At the sitting held on 12 December, the Finance Committee discussed in principle the Bill on the Budget of the Republic of Serbia for 2010, with the memorandum on the budget and economic and fiscal policy for 2010, including projections for 2011 and 2012, as well as its accompanying proposals of decisions granting consent to financial plans for 2010 of the Republic Fund for Pension and Disability Insurance of Employees, the Republic Health Insurance Agency and the National Employment Service. The sitting was chaired by Zoran Krasic, Committee Chairman.

Elaborating next year’s Budget Bill, Minister of Finance Diana Dragutinovic stressed that the 2010 budget should achieve two goals – contribute to next year’s economic recovery and ensure higher responsibility for public sector finance. Next year’s Budget Bill envisages an income of 656 billion RSD, expenditure of 763 billion RSD, and a 107 billion RSD deficit. Such a budget should contribute to macroeconomic stability and sustainable economic development in the coming year.

Minister Dragutinovic stressed that the proposed budget is oriented to development and investment and it represents a balance between social and motivational measures. The economic crisis emphasised some structural problems in Serbia’s public finance, i.e. imbalance between income and expenditure which is unsustainable in the long term. That is why the Serbian Government is determined to reform public finance and make them more transparent. Amendments to the Budget System Law shall be proposed to this end, as well as an introduction of the institute of fiscal responsibility, the Minister of Finance pointed out.

The Committee members made several objections and suggestions to the 2010 Budget Bill. Among other things, it was pointed out that the budget does not adhere to the Constitution and does not state how much would be allocated to AP Vojvodina. They also asked how much of the funds are intended for investment into the Car Factory in Kragujevac.

By a majority of votes, the Finance Committee accepted the 2010 Budget Bill with its accompanying documents, with four reserved opinions and two votes against.