Since the beginning of the year, no money has been transferred to Bulgaria's Silver Fund, set up to anchor the public pension system, shows its balance sheet, published online by the finance ministry.

Under local legislation the money in the Silver Fund comes from privatization deals, concessions, and budget surpluses (if any).

The money the Bulgarian state got from the sale of its dominant tobacco company Bulgartabac last year has also gone up in smoke, the check shows.

Bulgaria's sale body, the Privatization agency, told Dnevnik daily that the price of EUR 100.1 M has been paid by the buyer and transferred immediately to the account of the state budget in the central bank.

Under local legislation them money should next be transferred to the Silver fund, but this does not feature in its end of April report.

Finance Minister Simeon Djankov has explained that the transfer will be made by the end of May, admitting that by then the money can be invested or stacked up in a deposit account. The returns however will not be channeled into the Silver Fund, he pointed out.

The Silver Fund, a state retirement fund set up in 2008 in order to cover future pension system deficits caused by Bulgaria's aging population, is currently worth BGN 1.78 B.

The Bulgarian government wants to allow its Silver Fund to also invest in bonds issued by national and local administrations. At the moment, only foreign securities with an adequate credit rating may be purchased.

The proposal was criticized by the European Central Bank, which says the fact that Bulgarian securities would not require a rating could place the Bulgarian government in "a privileged position compared to other issuers."

Such "indirect discrimination" could lead to "unjustified restrictions on the free movement of capital," thus violating European Union rules.

Another concern is that provisions allowing the Silver Fund to channel up to 70 per cent of its portfolio on Bulgarian bonds by 2016 could lead to skewed yields not driven purely by the markets.

Finance Minister Simeon Djankov responded in a letter by stressing that any Bulgarian bond issues purchased by the fund would have interest rates based on market benchmarks.

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