Negotiations between Serbia and an International Monetary Fund (IMF) delegation began in Belgrade on March 16 2009 on a new stand-by arrangement to allow for three billion euro in funding to maintain Serbia's macroeconomic stability.

According to the Serbian government website, the Serbian government's platform for negotiations is based on a larger budget deficit and reduced public spending.

The new arrangement, required to support Serbia's worsening balance of payments and currency, is being negotiated is to replace an existing 402.5 million euro arrangement as a precautionary measure.

The IMF delegation is headed by chief of the IMF mission Albert Jagger and the Serbia delegation is led by governor of the National Bank of Serbia Radovan Jelasic, minister of economy and regional development Mladjan Dinkic and finance minister Diana Dragutinovic.

Deputy prime minister for EU Integration Bozidar Djelic expressed confidence that the Serbian government and the IMF would agree on arrangements for 2009 and 2010 by March 27.

Djelic said that it was of great importance for Serbia to reach a favourable agreement with the IMF.

He said that the IMF expects that world's economy will get even worse and that Eastern and Central Europe's economic growth will fall by three per cent.

Djelic said that the Serbian economy would stagnate this year, but Serbia was not in recession.

Serbian daily Blic, quoting Dinkic, said that Serbia would most likely seek from the IMF a two-year standby arrangement worth three billion euro, two billion to be used in the current year and one billion for the year 2010.

That should be enough for Serbia to keep its national currency stable, Blic said.