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ST GALLEN, Switzerland May 8 Serbia is in talks
with the International Monetary Fund on a three-year
precautionary loan deal, but no firm dates are set, Finance
Minister Lazar Krstic said on Thursday.
He said Serbia was seeking a sum within twice its IMF quota,
suggesting a figure of around $1.5 billion.
"We are in the process of discussions with the IMF and we
will go ahead as planned. We are looking for a standby
precautionary loan," Krstic told Reuters on the sidelines of a
business forum in St Gallen, Switzerland.
To win the deal, seen by investors as a crucial sign the
government is committed to curbing the rising budget deficit,
the new government needs to reform the bloated public sector and
cut subsidies to loss-making state companies. This could mean
thousands of job losses.
"Once we have refined the policies to the required level, I
think that's the point when we will be able to begin engaging
the IMF again to continue the conversation," Krstic said.
An IMF mission visited Serbia in February and said it would
continue talks on the arrangement with the EU candidate country
after a new government was formed. This has now happened.
Prime Minister Aleksandar Vucic has said his government
would seek an IMF deal but gave no details. The fund froze a
previous deal with Serbia in 2012 over failure to restrain
Serbia's budget deficit is set at 7.1 percent of national
output, but the government's top advisory body has warned it
could exceed 8 percent unless saving policies are implemented.
Public debt stood at 63 percent of gross domestic product in
February, higher than the Fund recommends for similar economies.
(Reporting by Alice Baghdjian; Writing by by Ivana Sekularac;
Editing by Zoran Radosavljevic and Ruth Pitchford)