GOVT WILL SUPPORT ONLY GUARANTEED BUDGET

ZAGREB, Nov 15 (Hina) - Croatian Prime Minister Ivica Racan on Wednesday reiterated the government was open to any proposal regarding the re-allocation of funds within the proposed budget but it was not open to any increases of the set budgetary limit (of 50.855 billion kuna). "The state budget cannot be increased because it is not possible to cover increases even hypothetically. We will be grateful for any well-argumented proposal for cutting expenses," Racan said following today's meeting of a coordinating body of the ruling six- party coalition. The government can guarantee the proposed budget on condition that capital revenues are realised successfully and that the planned reform activities in some branches are completed. "If we succeed in that sense, the budget will be realistic. Increasing spending without increasing revenues is not possible," he said. "If someone thinks that it is possible to increase spending without real revenues, and we (the Government) believe it is not possible, than we will face the consequences," Racan said, adding the government would resign should the budget not be kept within its limits. We will not be responsible for a budget which is not covered, Racan said calling on all factors in Croatia's political life to approach this issue in a responsible manner. As regards the operation of the coalition, it has been agreed that a discussion on this issue will be held so that one could decide whether it is necessary to work some more on the basic agreement on cooperation between the coalition partners, Racan said. (hina) jn rml