MINISTER: BUDGET WILL BE NOMINALLY FROZEN AT THIS YEAR'S LEVEL

ZAGREB, Nov 30 (Hina) - The state budget for the next year should amount to just above 49 billion kuna (about DM12.69 billion), Finance Minister Mato Crkvenac told reporters on Thursday after the open part of today's government session. He added the budget had not been completely agreed on and would be discussed at the closed part of the session this afternoon. We are nominally almost "freezing" the budget and most expenditures will remain at this year's level, Crkvenac said, adding all social rights would be respected and the announced changes should not jeopardise anyone in relation to the proposed budget. The most important changes to the budget in relation to the original proposal include reducing current expenses by some 2.5 billion kuna, increasing revenues by some 1.27 billion kuna, and cutting revenues from privatisation from 12.5 to a realistic 8.5 billion kuna, Crkvenac said. Economies amounting to 2.5 billion kuna will be made in current and capital expenditures but also in the area of social rights. Economies in this area would amount to some 1.28 billion kuna, said Crkvenac, adding this did not include the revoking of social rights nor the reduction of individual salaries. However, some civil servants will go into retirement, some do not have the necessary qualifications, some have poor performance and overtime work will have to be reduced, he explained. Also, the most important aims of the budget are decreasing the state spending, stimulating exports and employment and disburdening the economy, Crkvenac said. Asked whether the changes to the budget were being made due to pressures by the International Monetary Fund (IMF), Crkvenac said there had been no pressures and reducing the budget was in Croatia's interest. It is in our interest to set a budget which will be as good as possible and in which current expenses would be covered by current revenues and not by loans and the selling off of property. It is also important to reduce the budgetary deficit by some four billion kuna or by 2.5 percentage points, he said. Although the budget has not been fully agreed on, Crkvenac believes there will be no major problems regarding that issue at today's closed session. He also believes the Croatian parliament will understand the government's efforts aimed at disburdening the economy, stimulating exports and employment, and cutting the state spending. I believe the budget will be received well by the parliament, he added. (hina) rml