(Removes superfluous initials in headline.)
* Legislation raises retirement age for women
* Liberalises labour market to attract investors
* Serbia trying to rein in budget deficit
By Aleksandar Vasovic and Ivana Sekularac
BELGRADE, July 18 The Serbian Parliament adopted
the first in a raft of reforms intended to cut spending and
attract investors, with measures that liberalise the labour
market and raise the retirement age for women.
The government is now expected to move quickly to push
through legislation on bankruptcy and privatisation. That will
provide a basis for restructuring dozens of loss-making
Serbia is trying to cap a consolidated budget deficit
expected to reach 8.5 percent of national output, before it
begins loan talks with the International Monetary Fund later
The coalition government is wrestling with how to rein in
spending. Lazar Krstic resigned as finance minister on Saturday,
saying he did not have the support to make the kind of radical
cuts he says Serbia needs to steady its finances.
His replacement, Dusan Vujovic, has advocated a milder cut
of 10 percent to pensions and public-sector wages, aimed at
reducing the deficit by around 1.4 billion euros ($1.9 billion)
over the next three years.
Successive governments since the fall of late Serbian
strongman Slobodan Milosevic in 2000 have avoided tackling a
bloated and costly public sector.
Prime Minister Aleksandar Vucic, armed with a popular
mandate unprecedented since Milosevic's reign in the 1990s, says
Serbia can no longer afford to wait.
Investors, however, remain uncertain as to whether he will
hold his ground. He faces a potential backlash in a country
where the average wage is 280 euros per month and every fifth
worker is jobless. Several thousand trade unionists protested on
"To have a functioning free-market economy requires the
flexibility to fire a bad worker," Nikola Altiparmakov, a member
of the Fiscal Council of economic advisors, told state
television. "The current law is so rigid and it did not allow
that. It is one, but not the only, pre-condition for achieving
economic growth and a higher employment rate in the coming
The changes cut the costs to employers of hiring and firing
and gradually raise the retirement age for women from 60 to 65.
Unionists, however, rallied in central Belgrade on Thursday
carrying banners that read, "We want work, not slavery" and "No
"It was the state that brought us to starvation, it was the
state that allowed thieves to privatise firms, it was the state
that failed to restart production and now the workers have to
pay the price," said Dejan Petrovic, a 48-year-old metalworker.
($1 = 0.7389 Euros)
(Editing by Matt Robinson, Larry King)