The guarantee schemes by which the state provides liquidity and working capital assistance to companies are a good and useful measure, as are all the others devised the authorities in Serbia to combat the negative effects of the coronavirus, but they will certainly not be sufficient to effectively combat the new economic crisis, economic experts say.
Toplica Spasojevic, president of the ITM System, underlines that all the government measures are very important for businesses, but since the coronavirus epidemic is not decreasing, it will probably be necessary to undertake further measures in this direction and the state will have to work to find other ways to help the economy.
“We must wait a little longer to see if the virus will continue to spread or if the epidemic, or its first wave, will end. If the epidemic continues, it is certain that the current state aid will not be enough and that ways will have to be found to provide additional funds, first and foremost, for the tourism sector and others who are directly and strongly affected by the pandemic,” explains Spasojevic.
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The Honorary President of the Union of Employers of Serbia, Nebojsa Atanackovic, agrees with the view that previous government measures have helped companies, but believes that there is room for monitoring the situation and responding appropriately through further initiatives to preserve economic activity.
The government has announced that it will consider further possibilities to help entrepreneurs in order to suppress the negative effects of the virus on the economy.
“One of these measures is support in hiring young people who are applying for their first job. I believe the government is closely monitoring the situation and considering further measures that would make it easier for the economy to work in conditions where the virus persists,” Atanackovic said.
Goran Rodić, vice-president of the Serbian Chamber of Construction, noted that all measures implemented by the government, including those related to bank guarantees, make sense in the case of construction only if local developers start playing a leading role in major infrastructure works in the country.
“If Serbian companies were in charge of the infrastructure works, domestic construction would earn a lot more money than it does now, when it mainly gets second-class jobs. Taking over the main role in the construction of infrastructure works would give local companies a livelihood, and create the possibility of increasing salaries and the opportunity to hire new workers,” says Rodić.
The Government of Serbia has approved the decree on the determination of the guarantee scheme as a measure to support the economy to mitigate the consequences of the pandemic, which allows a state guarantee for loans with a total value of up to two billion euro.
These loans have a repayment period of 36 months and a grace period of 9 to 12 months, with the state guaranteeing up to 80% of the amount due. As at 15 June, 6,332 loans, with a total value of €526 million were approved, including contracted loans, of which 4,996 with a value of €365 million. Work is underway to approve further 3,449 loans with a total value of €453 million. A further €1 billion is available to businesses under the guarantee scheme.
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