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Saakashvili is going to borrow money from the banks for social needs

2009-06-03 18:00

And now the banks are cheering the government's idea to resume the government obligation auction sales. According to Head of Supervisory Board of the Respublica Bank Lashi Papashvili, this financial tool is needed in the context of excessive liquidity in the banking system. In his opinion, the auction sales should be held regularly.

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Vice President of TVS-Bank Paata Gadzadze thinks that the government's decision will enable the banks to create more income-earning and ensured assets. "Investment in government stock is beneficial for any bank for it does not imply any risk", - he said. He also reminded that it will help the government replenish the budget, at the same time, avoiding the problems associated with social obligations fulfilling.

That is true; still, the state will have to repay the loans with interest and at the expenses of those tax-payers that are already facing serious problems. It might be an advantageous way out for the banks, while the common people are going to lose. The majority of the Georgian experts consider the method of replenishing the state revenue via the issue of government securities to be a harmful one.

Nodar Khaduri, Doctor of Science, Economics, has stated that the government is just planning the budget in a wrong way. "The budget looks quite optimistic. If it is not properly replenished at this stage, the situation is going to grow worse in September-October and, perhaps, by the end of the year we will face the problem of salary and pension payment, which is going to aggravate the social situation. I believe that at present, the government should reduce on-budget expenditures, mainly focusing on improving the social situation", - he suggested.

The same opinion is shared by Kakha Bendukidze, the former minister of economic affairs, who once has been in disfavour. "We have been stating for a long time that the budget is spent on numerous inefficient programs. This matter should be reconsidered at last, now that we are facing the problem of budget implementation", - he assured the Commersant reporter.

The issue of treasury obligations to the banks, according to Bendukidze, might aggravate the situation in the real sector for the banks are going to prefer less risky investments in state papers, rejecting businessmen. They "will be unable to manage two functions at a time", the Georgian reformer believes. He leaves open the opportunity that the credits might grow in price.

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