The new Finance Minister's policies start to come under closer scrutiny

Yesterday's policy statement by the new Finance Minister Grzegorz Kolodko, were well received by the market, resulting in the appreciation of the zloty by about 1%. However, economists are now becoming skeptical of his declaration that next year's budget deficit will be lower than zl. 43 billion. Deputy Finance Minister Halina Wasilewska-Trenker said that budget expenditures would not be limited, which, if true, means that taxes will have to be increased to finance the gap. "This is exactly the opposite of what should be done in the present situation. This is the weakest point of Kolodko's plan," said an analyst with CA IB. Other analysts have remarked that Kolodko's strategy contains a basic contradiction. On the one hand he says that he will help indebted companies, but on the other hand he says he will cut the budget deficit. Such policies do not equate with each other. The minister's policies will be examined during the two-day meeting of the Monetary Policy Council which starts today. (Zycie, pp. 1,7; Prawo i Gospodarka, pp. 1, 6) A.D.