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Serbia Announces Austerity Measures To Avoid Bankruptcy


Serbian Finance Minister Lazar Krstic said the government in 2014 will introduce "solidarity taxes."

Serbian Finance Minister Lazar Krstic said the government in 2014 will introduce "solidarity taxes."

Serbia's government has announced austerity measures, including a plan to cut some public-sector salaries by up to one-quarter, in a bid to reduce public debt and avoid bankruptcy.

A six-point package presented by Finance Minister Lazar Krstic at a government meeting also included a value-added-tax increase from 8 to 10 percent for basic goods and the slashing of state subsidies and public-sector spending.

Krstic said the government in 2014 will introduce "solidarity taxes," ranging from 10 percent to 25 percent on salaries in the public sector that are above 60,000 dinars ($712) a month.

Serbia's economy contracted by 1.7 percent last year and unemployment is at almost 25 percent.

The government has foreign debt of 19 billion euros ($26 billion) and a budget deficit of 6.5 percent of annual GDP.

Based on reporting by AP and AFP
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