Serbian lawmakers are set to vote on Prime Minister Ivica Dacic’s new cabinet, which would push through painful changes to kick-start the economy and convince investors it can avoid running out of cash.
Debate on new ministers begins in the Belgrade-based parliament at 11 a.m. today, while a vote, which has been delayed for more than a week, may take place late in the afternoon.
Deputy Premier Aleksandar Vucic’s poll-leading Progressive Party, which forced the ejection of former Finance Minister Mladjan Dinkic’s junior ruling party from the government in July, have threatened to trigger early elections if their plan to close or sell scores of public companies and lure investment to pull the economy out of recession is rejected.
Dacic told lawmakers last week that the country was facing “a difficult period” in its fight for the “halt of economic decline and a fight for every single new job. That’s why I ask you to support the appointment of new members of the government,” he said on Aug. 30.
Serbia’s government needs between 1.6 billion euros ($2.1 billion) and 1.7 billion euros to get it through the end of the year, former central banker and finance ministry adviser Milojko Arsic told Bloomberg on Aug. 26.
That would mean the the government must try to persuade investors even as yields on Serbian 10-year Eurobonds hover just under the 7 percent threshold that prompted some countries to seek international bailouts in the euro area.
Vucic’s economic adviser, Sinisa Mali, has said Belgrade would approach the IMF for a precautionary aid deal this month. The Fund refused to enter into talks in May after Serbia fell behind on agreed fiscal targets.
Finance Minister nominee Lazar Krstic forecasts the budget deficit will reach 6.5 percent of gross domestic product this year, almost double an original forecast of 3.6 percent, Belgrade magazine NIN reported on Aug. 21.