Yale diplomat Lazar Krstic has accepted the proposal of Serb deputy PM and leader of the country's largest SNS party Aleksandar Vucic to take over the finance minister post in the new reshuffled government, daily Blic reported, quoting unofficial information.

According the report, the agreement is still preliminary and Krstic will give his official answer to Vucic shortly.

Krstic, who works for the New York office of consultancy firm McKinsey, will succeed at the finance ministry Mladjan Dinkic, whose United Regions of Serbia (URS) party will be excluded from the governing coalition after the reshuffle.

Krstic will reportedly take over the ministry and continue implementing the current action plan of the government - but in the autumn he will start preparing new measures that would allow Serbia to enjoy a stable financial system in the coming period.

He arrived in Serbia earlier this week to meet Vucic.

KRSTIC'S VISION FOR SERBIA'S ECONOMIC CHALLENGES

Krstic, 29, was born in the Serbian town of Nis and graduated in mathematics, economy, politics and ethics at the Yale University before joining McKinsey, according to Blic. The report describes him as "a young genius", pointing out he has won many awards in mathematics and political economy.

According to a report of daily Kurir, Krstic has sent his working plan as a future minister to Vucic, seeking strong political support in the implementation of six key issues. The priority among them is the zero tolerance for tax evaders, meaning all in Serbia will have to pay their taxes, including the tycoons who have been evading tax payments for years enjoying a political protection.

Krstic also allegedly suggests introducing progressive taxation so that the richest pay bigger taxes. He offers as well the creation of special offices to help foreign investors draft quickly and smoothly all documents they need to invest in the country, the report says. Other urgent issues include solving the problems of companies in insolvency and under restructuring, as well as finding strategic partners for state-owned firms.

Krstic reportedly considers the unemployment, the lack of tax discipline, the complicated procedures and the corruption as Serbia's biggest challenges.

RESHUFFLING THE POLITICAL CARDS

The ousting of current finance and economy minister Dinkic as part of the cabinet restructuring was proposed by PM Ivica Dacic and his Socialist SPS party. Moreover, Dacic conditioned the further participation of SPS in the coalition on the exit of Dinkic and URS from it. Vucic said he intended to continue working with both partners but eventually decided to accept Dacic's condition and throw away Dinkic in order to prevent early elections only a year after the previous ones held in May 2012.

The departure of Dinkic has been met with caution by international lenders and investors, whose trust he enjoys after being present in Serbia's political and financial sphere as a central bank head or a finance or/and economy chief regularly over the past decade.

The World Bank for example froze the planned USD 200mn budget support loan Serbia needs this year, saying its approval will be certainly delayed by Dinkic's departure as the Bank waits to see what will be the goals of his successor.

Yields on newly issued government debt also rose to a four-month high this week, according to Bloomberg data, as the Serbian government coalition prepares to reshape by end-August and is still to confirm the name of the new finance minister.