not medical professionals or teachers.
Economy Minister Željko Sertić reminde that, in the period between 2008 and 2013, his Ministry directly transferred €500 million to 556 companies undergoing restructuring “without any results”. “These 556 companies have lost their market long time ago but the problem waSs 92,000 of their employees who were given money by the state and hope that things would improve. Keeping their hopes high was the state’s business”, Sertić added. He also said that the current Government changed this practice and now 90% of those 556 companies have declared bankruptcy, some are undergoing reorganisation while some have continued operating in agreement with their creditors.
President of the Fiscal Council, Pavle Petrović criticised EPS for agreeing to a cumulative increase of salaries in the amount of 5 billion Dinars which coincides with a 6-billion-Dinar growth in EPS’ revenue following a hike in electricity prices. “EPS is a huge problem. The company’s debt stands at €1 billion and not all of it is old debt. In 2009 alone, the company generated €550 million of debt. That’s why there is a danger of EPS becoming a problem like Srbijagas”, Petrović warned.
This post is also available in: Italiano