Serbia To End Protection For Indebted State Firms - Prime Minister

Serbia will not ask the International Monetary Fund to let it continue protecting indebted state-operated firms from creditors, Prime Minister Aleksandar Vucic said on Wednesday, reversing government policy, Reuters reported. An IMF mission this week started its review of Serbia's 1.2 billion euro ($1.36 billion), three-year precautionary loan deal, which, amongst other things, envisions the state selling or reforming a number of unprofitable and indebted companies. Serbian law allowed the government to shield some 97 companies that have failed to find new owners or partners, including 25 major assets, such as the RTB Bor copper mine and smelter, Petrohemija petrochemicals and Galenika pharmaceuticals, which provide work for thousands. This protection from creditors is set to expire on May 31 and Economy Minister Zeljko Sertic had said on Tuesday that the government would ask the IMF to allow another "year or two" of cover. "Because, on May 31 ... these companies could go straight into liquidation," the Tanjug news agency quoted him as saying. However, on Wednesday, Vucic said he had decided to drop the government proposal. "We made that stupid proposal to the IMF, to give a carte blanche to 25 companies, (and) I have said we do not want that ... I am fed up with easy solutions," the prime minister told reporters after meeting the IMF team in Belgrade. "We will talk with creditors, because there's a limited number of (such) companies," he said. The company debts are mainly unpaid utility bills and services owed to other state-owned entities. The government looked likely to liquidate dozens of smaller firms that have largely been dormant for years, focusing its efforts on finding solutions for the bigger companies. Read more.
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