By Aleksandar Vasovic BELGRADE, Aug 27 (Reuters) - The Serbian government has adopted measures aimed at easing social discontent and defusing a wave of unrest by angry workers later this year, officials said Thursday. The government will compensate overdue payments to pension and health insurance funds for tens of thousands of workers from both private and socially-owned enterprises, accumulated between 2004 and June 2009, Prime Minister Mirko Cvetkovic said. It will also make one-off donations to the poorest workers and stiffen control of payment of mandatory benefits. "These measures will protect rights of employees, preserve jobs and ease dialogue between workers and their employers," Cvetkovic said at a press conference. "As of Jan. 1 2010, distribution of net wages will not be allowed unless employers pay benefits first," he said. According to official data, employers owe about 59 billion dinars (632 million euros) to state-run pension and health insurance funds, Cvetkovic said. The government also "moved to regulate criteria for organizing public gatherings", Cvetkovic said. He warned authorities would no longer allow "unlawful blockades" of infrastructure such as roads and railways. In recent months thousands of workers have staged protests over unpaid wages and benefits by blocking transport, sometimes clashing with police. "You can go on strike and protest but no one will be allowed to paralyse daily life," said Rasim Ljajic, minister for Labour and Social Care. All three major Serbian trade unions, with about one million members combined, warned they would stage protests unless government secures social benefits. The government's move came hours after police in neighbouring Croatia prevented farmers from blocking border crossings with Hungary, Serbia and Bosnia to demand higher prices for wheat and payment of overdue subsidies. IMF TALKS Serbia is seeking to overcome the effects of global crisis, including low budget revenues and falling demand. Earlier this week it started talks with an International Monetary Fund mission over further use of a 3 billion-euro standby loan agreed in May. The IMF has advised Serbia to consider a hike in value-added tax, but Cvetkovic's government has dismissed the idea, fearing it would kill off early signs of recovery, and proposed public sector reforms to cut spending. "Talks are ongoing on an expert level ... and I am optimistic about their outcome," Cvetkovic said. The government in Belgrade is trying to convince the lender to approve a higher fiscal deficit of 4.5 percent of GDP instead of the previously agreed 3.0 percent. Meeting IMF demands is vital for Serbia to win the second loan tranche of some 665 million euros, and also to keep other lenders, investors, and foreign banks in Serbia confident. (Reporting by Aleksandar Vasovic; editing by Andrew Roche)
