Fiscal Council: No room for increase in pensions, salaries

BELGRADE - The Fiscal Council has noted on Thursday that conditions have not been met to consider rises in pensions and public sector salaries, not only in 2015, but also in the next two years, as in case of this year's increase, the fiscal deficit would as soon as in 2016 practically go back to the level before the introduction of the fiscal consolidation measures.

In its regular report, the Fiscal Council says in relation to the developments in March that the reduction in pensions and public sector salaries is a key measure of the country's fiscal consolidation that brought about the biggest savings in the 2015 budget. "Certain improvements in the collection of public revenues cannot possible catch up with the savings ensured through cuts in pensions and salaries," the Fiscal Council believes.

If pensions and salaries were raised this year, the fiscal deficit would in 2016 practically return to the level before the start of the fiscal consolidation and it would be impossible to halt an upward trend in the public debt and avoid the crisis, notes the report. "Somewhat more favorable fiscal trends in the first quarter have to be maintained for another reason, as an adequate reserve if some of the remaining fiscal consolidation measures fail to be fully successful," the Fiscal Council says.