John
04-13-2009, 06:33 PM
Serbia's central bank, which has urged the state to trim spending amid the global economic crisis, is fighting a government order to cut its own wages by 15 percent, officials said on Monday.
The central bank is objecting to salary cuts for staff on the grounds the move would impinge on their autonomy. They asked for a review from the country's constitutional court.
"Today, it's about wages, tomorrow any other central bank's activity could be hit," the bank said in a statement.
Last week, Serbia's government announced a plan to save a billion euros mainly through a public-sector wage and pension freeze and some tax hikes to lower its deficit after securing a three-billion euro International Monetary Fund loan.
In a Sunday interview with B92 television, President Boris Tadic said facing up to challenges was vital for all officials.
"The central bank governor is just an ordinary Serbian citizen," Tadic told B92 television. "We will see if he endures the pressures he's facing. Everyone is facing pressures and those who do endure are indeed fit to perform their duties."
Bank officials say the salary cut would mark the first time the government violated its independence in almost two decades during which the Balkan nation has emerged from wars, sanctions and bombing to adopt political reform and economic transition.
"During the sanctions, there had been discussions on central bank salaries," Djordje Djukic, a former central bank board member, told Reuters. "But even then, no one dared to impose a decision like that on the central bank."
"The economic crisis is not a state of emergency. We are not in a state of war, there are no sanctions, there have not been any natural disasters, so there is no grounds for violating the central bank's independence."
The government said on Monday it would submit the draconian cuts to parliament on Thursday for approval before May 1. "The central bank will be affected as any other state institution," a spokesman for the prime minister said.
The year-old coalition of pro-Western parties and the Socialists of late autocrat Slobodan Milosevic wants to lead the belt-tightening by its own example after popular discontent over its original plan for a six-percent income tax surcharge.
The billion-euro savings plan calls for a wage freeze for teachers, judges and doctors, while administrative workers will have their wages cut by up to 15 percent. The central bank governor makes 4,000 euros a month.
The law on the National Bank of Serbia says it can neither take nor seek orders from other state institutions.
"Under the circumstances, it would be probably wise to volunteer wage cuts," a member of the bank's supervisory board told Reuters. "The government can't sack the governor because of the wage dispute, but they can expose him to public condemnation or force him to resign. But I don't expect any of it to happen."
The central bank is objecting to salary cuts for staff on the grounds the move would impinge on their autonomy. They asked for a review from the country's constitutional court.
"Today, it's about wages, tomorrow any other central bank's activity could be hit," the bank said in a statement.
Last week, Serbia's government announced a plan to save a billion euros mainly through a public-sector wage and pension freeze and some tax hikes to lower its deficit after securing a three-billion euro International Monetary Fund loan.
In a Sunday interview with B92 television, President Boris Tadic said facing up to challenges was vital for all officials.
"The central bank governor is just an ordinary Serbian citizen," Tadic told B92 television. "We will see if he endures the pressures he's facing. Everyone is facing pressures and those who do endure are indeed fit to perform their duties."
Bank officials say the salary cut would mark the first time the government violated its independence in almost two decades during which the Balkan nation has emerged from wars, sanctions and bombing to adopt political reform and economic transition.
"During the sanctions, there had been discussions on central bank salaries," Djordje Djukic, a former central bank board member, told Reuters. "But even then, no one dared to impose a decision like that on the central bank."
"The economic crisis is not a state of emergency. We are not in a state of war, there are no sanctions, there have not been any natural disasters, so there is no grounds for violating the central bank's independence."
The government said on Monday it would submit the draconian cuts to parliament on Thursday for approval before May 1. "The central bank will be affected as any other state institution," a spokesman for the prime minister said.
The year-old coalition of pro-Western parties and the Socialists of late autocrat Slobodan Milosevic wants to lead the belt-tightening by its own example after popular discontent over its original plan for a six-percent income tax surcharge.
The billion-euro savings plan calls for a wage freeze for teachers, judges and doctors, while administrative workers will have their wages cut by up to 15 percent. The central bank governor makes 4,000 euros a month.
The law on the National Bank of Serbia says it can neither take nor seek orders from other state institutions.
"Under the circumstances, it would be probably wise to volunteer wage cuts," a member of the bank's supervisory board told Reuters. "The government can't sack the governor because of the wage dispute, but they can expose him to public condemnation or force him to resign. But I don't expect any of it to happen."