site.btaFinance Minister Porozhanov: "We Must Try to Keep Annual Budget Deficit to 3 Per Cent of GDP"

Sofia, August 20 (BTA) - "Budget expenditures this year have increased by some 1,200 million leva compared to 2013, but they have not been offset because revenues are overplanned. This, along with the suspended payments under Operational Programmes Environment and Regional Development, pose risks to the 2014
budget implementation," Bulgarian Finance Minister Roumen Porozhanov told a news conference here on Wednesday.

"The disproportion between revenues and expenditures directly affects the deficit. Still, we must try to keep it below 3 per cent because otherwise Brussels will launch an excessive deficit procedure against this country," Porozhanov said.

"Projects have been started under Operational Programmes Environment and Regional Development, time limits are running, and unless payments are effected, the resources for them will be forfeited," the Minister explained. That is why two payments were made in August: 166 million leva under Environment and 180 million leva under Regional Development, and this will translate directly into an increase of the deficit for the month.

Porozhanov said that Deputy Prime Minister Ekaterina Zaharieva and he are considering a possibility to provide money from the FLAG Fund to municipalities that have to make payments on public procurements under the two suspended programmes. Data are being collected on the progress of projects under the Development and
Growth Programme and how much money can be saved on that programme without halting public procurements or violating the law.

Regarding the option to increase the government debt, Porozhanov commented that, ideally, the debt should be increased by just the amount of deficit that has to be financed. "By September 15, we will propose to the Government a bill adjusting the 2014 budget parameters," the Finance Minister said.

At the beginning of August, the fiscal reserve amounted to 8,800 million leva. The Deposit Insurance Fund has some 2,100 million leva, mainly in cash and government securities, Porozhanov said. "By the law, the Fund comes in when the bank's licence has been withdrawn and pays deposits of up to 100,000 euro," the Minister noted.