Belgrade - Serbia, its stability already under much pressure, faces ad hoc financing as the deadline for the 2009 budget expired Tuesday amid endless obstruction by the opposition.

Parliament had until midnight on December 15 to adopt the budget for the coming year, but could not wade through filibustering by the ultra-nationalist opposition.

Finance Minister Diana Dragutinovic was quoted as saying that the government was "ready" to begin ad hoc financing, but also that the restrictive budget may yet be put in place in time.

"If we don't get the budget before the end of the year, ad hoc financing is the only remaining solution," she told reporters. "At least such a budget would save even more."

Last year the parliament passed the budget 11 days late, on December 26, while in 2007 the budget was passed in late June, after six months of financing by government decree.

The prospect of a similar scenario looms as the assembly was largely filibustered since it emerged from May 11 early polls and as dozens of important laws and initiatives remain blocked.

Among other problems, millions of Serbs - many of them planning trips during the winter school break - hold passports that will become obsolete on January 1 unless a law extends their validity by a year.

President Boris Tadic's ruling pro-European bloc has a razor-thin, volatile majority. Since the ultra-nationalist Serbian Radical Party (SRS) splintered, the ruling coalition faces a fragmented opposition.

The remaining SRS representatives lead the filibustering, with all 60 often demanding to speak on alleged violations of the parliament statute - they made the move 1,272 times in 60 days in session.

"Those stalling the assembly must realize we have serious issues on the agenda," said the floor leader of Tadic's Democratic Party, Nada Kolundzija.

The opposition says Prime Minister Mirko Cvetkovic's cabinet is itself to blame for the heat by which it is now being burnt, because it delivered the draft budget a month late, only a week ahead of the deadline.

"They whine over budget deadlines, but they presented the draft intolerably late," said Milos Aligrudic, the floor leader of former premier Vojislav Kostunica's Democratic Party of Serbia.

Cvetkovic's cabinet took a long time to fit the budget within spending constraints dictated by the International Monetary Fund (IMF), which is has offered provided a
516-million dollar standby arrangement.

The deal, a safeguard of Serbia's fragile macroeconomic stability, was struck in November after hard talks and is yet to be approved by the IMF - which delayed its decision on the arrangement by a month from mid-December.

Serbia must keep its deficit below 1.5 per cent of its gross domestic product in order to retain the rights to draw funds made available by the IMF.

The draft budget complied, with 0.9 per cent of the GDP to spare, but economists warned that it was set on overly optimistic revenue and inflation predictions.

With the national currency losing 10 per cent of its value against the benchmark euro in November and planned spending cuts, social unrest also appears as a serious threat to Cvetkovic.

Serbian teachers have already warned of a total stoppage unless they get better pay and a larger share in the budget. (dpa)