The Speaker of the National Assembly of the Republic of Serbia, Prof. Dr Slavica Djukic-Dejanovic, set Wednesday, 27 April 2011, starting at 11 a.m., as Day to respond to parliamentary questions regarding the current issue:

“Sale of Telekom Serbia – motives and consequences”, proposed by the Democratic Party of Serbia – Vojislav Kostunica Parliamentary Group.

In addition, the Serbian Radical Party Parliamentary Group proposed that the ministers and other dignitaries in the Government of the Republic of Serbia should respond to parliamentary questions on the current issue:

“Defining the policy of the Republic of Serbia toward the Autonomous Province of Kosovo-Metohija based on the results of the current talks between the Negotiating Team and provisional self-government institutions in Pristina”.

Prime Minister and Minister of Finance Mirko Cvetkovic, Minister of Kosovo-Metohija Goran Bogdanovic and head of the Serbian Negotiating Team Borislav Stefanovic responded to the questions.

Authorised representative, deputy Nanad Popovic, stressed that the Democratic Party of Serbia – Vojislav Kostunica Parliamentary Group categorically opposes the announced sale of Telekom Serbia as a strategic resource for the development of domestic economy. He stated that in most developed European countries the state remained the majority owner in such companies.

He added that Telekom employs a considerable number of domestic experts, from Serbian universities, domestic sub-contractors. The new owner would keep the scientific research in its own country, and Serbian experts would lose their jobs. Popovic stressed in 2010 that Telekom realised 17 billion RSD in profit, the highest in Europe and 30% higher than last year, and it invested 16 billion RSD in technical-technological work, so that the company does not lag behind in development.

Prime Minister Mirko Cvetkovic responded that all the arguments can be refuted and that Telekom’s profit could be used to expand the technical base considering that the company needed new investment.

Restating that he sees no reason to sell a company which does good business, deputy Nenad Popovic reminded that Telekom is a mixed-ownership company 20% of which is owned by the Greek company OTE, daughter company of the biggest European company Deutsche Telekom which already influences the management and selection of technical-technological solutions.

Prime Minister Cvetkovic said that the Government does not intend to finance budgetary needs from the sale of Telekom, but to reinvest the assets into industrial development and further technical improvement.

Deputy Ivan Andric asked how the money from the sale of Telekom would be utilized. Prime Minister Cvetkovic responded that part of the funds would be used to repay the company’s debts, and part would be invested in infrastructure.

Deputy Ivan Andric stressed the importance of an efficient use of the funds gained by the privatisation of Telekom and said that he expected the Government to prepare an expenditure plan for the funds.

Primer Minister Cvetkovic said that there is no fear of an unauthorised and inefficient expenditure of the funds gained by the sale of Telekom and that the public would be informed of it.

He added that the fiscal policy is under control and that Serbia would continue its negotiations with the International Monetary Fund and conclude a new arrangement in August or September.

Deputy Nenad Popovic restated that all global companies kept their scientific research within their countries and opined that the funds from the sale of Telekom should be invested into the company’s regional expansion.

Deputy Jorgovanka Tabakovic asked the Prime Minister whether the attempted privatisation was Serbia’s admission that state ownership in itself is not a problem, but that the state lacked the strength to establish efficient asset management mechanisms. She reminded that Telekom Austria, which is in majority state ownership, is a potential buyer of Telekom Serbia. Deeming that infrastructure should be exempted from the sale, Tabakovic reminded that in the 1997 sale of the company the state admitted its mistake, which it now repeats. She suggested that the company’s profit should not be transferred into the budget, but should be reinvested instead.

Prime Minister Cvetkovic said that the privatisation process of Telekom Serbia is transparent and the statements made by some politicians are not only incorrect but also detrimental to the state.

Deputy Jorgovanka Tabakovic reminded that the privatisation of Telekom was announced by a Government’s conclusion, without delineating the competences between the ministries of finance and economy and regional development in the process.

Prime Minister Cvetkovic stressed that the Government employed City bank financial advisor, a well-known consulting team, to conduct the privatisation process of Telekom.

Deputy Velimir Ilic asked why the tender application deadline had been extended, and Prime Minister Cvetkovic said that it was done at the suggestion of the financial adviser.

Reminding that after the 1997 privatisation of Telekom the money was used for “the purchase of electoral victory or social peace” and not infrastructure, deputy Bojan Djuric asked how much Telekom Serbia’s owed to other public companies. He also asked how the money from the privatisation of NIS was spent. Prime Minister Cvetkovic responded that part of the funds from the privatisation of NIS was transferred to AP Vojvodina, and part was used to finance outstanding loans and the current budget deficit. The funds from the sale of Telekom will be put into a special account and a plan will be made for their expenditure.

Deputy Jorgovanka Tabakovic asked in whose interest it was to privatise Telekom as the most profitable company in Serbia.

Prime Minister Cvetkovic said that if Telekom were profitable while in state ownership, then it would be even more profitable in private ownership, because it is in the best interest of the state to privatise all companies and raise their efficiency and with it the citizens’ living standard.

The Prime Minister said that Serbia’s budget is stable and this transaction has nothing to do with the current budget or the financing of the pre-election campaign.

Deputy Jorgovanka Tabakovic reminded that Telekom was not a state-owned company, but a join-stock company with 20% private capital. She said that hundreds of young people working in the company under contract and contributing to its development should gain full employment which does not necessitate privatisation.

Deputy Zoran Krasic deemed the topics set for the parliamentary questions day connected as two of the, according to him, best things in Serbia, Kosovo-Metohija and Telekom Serbia, are on sale. Serbia is caught in the gap between the provisions stipulated by the Constitution and its vital interests and the demands placed before it by the European Union, said Krasic.

Deputy Aleksandra Jankovic stressed that the Democratic Party of Serbia handed in a petition to the Government against the sale of Telekom signed by more than 100,000 citizens. The sale of the company is unconstitutional and contrary to the privatisation and concession laws. One of the bidders, Telekom Austria, she said, is under investigation for dubious business dealings, yet it stands to gain monopoly over this important infrastructural branch.

Prime Minister Cvetkovic said that the transaction was conducted in line with the constitution and legal system. NIS was privatised based on an international agreement and is now achieving good results, while the privatisation of Telekom is transparent, carried out via tender and it is expected to do even better business.

Deputy Nenad Popovic pointed out that NIS had not been sold but was part of the gas and oil agreement between Serbia and Russia. Telekom is in half-private ownership and should be gradually privatised with the initial public offer for another 20% so that it would remain state-owned.

Deputy Milan Lapcevic asked how did the Government approve the further negotiations with Telekom Austria if it did not meet the tender requirements i.e. did not offer 1.4 billion EUR to buy 51% of Telekom Serbia, plus investment. He believes that since the Austrian bidder did not meet the requirements the tender should be annulled instead of extending deadlines and continuing negotiations.

Prime Minister Cvetkovic responded that a lower offer for the sale of Telekom would not be accepted.

Deputy Dragan Stevanovic objected to the Prime Minister’s claims that the expert public supported the sale of Telekom when it did not and pointed out the dubious business dealings of the Government’s elected consultant City bank.

Deputy Zoran Sami opined that the Government should not have offered Telekom for sale if it had not received appropriate offers and, protecting the country’s reputation, it should have declared the tender unsuccessful and called a new tender.

Deputy Vladan Jeremic deemed the sale of Telekom an economically fatal decision in times of economic crisis and asked why the tender deadline was extended.

Prime Minister Cvetkovic said that Telecom France withdrew its offer, leaving Telekom Austria as the only remaining bidder.

Deputy Gordana Comic asked what would happen if the sale of Telekom failed and whether, if it was sold, it would have monopoly position in the sphere.

Prime Minister Cvetkovic said that if the sale of Telekom failed the Government would come up with a plan of further activities. About 22% of Telekom will be e distributed to the citizens and employees as free shares, which will significantly diminish the state’s profit. In addition, lower profit rates can be expected in the upcoming years. Telekom’s dominant position on the market is not in dispute, said the Prime Minister, and the Government will use legislation to counteract the misuse of monopoly.

Deputy Aleksandar Pejcic repeated the question whether the Government had firmly decided to sell Telekom Serbia and what its market price was.

The Prime Minister said that the Government had decided to sell the company for the minimal price offered which cannot be made public before 4 May - the tender deadline.

Deputy Lidija Dimitrijevic asked whether the Government had a plan or strategy to resolve the problems of the public companies which had been running a loss for years.

Prime Minister Cvetkovic said that Serbia has 550 public companies, most of which are local public companies. The Government is preparing strategies to counter the crisis for the ten big republic-level public companies.

The authorised representative of the submitters of the second topic for the parliamentary questions day, deputy Vjerica Radeta asked who authorised the Serbian Negotiating Team to negotiate the division of Kosovo which is contrary to the Constitution of Serbia which guarantees the Republic’s territorial integrity.

Vjerica Radeta objected to the fact that the discussion was not attended by President Boris Tadic who, she stressed, was the most called upon to respond to why Serbia entered negotiations with Pristina and gave up on SC Resolution 1244 and resolving the status issue, thus entering into recognising the illegitimate independence of Kosovo.

Head of the Serbian Negotiating Team Borislav Stefanovic stressed that the purpose of the talks between Belgrade and Pristina is not nor will it ever be the recognition of the unilaterally declared independence of Kosovo, but resolving specific problems faced by the citizens in the province. Speaking of the negotiations so far, he said that the Serbian negotiating team clearly follows the Serbian Constitution and all the National Assembly’s resolutions stating that Kosovo-Metohija is a constituent part of Serbia.

Stefanovic said that the negotiations address specific issues and the citizens’ problems, each of which contains the status issue on which Belgrade and Pristina have diametrically opposing positions.

The Government representative said that the Serbian side is ready to discuss all the issues, but that its readiness to talk does not mean that it would violate the Constitution.

Deputy Ivan Andric said that the Liberal Democratic Party supports the talks between Belgrade and Pristina convinced that they would contribute to normalise relations and enable the resolution of the vital problems of the citizens in the province.

Requesting the floor again, deputy Vjerica Radeta said that Stefanovic had not answered the question who authorised the Serbian Negotiating Team to negotiate the division of Kosovo. Also, she deemed that the negotiations are an indirect recognition of the self-declared state of Kosovo which is one of the conditions for Serbia’s accession to the European Union.

Head of the Serbian Negotiating Team Borislav Stefanovic stressed that the division of Kosovo is just one of the topics Belgrade is ready to discuss and the assembly’s resolution on Kosovo leaves enough room for it. We have not changed our interests and what we stand for, but only the tactical approach, said Stefanovic. He stressed that at the same time that does not mean we have given up on the position that Kosovo-Metohija is an integral part of Serbia and that our goal is to join the EU, and not impair the interests of Serbs in Kosovo-Metohija.

Deputy Vjerica Radeta responded that no resolution or other document adopted by the National Assembly opens up the option to divide Kosovo. Therefore talks about so-called practical solutions are used as a preamble to the recognition of the illegitimately declared independence of Kosovo.

Applauding the talks between Belgrade and Pristina, deputy Jovan Damjanovic pointed out the difficult position of the Roma in Kosovo. Government representative Stefanovic said that the dialogue was opened with the goal to resolve specific living problems of the Serbian people, as well as the members of the Roma and Albanian ethnic community, in line with European standards.

Deputy Riza Halimi pointed out the difficult living conditions of the citizens in the municipalities of Presevo, Bujanovac and Medvedja. He declared that the dialogue between Belgrade and Pristina should also address the non-recognition of diplomas gained at the University of Pristina in Serbia, non-recognition of the right to children’s allowance for children born after 1999 and years of service served on the territory of Kosovo before 1999.

Deputy Velimir Ilic asked why the Ministry of Kosovo-Metohija and other competent ministries were excluded from the negotiations headed by the Ministry of Foreign Affairs.

Minister of Kosovo-Metohija Goran Bogdanovic responded that the Ministry is doing its utmost to assist the negotiating team, adding that the other ministries do the same as well.

Deputy Slobodan Samardzic asked whether the negotiations between Belgrade and Serbia also include UN or UNMIK representatives and if not, why the Government agreed to it and who would in that case report to the UN on the negotiations.

The Head of the Negotiation Team said that, according to the UN General Assembly Resolution the participants in the dialogue are representatives of the Serbian Government and provisional institutions in Pristina, as well as EU representatives as intermediaries and hosts. On several occasions, our side requested an official presence of UN representatives and will insist on it in the negotiations.

Deputy Ljubomir Kragovic deemed it unacceptable that even after three rounds of negotiations between Belgrade and Pristina, the members of the Committee on Kosovo-Metohija have no information on the talks and how the policy established at the National Assembly was pursued.

Borislav Stefanovic said that the Committee was informed on the course of the negotiations and that the negotiating team had been appointed by the Serbian Government and that it represents the state’s interest.

Deputy Dragan Stevanovic repeated the question about the borders in which the Serbia would enter the European Union.

The Government representative said that Kosovo-Metohija is under international administration represented by UNMIK and EULEX and that Resolution 1244 is in force. Responding to the question from the European Commission’s Questionnaire, Serbia made it clear that Kosovo-Metohija is part of the state’s territory.

Deputy Gordana Comic asked whether the negotiating team had insight into the reports of non-governmental organisations on the condition of human rights in Kosovo-Metohija

Borislav Stefanovic said that in the preparations for dialogue, they use the reports of non-governmental organisations, media and civic associations so as to gain a more comprehensive view of the human rights conditions in Kosovo-Metohija.