* Finance minister resigns over reform disagreements
* Had sought 15 percent cut in public wages, 20 percent in
* Acting finance minister eyes 10 percent cuts in both
* Says package must be acceptable to IMF as loan talks loom
(Adds dealer comment on dinar exchange rate)
By Aleksandar Vasovic
BELGRADE, July 14 Serbia's acting finance
minister said on Monday he aimed to ease back on previously
announced cuts to pensions and public sector wages, looking to
soothe market nerves two days after his predecessor resigned.
Lazar Krstic stepped down as finance minister on Saturday,
saying he did not have the support of Prime Minister Aleksandar
Vucic for tough measures Krstic sought in order to rein in
public spending and cut Serbia's ballooning budget deficit.
With loan talks with the International Monetary Fund
looming, Krstic had sought a public sector wage cut of at least
15 percent and 20 percent for pensions.
His interim replacement Dusan Vujovic, who is expected to
take over permanently, said on Monday he would look to cut both
public wages and pensions by 10 percent.
"We will try to stay within what is reasonable, and 10
percent is reasonable," Vujovic told Serbia's state broadcaster.
"The entire package must by acceptable to the International
Monetary Fund and global markets."
Krstic had also called for a minimum of 160,000 of Serbia's
roughly 700,000 public sector workers to be laid off over the
next two years, as the best way to curtail a budget deficit
threatening to exceed eight percent of output.
A dealer with a Belgrade-based bank said markets were
"somewhat nervous" after Krstic's resignation and the Serbian
dinar, which the country's central bank keeps in a
managed float, weakened by 0.2 percent against the euro on
Vujovic said his aim was to cut the deficit to 130 billion
dinars (1.1 billion euros) by the end of 2017, from an initially
planned 182 billion dinars (1.56 billion euros) this year.
The government is expected to revise the 2014 budget and
increase its deficit forecast in September. Serbia is expected
to begin negotiations with the IMF on a new precautionary loan
deal in the autumn.
The Serbian dinar, which the country's central
bank keeps in a managed float, weakened by 0.2 percent against
the euro after Krstic's resignation. Around 2PM (1200GMT) on
Monday the currency traded between 116.2 and 116.45 to euro,
Reuters data showed.
"Slightly weaker rate is seen as favourable for the economy,
mainly because of exports of agricultural products, that's why
central bank interventions are expected to be mild," said a
dealer with a Belgrade-based bank. "True, investors are somewhat
nervous after Krstic's resignation," he said.
Serbia's 5-year credit default swaps widened
by 9 basis points, or 3 percent over the week, to a mid-market
level of 271 basis points.
(Reporting by Aleksandar Vasovic; Editing by Matt Robinson and