Global Crisis 'Fuelling Serbia's Black Economy'

Speaking at an economic conference in Belgrade on Wednesday, officials said Serbia was supposed to combat its black economy, which is estimated to employ between 650,000 and 700,000 people, as part of its steps towards joining the EU.

But Cedanka Andric, the Secretary of the Social and Economic Council of Serbia, told delegates: "The share of the black economy in Serbia's GDP is about 35 to 40 per cent - well above the EU average."

The percentage had also risen to about 20 per cent in EU countries due to the crisis, she added at the conference entitled: Construction of the Project to Reduce the Informal Economy in Serbia.

Dragana Petkovic-Gajic, a trade union representative, said: "Every year in Serbia, some four million euros are exchanged within the informal economy, which is about 30 per cent of total annual trade in goods and services in Serbia."

The informal economy, where citizens seek to evade taxation on their economic activity, employs mainly young people, she added.

Radmila Bukumiric Katic, the Assistant Minister of Labour and Social Policy, said the introduction of new flexible forms of work and reduction of labour costs would contribute to reducing the black economy.

She noted that preparations for changes in labour laws were under way but could not specify when they would be adopted.

Employers who employ workers illegally are supposed to face penalties ranging from €4,000 to €10,000.

But the head of the country's Inspectorate of Labour, Radovan Ristanovic, said he could not remember any case over the last five years where someone had been fined those amounts.