Economy minister says budget deficit may increase by up to zl.7 billion

This year's budget deficit may safely be increased by between zl.5 billion and zl.7 billion, economy minister Janusz Steinhoff said on Saturday. Speaking in Katowice, he said that the decision would require additional detailed analysis, since demand for treasury bills and bonds is limited. Steinhoff also said that some spending cuts will be necessary, but they must not hurt social policy or workers' earnings financed from the central budget. Meanwhile, the president's economic adviser, Marek Belka, warned on Saturday that because of the failure of the government's ambitious economic policy, the country's financial situation is on the verge of collapse. Belka, tipped to be the next finance minister if, as expected, the SLD win the September elections, went on to say that in his opinion, the budget deficit is not zl.7.5 billion as economy ministry representatives have stated officially, but at least zl.11 billion. He added that the next two years would be extremely difficult. (Gazeta Wyborcza, p. 24, Rzeczpospolita, p. B3) M.K.