Ladies and gentlemen, today I bring you the best act of "sticking it to the EU and the IMF" for 2012. So those Greeks may have caved in to the IMF-ECB-EU troika for the umpteenth time, but it appears those only aspiring to join the EU are keen on Sticking It To The Man. Having told the IMF to take the idea of central bank independence and shove it despite badly needing funds, the Serbian government has come up with yet another brilliantly over-the-top ploy sure to guarantee emergency lenders loathe it even more (if not to actually get it any money).
Let me first give you the IMF's 20 November depiction of Serbia as discussions continue for an "IMF-supported program":
The Serbian economy faces numerous challenges. The fiscal deficit has widened sharply in 2012 relative to the original budget and to last year’s level, and is unsustainably large. Public debt has also increased significantly. In addition, the external debt burden is high, inflation is volatile, and unemployment is elevated. Economic activity has significantly weakened amid a difficult global environment. GDP is expected to contract by about 2 percent this year, with a modest recovery expected next year. Inflation has risen sharply into double digits.In other words, Serbia is broke. Awhile ago, I discussed how Serbian football coaches were its finest exports. Rest assured that Serbia is a proud footballing nation. Remember, Red Star Belgrade were European champions in the not-so-distant past. What the heck do these have to do with each other? Well, the Serbian government is apparently keen on addressing its widening fiscal deficit by--get this--bailing out its money-losing football teams [!] Aside from Red Star Belgrade, Partizan is also to receive a bailout:
The Serbian government will help refinance debt-ridden soccer giants Red Star and Partizan Belgrade and have appointed managers to temporarily run Red Star, the Balkan country's deputy Prime Minister Aleksandar Vucic said. Vucic had called a press conference in the early hours of Wednesday to announce the refinancing after Red Star chairman Vladan Lukic resigned on Tuesday saying he was exhausted from struggling with managing the club's debt of about 60 million euros ($76.27 million) and from a poor run of results...To me, this is beyond belief on any number of levels. If the situation is so dire for the Serbian government itself, why must it be compelled to bail out even less financially fit entities alike elite football clubs? And second, having annoyed the IMF already by curbing central bank independence, what does it say about being fiscally responsible when the state's chief priority is apparently the bailout of football clubs...and to appoint managers for the clubs besides?
"I spoke to the club's legends and leadership on the behalf of Serbia's government and we have agreed to (refinance) Red Star's and Partizan's debts because the state cannot allow these two clubs to go under," Vucic said. "The situation is so dire it's beyond comment and we will do what we can to help out Red Star and Partizan."
This will be pretty hard to top in the offensive and frivolous waste of money department short of erecting gold-plated statues of Serbian war criminals, but you never know what will happen if I give them ideas...