Finance Minister's draft budget and "accounting tricks" not pleasing anyone

On Wednesday Finance Minister Jaroslaw Bauc, in his 2001 draft-budget, proposed keeping the budget deficit at 1.6% of GDP, down from this year's estimated 2%. Some analysts are saying the proposed budget is not tight enough to allow the National Bank of Poland Bank (NBP) to reduce Poland's high interest-rates, now ranging between 17.5% and 21.5%. "The budget proposal is disappointing. The degree of tightness is modest. Perhaps there is none," said a Merrill Lynch senior analyst in London. Bauc's proposals have also disappointed his cabinet colleagues, some of whom were looking for a larger deficit in the hope that the extra money would be a vote-winner in next year's election. Former Finance Minister Leszek Balcerowicz said Bauc had disguised his intention to loosen fiscal policy by relaxing this year's policies in order to make next year's fiscal policy look like financial stringency. He also says Bauc has used "accounting tricks" to show next year 's deficit as 1.7% of GDP when it should actually be 2.6%. One of these "tricks" is the inclusion of unrealistically high expectations of windfall revenue from the sale of third-generation mobile-phone licenses (UMTS) which has not yet been realized. The budget has still to be voted on. (Reuters) M.M.