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ECONOMIC BRIEFS

FinMin rejects EXIM Bank's budget draft for 1999

At a February 11 meeting, the Finance Ministry did not approve a 1999 budget draft of the EXIM Bank submitted by the bank's management. Finance Ministry spokesman Peter Švec said that the ministry's main objection to the draft were the relatively high wages of EXIM Bank management.

"It is unacceptable that the bank's employees will keep their high wages despite the fact that the bank performs only a few of the pro-export activities expected of it," Švec declared. The state supplied the bank's equity by borrowing from relatively expensive sources, Švec explained, but this investment has not yet resulted in the intended support for Slovak exports. Thus, the ministry is demanding that the bank provide more complete information on the activities it is planning.

The ministry also criticized the high volume of time deposits - projected at 2 billion Sk - in the bank's assets (5.3 billion Sk in November last year), but no further details of the budget draft were made public.

EXIM Bank's board revealed last month some details of its 1999 budget draft. The bank indicated that it wanted to lower average monthly wages by 20% in comparison with 1998, to reduce expenditures for promotion by 61.5% and for travel by 56.7%.

The EXIM Bank was founded on July 1, 1997 to provide financing for exporters and to offer insurance against risky credits in importing countries like Russia. Its registered capital is 2.3 billion Sk, funds the bank obtained from the Slovak government based on a loan from the Japanese investment bank Nomura, amounting to $70 million.

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