Budget Committee Gives Bulgaria Gov't Green Light for New Borrowing

Business » FINANCE | November 18, 2014, Tuesday // 16:06
Bulgaria: Budget Committee Gives Bulgaria Gov't Green Light for New Borrowing The Bulgarian Finance Ministry's main entrance in Sofia. Photo by BGNES

The Budget and Finance Committee at Bulgaria's Parliament has given the government a mandate to start talks over a fresh foreign borrowing of up to BGN 3 B.

The remaining BGN 1.5 B, out of BGN 4.5 B that the cabinet will additionally need for a planned budget update, are to be raised by issuing government securities on the domestic market.

Bulgaria's recently appointed Council of Ministers is now allowed to negotiate with foreign banks virtually before any vote whether to overhaul the 2014 budget has taken place.

The Committee's decision to rush through the procedure is to allow more time for negotiations, Petar Chobanov, former Finance Minister and currenly a lawmaker, is quoted by the website Dnevnik.bg as saying.

On Monday the Finance Ministry reported it had already received offers or a bridge loan worth BGN 2.54 B (EUR 1.3 B) from certain banks.

Part of the BGN 4.5 B are to be used by the Deposit Insurance Fund (DIF), which ha to repay state-guaranteed deposits with Corporate Commercial Bank (KTB), Bulgaria's fourth-largest lender until mid-June when it was imposed special supervision from Bulgaria's central bank.

The Bulgarian National Bank stripped KTB of license earlier in November.

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Tags: budget update, Bulgaria, foreign lenders, borrowing, parliament, government, KTB, foreign debt
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