Towns and local self-governments in Serbia owe around a billion euros, and are late in settling their financial obligations amounting to 300 million euro, or 4% of the national GDP – said the president of the Fiscal Council, Pavle Petrovic.
At a press conference in Belgrade, Petrovic said that the fiscal problems of towns and self-governments were jeopardizing Serbia’s public finances and limiting the country’s economic growth. „If the Serbian government doesn’t do anything about it, the debt incurred by the Serbian towns and local communities will sink public finances“, Petrovic warned.
This debt, as he said, was tantamount to the debt of the Electric Power Industry of Serbia (EPS) or Srbijagas.
„The structural problem of local self-governments lies in the fact that huge budget funds are being spent on subsidies, a total of approximately 200 million euros, while, at the same time, there is a need for 250 million euros to be invested in local infrastructure, water supply systems, sewage, waste processing and similar“, Petrovic underlined.
He also added that both Belgrade and Novi Sad have been releasing faeces and other sewage material into the Danube because they have no central waste processing facility.
„Out of the public companies, the biggest debt was generated by the Gradsko Saobracajno Preduzece Beograd (The Belgrade City Transport Company) which receives 100 million euros in subsidies annually, and Kragujevac-based company Energetika which owes and is owed a lot. The city of Kragujevac is in the most difficult position of all the cities in Serbia and there is a danger of Kragujevac going bankrupt if something is not done“, Petrovic goes on to say.
He adds that the government, i.e. the economy, finance and local self-government ministries, were supposed to deal with these problems years ago.
„Cities like Kragujevac, Belgrade, Novi Sad and Nis will fall apart financially if the Serbian government doesn’t do anything. Our Council will also present these survey results to the International Monetary Fund“, Petrovic concluded.
(N1, 27.06.2017)
It was the west which heavily pushed these local self-governments, but they have run things into the ground and are now wanting the Serbian government’s help. Perhaps less power should be given to the local governments and more to the state if they have been shown poor models which don’t work well.