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The long-awaited state budget lowers the salaries for state employees but provides enough cash for the country generally to function, the finance minister says.
The much delayed 2012 state budget, worth some 485 million euro, was approved by Bosnia's state government, the Council of Ministers, at a session on April 18 in Sarajevo.
Nikola Spiric, the Finance Minister, said after the meeting that the new budget was restrictive but provided enough money for the state to function.
He said the budget incorporated a government decision to lower state servants' salaries by around 4.5 per cent.
“This budget is sufficient. I want to stress that not a single function of the country on its Euro-Atlantic path will be endangered,” Spiric said.
“We spent last year on 'temporary financing' with 463 million euro and since this year we have 485 million, I am sure we will manage,” he added.
The budget proposal, which has still to be approved by the State Parliament, includes money for the 2013 census, the 2012 local elections and for building and equipping new EU-standard border crossings with Croatia, which joins the EU next year.
Bosnia's state government has been running its institutions on the basis of the so-called temporary financing since 2010.
The EU delegation in Sarajevo welcomed the budget adoption, repeating that it was one of Bosnia's obligations in the broader process of stabilization and association.
“These [obligations] include setting up new institutions required for EU-related commitments, preparing for the 2013 population census and preparing for the consequences of Croatia's accession to the EU,” the delegation stated on Wednesday.
Prime Minister Vjekoslav Bevanda told the press conference that the budget also included around 10 million euro to pay off former soldiers who have been protesting over their unpaid pensions in front of the government building for almost a month.
Bosnia's state parliament changed the law on the armed forces, obliging men over 35 to retire and promising them pensions if they did so. The aim was to rejuvenate the army but the money for the pensions was never allocated.
The ex-soldiers are from all three formations that fought in the 1992-5 war and who afterwards joined Bosnia's united armed forces.
Finance Minister says 2012 budget will be tough - but will include money for local elections, a census in 2013, new border crossings and ex-soldiers' pensions.
To keep its reform policy credible for investors, the government must find common ground with the IMF and look for a new arrangement, experts say.