Serbia has announced plans to cut public sector wages by as much as a quarter, as part of wide-ranging austerity measures.
The reform package also includes raising taxes and slashing subsidies for loss-making companies.
Finance Minister Lazar Krstic said Serbia would be bankrupt within two years if it did not take action now.
The country is mired in a deep recession, with 25% of the workforce unemployed.
Mr Krstic unveiled the measures during an open session of government in Belgrade.
“Even though these reforms, which some people would say are 20 years overdue – I’d say they’re at least 10 years overdue – we can carry them out in a responsible way,” he said.
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