Sejm passes spending cuts key to 2001 budget with Freedom Union help

The Solidarity Election Action (AWS) government won a key battle on Friday when parliament passed its package of zl.3 billion spending cuts, essential to next year's budget draft. Analysts said the passage of budget-tightening bills could also encourage the Monetary Policy Council (RPP) to cut interest rates in the future. The biggest saving of zl.1.8 billion was achieved by amending the Teachers Charter. The government was able to pass the bills in large part due to support from the Freedom Union (UW), with whom AWS was said to have signed a wide-ranging cooperation deal. In return, the ruling alliance is reported to have agreed to back former UW head Leszek Balcerowicz for the post of National Bank of Poland (NBP) president. The deputies also passed legislation which will increase the health insurance premium from the present level of 7.5% of salary, to 7.75, resulting in zl.800 million extra for the health service. (Reuters, Rzeczpospolita, Dec.16-17, p.A1, A2 ) P.J.