Serbia's Temporary Financing Need Not Be a Crisis if It Is Short and Open

Serbia will very probably enter 2027 without an adopted budget. The new assembly meets on 17 November, a government still has to be formed, and parliament must vote on the budget by 20 December. The caretaker finance minister has said the budget is a matter for those who come next. That is not a scandal; it is what happens when power changes hands late in the year.

A legal safety net, not a plan

Temporary financing exists for exactly this situation. Salaries, pensions and debt service continue; spending is capped at a quarter of last year's budget for each quarter; new state guarantees and project loans are frozen. Serbia used it in 2007 and survived. Those warning of chaos overstate the risk. But those who treat it as costless understate it: investors, contractors and municipalities plan around budgets, and a regime built to keep the lights on cannot fund decisions.

Why speed matters

The longer the provisional regime lasts, the more it becomes a policy by default. Last year's priorities, including large capital projects the new majority wants to review, are carried forward simply because nothing replaces them. The Serbian Chamber of Commerce has already warned that uncertainty can delay investment at a time when construction and transport are slowing. A budget adopted in the first quarter would limit that damage. One delayed to mid-year, as in 2007, would not.

What both sides owe the public

The outgoing government can help by publishing the draft it was required to prepare and the latest figures on revenues, arrears and the obligations of state companies such as EPS, which is paying heavily for imported power. The incoming majority, which has promised to comb through Expo and other costs, should set out a timetable for its own budget and explain which spending it will pause and why. Both sides say they want stable public finances. Temporary financing gives them a few months to prove it; it should not become a place to hide.