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News 23 Jul 15

Macedonia Govt Proposes Biggest Ever Budget

With opposition MPs still absent, the government has proposed a budget rebalance which will result in Macedonia's biggest ever national budget in 25 years of independence.

Sinisa Jakov Marusic

Macedonian Finance Minister Zoran Stavreski | Photo by: gov.mk

Macedonia's government proposed a rebalanced budget that enters parliament procedure on Thursday, which foresees increased spending of €85 million and increased revenue of €58 million.

The total budget tops €3 billion, the biggest sum in 25 years of independence.

Finance Minister Zoran Stavreski said the rebalance was designed to boost development and added that Macedonia can afford to up spending because it collected more revenue in the first half of this year than it did last year.

"The budget has surprised us with favourable revenues rising by nearly 14 per cent compared to revenue in the first six months of 2014. It is more than we expected," Stavreski said.

The revision envisages a budget deficit of €327 million and lowers economic growth projections, cut from 4 to 3.5 per cent.

Government critics noted the odd timing of the rebalance, just one week after political leaders agreed to an internationally brokered deal on early elections in April 2016.

The change, proposed two months before the expected return of the opposition MPs to parliament, has raised doubts about the government's sincerity.

The opposition has boycotted parliament since last year's elections, accusing Prime Minister Nikola Gruevski of organizing fraudulent polls.

A former economic analyst at the Macedonian Central Bank, Branimir Jovanovic, said that while the increase in spending might be justified by higher revenue, the way the money was allocated showed the government aimed to splash money before the elections.

"What is worrying is that this budget is... a pre-election budget. Its goal is to buy as many votes it can amid a deep political crisis ahead of the elections next year," Jovanovic told Lokalno.mk

Looked at in detail, most of the money from the budget increase will go on unproductive expenses that will not generate development, he added, such as higher pay for police, tablets for students and new additions to the grand government-funded revamp of the capital.

The political crisis in Macedonia revolves around allegations that Gruevski's government has illegally orchestrated the surveillance of over 20,000 people. Gruevski, who has been in power since 2006, denies the claims.

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