Bulgarian Government to Decide on Budget Overhaul

Business » FINANCE | July 16, 2014, Wednesday // 11:00| Views: | Comments: 0
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Bulgaria: Bulgarian Government to Decide on Budget Overhaul Prime Minister Plamen Oresharski has long dismissed calls to review the budget. Photo by BGNES

Bulgaria's Council of Ministers is set to take a final decision to update the 2014 budget at its meeting scheduled for Wednesday.

Upcoming changes to the State Budget of the Republic of Bulgaria Act have not been announced beforehand, but an agreement "in principle" was reached on Monday that the government should boost expenditure in certain sectors, including healthcare.

Consensus was achieved on the subject as political leaders held consultations at the Presidency and broached issues as the situation at the Corporate Commercial Bank (KTB) and the financial system in general, but also pressing problems at the National Health Insurance Fund (NZOK), where the allocated money is ending and no payments could be made after September under the current budget framework.

The deficit cap for 2014 is also expected to be raised to three percent (the EU-level limit) from the current 1.8 percent of GDP, a step partially aimed at safeguarding assets at troubled KTB, which the central bank is to deprive of license and to declare insolvent over illicit banking practices.

Ideas to review the budget nevertheless preceded the KTB affair, with President Rosen Plevneliev having insisted for weeks that failure to fulfill the income statement would create gaps worth hundreds of millions of BGN and this could pose a challenge to the interim government due to take over on August 6, as it will have no budgetary competences.

Citing document that reveal the session's agenda, website Dnevnik.bg reports amendments in the "economic growth and statehood" section could be put forward for discussion.

The budget deficit was BGN 888 M in May, compared to a surplus of BGN 45.5 M in the same month of 2013, before the current government started work.

Finance Ministry officials argue good results last year were caused by revenues from EU operational programs.

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Tags: State Budget of the Republic of Bulgaria Act, Finance Ministry, surplus, healthcare, consultations, NZOK, deficit, Corporate Commercial Bank, KTB, budget, Rosen Plevneliev
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