Macedonia Adopts Budget Cut

69 legislators in the 120 seat parliament voted for the proposed cut, while 14 were against in the vote held late Wednesday.
 
The projected gross savings from the cuts amounts to some €130 million, which is 3.2 per cent of the total budget. The biggest cut was made in the area of capital investment- €85 million- as well as in goods and services.

More funds will be allocated to health and social aid sectors, as well as pension funds, whereas the rebalance does not contain proposals for increases in taxes or reductions of salaries and pensions.
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The budget rebalance stipulates that the budget deficit must be 2.5 per cent of GDP, as was the guideline previously.

The government also saved money on other expenditures as part of the new cut. National per diem payments for state employees are annulled, while international per diem payments are reduced by 30 per cent until the end of 2011.
 
The salaries of the prime minister, ministers and deputy-ministers, as well as elected state officials will be reduced by 10 per cent in the same period.

During the debate, opposition deputies criticized the measures to balance the budget, claiming it would seriously affect the citizens and the economy.

The government majority in the parliament, led by the centre-right VMRO DPMNE party, defended the cut, saying it is crucial to adjust public spending in times of crisis and in light of reduced budget revenues in early 2010.

Opposition MPs were not convinced that the cut will be sufficient, nor did they find the new restrictions to be well allocated. They said that the cut should have been at least double in size in order to help the economy and citizens.

They argued that large funds from capital investments have been cut from important projects like roads and other infrastructure while at the same time unproductive projects like the government revamp of the capital, dubbed “Skopje 2014”, saw only minor reductions in spending.