site.btaNew Government Debt Ceiling Set at Lv 5.3 Mln in 2016

New Government Debt Ceiling Set at Lv 5.3 Mln in 2016

Sofia, December 3 (BTA) - Parliament set a limit at 5.3 million leva on new debt incurred by the government in 2016 during second reading debates of the 2016 State Budget Act late on Wednesday.

New debt may go towards financial stabilizations programmes and facilities and emergency liquidity assistance under the Recovery and Resolution of Credit Institutions and Investment Firms.

The government debt at the end of 2016 may not exceed 26.6 billion leva. MPs voted down a proposal by MP Yanaki Stoilov of BSP-Left Bulgaria to set the ceiling at 23.5 billion leva.

Finance Minister Vladislav Goranov said that in 2016 the state should try to avoid at all costs a repeat of the situation from 2014 when there were no budget buffers and the bankruptcy of Corporate Commercial Bank caused liquidity crisis.

The Minister added that as the banking sector was due to undergo an asset quality review in 2016, it would be unwise to leave the state without budget buffers.

Parliament also set the fiscal reserve minimum at 4.5 billion leva by December 31, 2016.