The second set of government measures for the business sector, which includes the payment of 60% of the minimum wage (which is equivalent to about 18,000 dinars) for the period of two months, and the temporary monthly exemption from payment of payroll tax and contributions, will cost the state budget 63 billion dinars, but the state has not borrowed money for this measure, said Finance Minister Sinisa Mali.
What the minister failed to say is that the state did not borrow money “only for the time being”, considering that the Fiscal Council has assessed that the state would have to borrow another 2.5 or 3 billion euro by the year-end to finance the budget deficit and pay previous debts. Total debt this year is expected to be around EUR 7 billion.
In its analysis, the Fiscal Council states that the government has already borrowed most of the money (about 60%), by issuing Eurobonds worth two billion euro, which is probably why it now has money to pay the 530 million euro (for the implementation of the second set of measures) in the coming months.
The Council also notes that loans could be mitigated if the money were taken directly from government deposits, estimated at between 400 and 500 million euro. The largest source of funding for the government is the commission that the French company, Vinci paid on the account of concession for Nikola Tesla Airport.
In addition, the state plans to borrow some 435 million euro in the third quarter of this year.
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Milojko Arsić, professor at the Faculty of Economics in Belgrade, estimates that, by the end of the year, the state will have to borrow at least another billion euro, and it all depends on how long the measures will last and whether there will be other sectoral measures, as well as how taxes will be collected.
“The state has room to adapt. It can tone down infrastructure works and reduce consumption. In fact, it has already reduced these expenditures by 20% through a budget review. So, it seems that there is still some money in the state deposits, but this must be kept for emergency situations, as a reserve. Also, the question is which of these funds come from the state budget and which from other state institutions, local administrations, municipalities, whose money is deposited in the treasury account,” explains Arsić.
He adds that the money should not be borrowed through issuing bonds, but the state can also borrow from banks, the EU, the IMF…
The Fiscal Council warned of the danger of the growing public debt and hence of the cost of interest, which is considered an unproductive cost.
This post is also available in: Italiano