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Hotels to be sold to cover 2010 budget gap? - 22.09.2009

WAT According to fiscal projections, which will be discussed at today's session, expenditure will be slightly lower than this year, with deficit lowered from HRK 10bn to HRK 7.5bn, Novi list writes.
Crisis tax, higher VAT and mobile phone excises are expected to bring almost HRK 3bn more than this year or some HRK 4.3bn, while a rise in unemployment should cut income tax revenues by HRK 1.2bn.
However, state spending must be reduced as about HRK 1bn worth interest rates need to be repaid in 2010 and HRK 750mn needs to be paid to pensioners.
The government is currently considering cuts in priviledged pensions, which would save some HRK 2bn at best. Therefore, it is speculated that the rest could be earned in privatization, primarily through sale of hotels.
Privatization revenues would be an answer to government's troubles in case banks should activate HRK 8.2bn worth state guarantees to six shipyards, currently in the process of privatization.
Also, EUR 500mn worth loan is due for repayment in February, a month or two later the government needs to repay HRK 3bn to home banks and another EUR 500mn need to be settled towards foreign creditors mid-year.