Aleksandar Vucic, the Serbian Prime Minister, on Wednesday said pensions and salaries in the public sector over 25,000 dinars [€211] a month will be cut by between 3 and 20 per cent as of October.

“The largest number of pensioners, 60.2 per cent of them, will not be affected,” Vucic told Serbian public broadcaster RTS.

Pensions worth between €211 – €256 will be reduced by 3.1 per cent, those between €256 and €295 will be cut by 6.2 per cent, while pensions over €337 will be cut per 9 per cent. Those higher than €844 will be reduced by 15-16 per cent.

Public sector salaries over €211 will be reduced by 10-10.5 per cent, while those higher than €844 will be reduced by 20 per cent.

“Salaries in the public sector are about 40 per cent higher than in the private sector, which is actually supporting the public sector,” Vucic stated, explaining the rationale for the cuts.

Other austerity measures that the government is planning include curbs to the “grey” economy, cuts to subsidies to public companies, support for private enterprises, staff cuts in the public administration and cuts to spending on goods and services.

Serbia expects to save about €700 million annually with this austerity package.

“When it comes to incomes – we expect more investments,” Vucic said, adding that the growth could be marked in 2015, while Serbia hoped to emerge from crisis in 2016.

According to the Prime Minister, the country is “miles away” from bankruptcy.

“Serbia is liquid and we have money to sustain the system until April, without new loans,” he stated.