Serbia will implement its interim trade agreement with the European Union from January 1 2009, after consensus was reached at a meeting on December 3 2008 attended by president Boris Tadic and prime minister Mirko Cvetković.

The Serbian government website attributed this statement to deputy prime minister and economy minister Mlađan Dinkić. The December 3 meeting had been held at his initiative, he said.

A day earlier, Serbian media reports had called into question whether Serbia would go ahead with implementation of the agreement from January 1, given that at that point there was no agreement among Serbian leaders on the question and because of concerns that eliminating tariffs on goods coming from the EU would reduce earnings for Serbia's economy, already troubled by the global financial crisis.

Dinkić said on December 4 that implementation of the interim trade agreement was important because the EU would now be expected to support macro-economic reforms in Serbia, and so it was only logical for Serbia to implement the agreement.

He said that after solving certain technical problems, the Serbian government should today discuss the draft budget for 2009.

If the budget was not adopted on December 4, the government would hold an emergency meeting on December 5 to adopt the budget and table it in parliament.

The priorities in the 2009 budget would be the construction of Corridor 10, realisation of the contract with Fiat and ensuring exports of a billion euro a year, as well as active employment measure, Dinkić said.

He said that the first version of the draft budget did not envisage the implementation of the transitional trade agreement with the EU from January 1.

On December 3, Serbian news website B92 reported that calculations showed that implementation of the interim trade agreement in 2009 would mean a 150 million euro cut in revenue because of the reduction of customs on goods imported from the EU (customs revenues from the import of industrial products would be 130 million euro lower, while revenues on the import of agricultural goods would be down 20 million euro).

That shortfall should be offset by a rise in output, but it is certain now that owing to the negative effects of the world financial crisis, production growth will be less than forecast at the time the government decided to begin to implement the Interim Trade Agreement unilaterally, B92 said.