PRIME MINISTER: WE MUSTN'T BURDEN YOUNG GENERATIONS WITH DEBTS

ZAGREB, Dec 6 (Hina) - Next year's budget, worth 49.67 billion kuna, is realistic but stretched to the utmost, however, we cannot spend more than we earn because we would burden young generations with debts and jeopardise their prospects, Prime Minister Ivica Racan told the House of Representatives on Wednesday. The Sabor's lower house is today debating a draft state budget for 2001, which has been reduced in relation to the original proposal to 49.67 billion kuna. Racan said he was encouraged by the results of reforms implemented so far, which he said show that winds of change are blowing and that a turnabout is being made from negative economic trends. This year's expected growth of Gross Domestic Product is three percent, exports are expected to increase by six percent and since the government has paid most of the inherited debts, liquidity in the economy has improved significantly, Racan said. The level of unemployment is still worryingly high but the prime minister expects the number of unemployed to decrease next year. Increasing employment and accelerating economic growth are the main goals of the government's economic policy, he said. In order to achieve them, one must cut the public spending because the budget must not be financed with new debts and inflation, Racan said. Therefore, we are reducing some social rights and for that reason we are being slammed for social insensitivity. However, if the parliament has better solutions as to the segments in which the public spending can be cut, the government will not reduce social rights, Racan said. We are facing difficult tasks and reforms in many sectors because the state is still unbearably expensive. In order to encourage further development and create better conditions for citizens, we must reduce the public spending, he said. Finance Minister Mate Crkvenac said the budget was oriented primarily toward relieving the economy of burdens and development, which includes the stimulation of exports, agriculture, tourism, shipbuilding industry and small and medium-sized businesses. Although it envisages the reduction of some social rights, the draft budget is also a welfare budget because it envisages the payment of the state debt to pensioners and secures funds for child allowances, he said. The budget is restrictive also toward civil servants because it reduces their wage budget by ten percent. However, this should result not in the reduction of individual salaries but in job improvement. Next year's budget is nominally lower than this year's. It is restrictive and stretched but in the long run it is in Croatia's interest, Crkvenac said. (hina) rml