Potential problems in financing the 2004 budget gap?

Financing the 2004 budget gap may prove more difficult than ever before as competing corporate issues, a weaker currency and low yields on T-bonds distract potential buyers. According to economists, next year the government may have to issue up to zł. 62 billion worth of bonds in order to finance the budget gap, but it will all depend on privatization revenues. In 2003, the Finance Ministry plans to issue bills worth around zł. 29 billion. The National Grid (PSE) is preparing to launch its own bonds amounting to zł. 14 billion, which will be used for paying off domestic power plants for breaking their long-term energy contracts. "We may face a public finance crisis. Then the złoty will get even weaker and this in turn will increase the unwillingness to invest in domestic T-bills," said Jarosław Bauc, former Finance Minister and current president of the pension fund PTE Skarbiec-Emerytura. (Parkiet, p. 1) M.M