State Support For Enterprises To Be Slashed In Belarus

Lukashenka has to overhaul the budget that has proved unrealistic.

The draft law On Measures For Ensuring Budget’s Balance has been considered at the consultations with Lukashenka today, tut.by informs.

“The government has introduced a draft presidential decree, which suggests reducing money [from the central state budget] spent on compensating for the interest payments on loans taken out by enterprises, – Lukashenka said. – How much are we going to save by that? Is the game worth the candle? Who will bear this burden? Enterprises or banks? I’d like to see a normal compromise in this matter.”

By the decree №78 the government was ordered to take exhaustive measures to optimize and cut expenses of the budget, prepared in a different economic situation, in particular, proceeding from the oil cost of 80 dollars per barrel. Among the proposed measures there is downsizing state aid in the form of compensating for the interest payments on loans taken out by enterprises in accordance with state programmes. It had been offered to reduce the compensation by 2 per cent, with an adequate increase of the burden of repaying credits for credit users.

As the result of the consultations, Lukashenka ordered to refine the draft law, so that not only borrowers, representatives of the real sector of economy, but also banks would bear the burden caused by the reduced state support.

At present state support is provided to Belarusian enterprises primarily in the form of compensations for interest payments on loans. The compensations vary from half of the refinancing rate to 100% of the refinancing rate, which now stands at 22% per annum. If state support is reduced by two percentage points, the move will not drastically affect the economy of Belarusian enterprises, the Finance Minister Uladzimir Amaryn is convinced.

On the whole, the draft presidential decree has been prepared for the sake of reducing budget spending. The implementation of the measures will allow reducing expenses of the central state budget by Br400 billion in 2016 and by Br500 billion in 2017.