site.btaParliament Debates Update of 2014 National Budget on First Reading

Sofia, July 29 (BTA) - Parliament is debating on first reading a draft update of the 2014 national budget, moved by the outgoing government of Plamen Oresharski.

The outgoing cabinet proposes an increase by 725 million leva of the budget deficit under the consolidated fiscal programme for 2014, so as to provide greater flexibility  and opportunities for measures to be taken by the next governments. Despite this, calculations show that the deficit will not exceed 2,197.3 million leva (2.7 per cent of the projected GDP) for this year.

The draft update includes a decrease of the VAT revenue estimates by around 500 million leva compared to those set for 2014, and the transfer of 225 million leva to the National Health Insurance Fund (NHIF) aimed at preserving the healthcare system's financial stability and preventing new overdue debts of the NHIF at the end of the year.

With a view to strengthening the fiscal buffers and increasing the budget deficit, the outgoing cabinet also proposes that the government debt be increased by an additional 3,425 billion leva (4.2 per cent of projected GDP), of which 2.7 billion leva should be used for stabilizing the situation with Corporate Commercial Bank and 725 million leva could serve as a buffer in case of possible payments by the next two governments this year (the future caretaker government and the one to be elected by the 43nd National Assembly).

The opposition GERB party Tuesday moved to Parliament a draft resolution allowing the caretaker government, if necessary, to conduct negotiations and conclude agreements on external loans with other countries, the EU and its institutions, as well as with other international organizations and financial institutions, under the condition of a subsequent ratification by the National Assembly. In its reasoning for the draft resolution, GERB talks about the problems in the national budget's revenue part that also influence the opportunities for providing sources for the expenditure policies and pressure on the amount of the deficit. This is coupled with the financial crisis during the last weeks, which requires the provision for additional buffers in the national budget.