MP'S SAY THEY WON'T ENDORSE REPORT ON 1998 BUDGET EXECUTION

ZAGREB, June 11 (Hina) - During a discussion on a report on the execution of the 1998 state budget on Friday, members of the Croatian National Sabor's House of Representatives reached an almost unanimous agreement on the need for users of the state budget to spend budgetary funds rationally. It is necessary to efficiently control the spending of the state money, otherwise the internal debt could continue growing, resulting with major inflation before the end of this year, Opposition representatives said, announcing that they would not endorse the report. Djuro Njavro of the Croatian Democratic Union (HDZ) agreed to the need for financial discipline and increased control of spending of the state money. The Croatian Social-Liberal Party (HSLS) will not endorse the report because it does not state the amount of the public debt, nor how much money has been spent. The report looks like the final financial statement of a shady export-import company which only has a phone, a fax machine, several accounts and a very smart accountant, said HSLS's Hrvoje Kraljevic. Ante Tukic (Liberal Party, LS) said 1998 had seen an "explosion of spending" in Croatian ministries. One reason for that is an atmosphere of euphoria created after last year's budgetary revision and an increase in revenue from Value Added Tax, which prompted unreasonable spending. The biggest mistake was made when the Sabor adopted the budget revision and when "like drunk millionaires we spent seven billion kuna", said Marinko Filipovic of the Croatian Peasants' Party (HSS). Zeljka Antunovic (Social Democratic Party, SDP) said the section of the report on illiquidity failed to mention that it was the state who caused illiquidity by buying goods although there was not enough money in the budget. The state also issued guarantees far beyond the limit determined by the Sabor. In 1998, guarantees could be issued up to the amount of US$486.1 million with US$10.4 million for the Croatian Bank for Reconstruction and Development, but the state issued additional guarantees amounting to about US$133 million above the allowed amount, said Damir Kajin of the Istrian Democratic Assembly (IDS). Some MPs estimated that the economic crisis would get worse in 1999, causing decreased living standards and growing unemployment. HDZ's Njavro, however, said that, although there had been an increase in unemployment of 18.6 per cent in 1998, salaries in economy rose by 12 per cent, as did the salaries of employees receiving salaries from the budget (27%). Pensions also increased considerably, he added. Opposition MPs presented several concrete objections to the policy of spending. The Foreign Ministry, said SDP's Antunovic, had spent about US$1.38 million more than was allowed, and there was rumour about the irrational spending of Croatian embassies and consulates. Marin Jurjevic (SDP) warned that the Culture Ministry had spent about US$10.8 million less, while Petar Zitnik (HSS) said the Employment Bureau had received much less funds than had been planned. And we spent US$83.6 million for the financial rehabilitation of the Dubrovacka Banka. It's a pity Kutle was not ousted from the HDZ earlier, maybe the money would have been saved, Zitnik said. Answering to objections that the amount of the public debt is not known, Deputy Finance Minister Mijo Jukic said the state's external debt in late January amounted to US$8.5 billion, of which the state's share was US$3.5 billion. In late April, the internal public debt amounted to 14.68 million kuna (US$2.03 million), Njavro said. (hina) rml