Serb deputy PM Aleksandar Vucic said the IMF is asking the government for some EUR 400mn savings in this year's budget, which should result in reducing the deficit by 0.5% to 1% of GDP, news agency Beta reported on Jan 30 . The Fund's mission is to arrive in Belgrade for talks on a new precautionary agreement on Feb 26 . Vucic said that a key condition of the IMF for signing an arrangement is finding a way to make these EUR 400mn savings. The mission is expected to end its visit on Mar 13 – only days before the early elections in the country called for Mar 16 . Vucic underlined it is the first time the IMF is visiting a country during an election campaign, adding that on the vote his SNS party will seek the citizens' support for the difficult reforms ahead of Serbia . The IMF mission will be headed by Zuzana Murgasova and will focus on fiscal issues and structural matters related to the labour market, the measures to address the high unemployment, as well as the state enterprise reform and business climate issues. The 2014 budget bill targets a consolidated budget gap of 7.1% of GDP, which is among the highest in the CEE region as it includes the payment of activated state guarantees and spending on saving troubled banks and companies. Serbia's latest EUR 1bn stand-by deal with the IMF was frozen by the Fund in February 2012 over signs of fiscal slippage. Another attempt by the government to reach an agreement with the IMF failed in 2013 when the parties again disagreed over vital fiscal austerity issues with the Fund warning further support depends on cuts in the public sector and the pension system. The governing SNS party said in the weekend it will seek the elections only two years after the previous general vote held in May 2012 in a bid to speed up economic and social reforms. It now governs in a coalition with the Socialist SPS party of PM Ivica Dacic as back in 2012 SNS failed to grab enough support to form the cabinet alone.
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