Austerity Measures Dominate 2013 Balkan State Budgets
By SETimes
By Drazen Remikovic
In an effort to meet the demands of growing foreign debt and to further stay afloat during the ongoing global economic crisis, several Balkan states are drafting their 2013 budgets with heavy austerity measures.
More than 7,000 teachers and policemen in Banja Luka protested last month against a 10 percent pay cut planned for public sector workers, the first major protest in years against the Republika Srpska (RS) government spending cutbacks.
“The government will have to seek other funding sources to preserve financial stability. This to happen [to] policemen and workers? Not going to. This time we’ll persist to the end,” Dusko Jandric, president of the RS policemen’s union, told SETimes.
The RS government drafted a 2013 budget of 990 million euros, a 7 percent raise from the current year’s spending.
“Our main goal is to maintain financial stability. We plan to reduce the number of state agencies, and public sector wages will be reduced by 10 percent. The aim is to save about 57 million euros in total. These measures are not popular, but it will guarantee RS social stability,” Vlatka Malidzan, RS finance ministry spokesperson, told SETimes.
In the new budget, the government set aside 6.5 million euros for employment, up from this year’s 5 million euros. But the religious community, which received 2.5 million euros this year, will only get 150,000 euros in 2013.
The Federation Bosnia and Herzegovina (FBiH) has a similar economic strategy for the coming year. It continues with its restrictive wage policy as well as an option to dissolve some agencies.
“In the 2013 budget, the government prioritised other obligations, such as funds allocation for the FBiH census, and procurement of firefighting aircraft,” Ivana Raguz, spokeswoman of the FBiH finance ministry, told SETimes.
Croatia is also facing tough economic times. A GDP decline of 1.9 percent this year worries the government, which plans to increase the VAT in certain categories to meet the 2013 budget.
“We’ll increase the VAT for products such as bread and milk to 5 percent. Next year we expect an ambitious GDP growth of 1.8 percent, and expect we can achieve it if we increase public and private investment,” Slavko Linic, Croatian finance minister, told the media in late November.
Goran Radivojac, economics professor at Banja Luka University, said that the entire economic policy can be explained in two words: savings and borrowing.
“The public still doesn’t understand that we don’t save to produce something with the savings. We save to return the debts. Nothing of the savings will remain in our state. A difficult year is ahead of us, and social unrests will slowly enter our state after the New Year. Not only is this the case in BiH, but in the region, and throughout Europe,” Radivojac told SETimes.
Citizens remain discontent with the measures.
“Why don’t the politicians cut their salaries? Citizens are suffering because of their bad political decisions. Politicians are solely responsible for the bad financial condition of the country,” Snezana Stankovic, 45, an economist from Banja Luka, told SETimes.
