Thai Constitution Court OKs government's emergency borrowing

Thai Constitution Court OKs government's emergency borrowingBangkok - Thailand's Constitution Court on Wednesday ruled unanimously that the government had not breached the charter by passing an executive decree to borrow 400 billion baht (11.8 billion dollars) to jump-start the economy.

The opposition Puea Thai Party had argued that the executive decree by Prime Minister Abhisit Vejajjiva's government violated the constitution because it was not an emergency matter, but the court's ruling said the decree was necessary and concerned an urgent matter.

Thailand has suffered a steep decline in revenue collection as the economy shrank 7.1 per cent in the first quarter of this year, compared with the same quarter in 2008.

The decree was deemed necessary to allow public borrowing to balance the budget and invest in projects aimed at stimulating the economy and creating employment.

The business community had warned that if the court ruled against the government's decree, it would imperil the economy.

"Without such loans, Thailand's economic recovery is unlikely and will be subject to further slowdown," Ajva Taulananda, vice chairman of the Charoen Pokphand Group, an agro-industry giant, told the Bangkok Post. The government still needs to win the approval of the lower house of parliament for the executive decree at a special session scheduled June 15-23.

Abhisit said the loans would raise funds for a new stimulus package that would create 2 million jobs over the next three years.(dpa)