Responses of the Serbian Welfare State to the Global Economic Crisis

Abstract

The global financial crisis has revealed serious weaknesses in Serbia's' economic and social systems. Short term measures to mitigate the negative effects of the crisis were only partially successful. In 2010, the welfare state has been marked as one of the priority areas of middle term state reforms, but so far, there have been no radical cuts, even though it is uncertain, whether this situation is sustainable. The main directions of reform, have been, and will be, directed by deficit budgetary funds (i.e. the need to reduce the share of social transfers within the GDP and their sustainability). Even though accessibility and quality have been declared as equally important reform objectives, effects of reforms point to fiscal constraints as the most important challenge. Austerity measures, characteristic of the Serbian welfare state, during the crisis are not only linked to the crisis, but may be viewed as a part of the declining role of the state after the breakdown of socialism in the 1990s. Therefore, it is sometimes hard to distinguish between the measures as a reaction to the crisis and those contemplated prior to the crisis, because their aims seem rather compatible.