Salaries in the Serbian power company (EPS) should be frozen this and next year because their increase by 10 per cent would mean that a 10-20 per cent increase in electricity prices for both households and businesses would be insufficient to cover the current losses, Serbia’s Fiscal Council said.

In its latest analysis of the energy problem the Council found that an increase of the already high salaries in EPS would mean that the sacrifice of the people and the economy is not only unjustified but also in vain, the daily Politika reported.

Control of salaries and of the number of employees is the main measure for the company’s recovery, the Council said, adding that the salary costs are by far the company’s largest expense item.

“Excess employees need to be clearly identified and the process of their targeted dismissal launched instead of their voluntary departure with generous severance pay as before,” the Council said, adding that, according to its estimates, at least 10 per cent of the EPS workforce is redundant.