Keeping an eye on the kitty

Crucially, the government also wants to move the distribution of EU funds from various institutions to the budget, because it says more than zł.200 million is circulating without the proper supervision. The Ministry will also simplify rules for financing projects and will significantly raise local authorities' capacity to take loans from the current level of 60 percent of their budget.

The reforms are the brainchild of Finance Minister Zyta Gilowska, who has been working on the proposals since her time with Civic Platform. "During the next two years we will be able to save up to zł.10 billion thanks to the consolidation of budgetary resources. This amount of money equals one percent of GDP and it will help in the creation of a 'cheap state' idea," Minster Gilowska said during a press conference. "Thanks to such savings, our public finance deficit would drop significantly, and that's what the EU requires."

The Finance Minister also wants the state to dispose of several designated funds, such as the Environment and Water Management Protection Fund and the Rural Grounds Protection Fund. These resources are to be transferred to local authorities' budgets. Gilowska, with the support of the Prime Minister, has always been very eager to liquidate these funds, as she says they are open to corruption and the Ministry has found it difficult to track their expenditure. The Finance Minister hopes that the public finance reforms will come into effect by 2007.