Political uncertainty translates into further financial troubles for 2004 budget

A weak budget draft, its late and improper presentation, coupled with doubts over the will to carry through cuts in public expenditures, as well as irresponsible statements from politicians have caused increased irritability on financial market. Due to this, it is very likely that interest rates might go up and in this way increase the cost of servicing the public debt by as much as zł. 2 billion in 2004. "This is the cost of delays in taking important decision," Dariusz Rosati, a member of the Monetary Policy Council said on Wednesday. Moreover, the budget will lose even more due to a weakening złoty, which was caused mostly by fiscal uncertainty and the sale of T-bonds by foreign investors. This means that the state debt now amounts to $30 billion, while the cost of servicing it increased by a further $1 billion. "The best solution would be to amend the 2004 budget, but this is very unlikely," said Maciej Reluga, BZ WBK's chief economist. (Rzeczpospolita, pp. A1, B1) M.M.