Belgrade, September 6, 2001 - Electricity prices will increase on September 1 by 15%, and the Serbian government is preparing a package of social aid measures to help vulnerable families who cannot pay for public services, announced Serbian Prime Minister Zoran Djindjic, after a meeting with the managing board of "Kolubara" in the Serbian government building, adding that this autumn would be the period of the highest levels of public aid.

- Instead of using subsidies, we will introduce market-based prices gradually - said Djindjic, stressing that only bread and electricity had subsidized prices.

The Prime Minister pointed out that, apart from today's announced price hikes, there would be no further price increases by the time the heating season begins, and that 40% of the planned repairs to EPS facilities had been completed.

-We have not made dramatic repairs to the electric power system because a huge amount of money is required for the work. Our electric power system is at great risk. Whether or not there will be electricity restrictions depends on the situation, but there will be no systematic restrictions - said Djindjic, adding that there was a great need for financial injections for import of electric power.

The International Monetary Fund (IMF) has requested that electricity prices be increased by 46%, in order to achieve market-level prices. The Serbian Prime Minister described their request as unrealistic and said he asked that the IMF's request be withdrawn.

According to Djindjic, Serbia imports 11% of electricity, while 8% of electricity produced by Electric Power Industry of Serbia (EPS) is stolen.

Commenting on protests by metal workers in front of the Serbian government building, Djindjic said the Government was ready to talk with trade unions if "they have ideas for solutions to problems, and are not just seeking money from the budget."

- Everybody has the right to express dissatisfaction, but no solutions come from this. The crisis in the metal complex is structural, not political, and we need programmes and projects to bring about solutions - said Djindjic.

He added that the Government had several programmes, among which was credit to metals producers through the Development Fund, with the precondition of financial support being that the firm had its own production capacities and market.

Commenting on the demands of Kolubara and EPS workers who are dissatisfied with the Decree on salaries in public enterprises, Djindjic said that the commission made up of members of the Government, trade unions and the managing board of EPS would prepare a model for stimulating worker productivity.

Agreement was also reached on payment of retirement bonus pay at both EPS and Kolubara, which had been cut off due to a lack of available resources.