CRO FIN MIN:GOVT WON'T ALLOW INCREASE OF STATE BUDGET - EXTENDED

ZAGREB, March 17 (Hina) - The Government will not allow an increase in the year 2000 state budget, Croatian Finance Minister Mato Crkvenac said at the end of a marathon discussion on the budget for this year held at the National Parliament's House of Representatives. "This (the enlargement) would be contrary to its programme," Crkvenac added. The Finance Minister announced that the Government would try to accept as many amendments as possible with the re-allocation of money within the budget's items. The draft budget amounts to 48.3 billion kuna (about US$6 billion). During the three-day-long debate members of the parliament proposed over 300 amendments, and the Government will consider them by the middle of next week, when the Sabor's lower house should vote on the draft budget. Crkvenac reiterated that the objective of this year's budget is to recover the economy by lessening tax burdens and by introducing other stimulating measures. The minister accentuated that one of the key issues for the concept of this budget was the payment of the 3.6 billion kuna ($450 million) debt, out of the total 9.33 billion kuna ($1.16 billion) of the government debt. Crkvenac announced the Government would introduce management of the debts and see how much they can be reduced and how many may be cancelled. Commenting on criticism by MPs that too little budget finances had been set aside for reconstruction, he said the Government was already securing international assistance of 50 million dollars. He stressed Croatia must use its last chance for assistance in reconstruction and there was reason for Croatia to receive the resources. The Government has envisaged 530 million kuna (US$66.25 million) for reconstruction this year, while 959 million kuna (about US$120 million) were used last year. Crkvenac replied to comments that the budget was regionally unbalanced saying such a criterion was difficult to be applied during the drafting process, but the Government would try a thought out policy which would support the specific development needs of all Croatian regions. Among measures being prepared by the Government with the aim of decentralisation, Crkvenac mentioned amendments to the law on financing local self-government, whose goal is to prevent local self-government from losing budget resources. He said the Government was hoping for a successful result of talks with unions on the announced five per cent decrease in salaries to users of the government budget. Crkvenac told MPs that "talks of a new kind, for which we do not know how they will end" were being held regarding the Istrian Epsilon highway. The Finance Minister announced the adoption of amendments by which subsidies and stimuli in agriculture would be paid directly to farmers in order to avoid embezzlement by mediators. He accepted the re-allocation of funds for science within budgetary items, so more resources could be directed towards development projects. Crkvenac commented on comments that the Government did not have an employment programme by asserting the Government had no intention of drawing one up, but will try to develop such an economic policy which would spur employment. The Lower House continues its session on Wednesday. (hina) mš lml jn