site.btaGovernment to Extend Interest-Free Loan to Pernik to Stabilize its Finances

Government to Extend Interest-Free Loan to Pernik to Stabilize its Finances


Sofia, December 17 (BTA) - The Bulgarian Government will offer
an interest-free loan to Pernik (Southwestern Bulgaria) to help
it stabilize its finances and avoid a default. This transpired
at the weekly Cabinet meeting, where Pernik Mayor Ivan Ivanov
was invited to brief the ministers on Pernik's woes.

Prime Minister Boyko Borissov asked Finance Minister Vladislav
Goranov to discuss with the Pernik Mayor what the Government can
do to help Pernik. He suggested that an interest-free loan will
enable Pernik to repay its debts after which it should only
spend as much as it makes.

Ivanov said that the town's debts stand at 16,408,084 leva
before interest. The town has stopped repaying its old debts
altogether and its revenues are negligible: some 20,000-25,000
leva daily.

The payment of wages to second-level spending units is in
jeopardy. The worst problems are with the waste disposal
companies: the debt to the old contractor amounts to 3.5 million
leva, and another 1.2 million is due to the new contractor,
said the Mayor.

Deputy Prime Ministers Ivaylo Kalfin and Tomislav Donchev
observed that it is a systemic problem. Since 2007, Pernik has
been running a debt of 12 million leva, said Kalfin. Donchev
added that either Pernik spends more than it earns or it does
not earn enough to cover all its costs. "It gives us a reason to
consider a thorough restructuring of the system of local taxes
and fees," said Donchev.