Oct. 27 (Bloomberg) -- The Serbian government imposed a 60- day deadline for payments between state institutions and private business in an effort to boost liquidity in the economy and improve the overall business environment.
The deadline will apply to future obligations while a decision on rescheduling the outstanding bills, including transfers to ministries, estimated at around 10 billion dinars ($140 million) and including 4 billion dinars to private business, will be made over the next two months, Economy Minister Nebojsa Ciric said after a government session in Belgrade today.
“The aim is to end this vicious cycle of debt and we have started in our own yard,” Ciric said. Any future delays will be subject to punitive interest rates normally applied to back taxes, he said.
Calling the measures a “first step,” Ciric said similar restrictions are planned for state-run companies, such as national and regional utilities, “in order to bring more discipline into the system.”
The Serbian Chamber of Commerce estimates current delays in paying the bills averaging 130 days.
Serbia hopes to become an official candidate for European Union membership by the end of the year and has stepped up efforts to overhaul its economy.
“A standard deadline for this in the European Union is 30 days. We hope to eventually adjust to that,” Ciric said.
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