Bulgaria’s budget deficit for January 2010 amounted to BGN 495 M, Finance Minister Simeon Djankov announced.

The deficit was accrued as a result of three items that contributed extra to state spending in January: BGN 240 M were allocated for national co-financing of EU funded projects, BGN 214 M went for foreign debt payments, and BGN 40 M were set aside for paying delayed sums owed by the state to private contractors; of those, BGN 35 M have already been paid. BGN 45 M more will paid to private firms in February, and BGN 80 M – in March.

“Things are looking difficult but manageable,” Finance Minister Simeon Djankov said reminding his plan to have monthly budget deficits in order to make badly needed state spending such as the co-financing of EU funded projects and paying all dues to private companies.

Djankov expressed his confidence that in April Bulgaria’s monthly budget would break even.

“We had to inspect very well all contracts,” the Minister said explaining why the government delayed making payments to private contractors for services they performed to the state by several months.

He pointed out that the inspections discovered that some services had been performed on paper but not in reality.

“If we had paid the private firms at the end of 2009, the country’s budget deficit for 2009 would have reached the 3,5% forecast of the International Monetary Fund, and Bulgaria would not have met the Maastricht criteria which are important for our application to the ERM 2. The tighter our policies, the better. This is why we are trusted in Europe now,” Djankov pointed out.

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