The Serbian government will raise the guarantee sum for deposits of citizens in banks to 50,000 euros (about 67,120 U.S. dollars) as one of the measures to minimize the effects of the worldwide financial crisis, Prime Minister Mirko Cvetkovic said Monday.
"We will consider whether to raise guarantees on savings to 100,000 euros (about 134,240 dollars) if there's the need for it, "Cvetkovic said at a meeting with the Serbian Chamber of Commerce.
Currently, the Serbian government guarantees private savings up to 3,000 euros (about 4,027 dollars).
Cvetkovic said the government would also propose the temporary abolishment of taxes on bank savings interests until the end of 2009, capital gains taxes in trade in securities until 2012, and taxes on transfer of absolute rights on securities.
He added that the government would consider postponing the announced increase in phone charges until Jan. 1, 2009.
The government measures are the latest effort by Serbia to keep its economy and financial system stable.
Last Friday, Serbia's central bank changed the reserve requirements for commercial banks to help boost market liquidity and ease pressure on its currency dinar, which fell to a five-month low against the euro last week.
Emerging markets in eastern Europe are feeling the pinch of the global financial crisis, prompting these countries to take defensive measures as the credit crunch spreads worldwide.
"In the short run, the global crisis did not affect us, but the2009 budget will contain allocations to maintain the stability of the banking system and attract foreign investments, should we conclude that the crisis will have a negative impact on the financial system and industry," Cvetkovic said.
Slobodan Ilic, state secretary of the Finance Ministry, said the nature of government measures would primarily be psychological and there is not a single rational reason for citizens to lose confidence in the domestic banking system.
Source: Xinhua
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