ECONOMY

Hospitals told to rely on own means

The Finance Ministry has instructed state hospitals and universities to sell off assets to finance spending needs if the funds allocated to them by the budget are not enough. According to a circular distributed by the General Accounting Office, which is controlled by the Finance Ministry, government bodies will need to keep a tight rein on spending in order to avoid putting further pressure on state finances. In the event that funds approved for salaries are not enough, the state organization can cover expenses from its own sources of income or with asset reserves, the circular said. This effectively means that these institutions should tap cash deposits, sell bonds or raise money from real estate assets in order to make ends meet. «The budget cannot be burdened by choices made by [each organization’s] management,» the circular said. «They need to prioritize their needs and make adjustments based on the funds awarded to them by the state budget.» Instructions to keep a lid on spending also apply to heavily indebted pension funds. Local councils and prefectures were excluded from the memo. The move is part of government efforts to slash the deficit to 8.7 percent of gross domestic product this year from 12.7 percent of GDP in 2009. Austerity measures approved by the ruling Socialists in early March foresee budget savings of 4.8 billion euros through a combination of spending cuts and higher tax revenues.