site.btaPublic Finance Act Amended by Provisions on Municipalities' Financial Rehabilitation

Public Finance Act Amended by Provisions on Municipalities' Financial Rehabilitation

Sofia, March 11 (BTA) - The National Assembly Friday voted, 101-23 with 8 abstentions, to approve on first reading Government-proposed amendments to the Public Finance Act. The revisions introduce arrangements for initiating a financial rehabilitation procedure for municipalities and taking measures to achieve sustainability and stability of local finance.

The new provisions define the conditions under which a municipality will be considered to be in financial difficulties. Where such conditions are established, the mayor will have to notify the municipal council and propose the initiation of a financial rehabilitation procedure. The municipal council may assign the mayor to approach the Finance Minister with a request for financial assistance in the form of a short-term interest-free loan from the central government budget. The duration of the financial rehabilitation procedure will range from one to three years. The budgets of municipalities in an initiated financial rehabilitation procedure are to be coordinated in advance with the Minister of Finance.

The Ministry of Finance will publish monthly official information on the General Government debt and guarantees.

During the debate, BSP-Left Bulgaria declared themselves against the bill. Roumen Gechev MP of that parliamentary group argued that the revisions vest the Finance Minister with an "amazing" amount of subjective rights to punish or reward certain municipalities. His colleague Manol Genov said that the state of municipalities is not analyzed. The amendments violate the Constitution and the principle of devolution from central to local government, according to another Left MP, Ivan Ivanov.

Dimiter Bairaktarov MP of the Patriotic Front agreed with BSP-Left Bulgaria that so much power should not be concentrated in the hands of the Finance Minister. He argued, though, that the bill is needed and called for finding a way to improve the provisions before it comes up for a second reading.

Roumen Hristov MP of the Reformist Bloc said that the bill is very important and he supports it.

Georgi Kovachev MP of the Bulgarian Democratic Centre wants a complete review of the bill.