site.btaParliament Updates 2014 National Budget on First Reading

Sofia, July 29 (BTA) - Voting 117-61 late on Tuesday, Parliament adopted on first reading an update of the 2014 national budget moved by the outgoing  government of Plamen Oresharski. GERB and the Movement for Rights and Freedoms (MRF) voted in favour, the Coalition for Bulgaria voted against, and the MPs of the Ataka group were not attending the sitting.

Valeri Zhablyanov (Coalition for Bulgaria) turned to the MRF, its ruling partner until recently, with the words: "We were engaged in a serious political effort for months, and you betrayed us in the end." 

The 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. Nevertheless,  the deficit is not expected to exceed 2,197.3  million leva (2.7 per cent of the projected GDP) for this year. 

The draft update includes a cut in the projected VAT revenues by around 500 million leva, 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 arrears of payments of the NHIF at the year's end.

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 a further 3,425 million leva  (4.2 per cent of the projected GDP), of which 2,700 million leva  must be used to stabilize the 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 43rd 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, on condition of a subsequent ratification  by the National Assembly. In its reasoning GERB cites problems in the national  budget's revenue side that also affect opportunities to  provide sources for the expenditure policies and exert pressure on  the amount of the deficit. This is coupled with the financial  crisis of the last few weeks, which also calls for additional buffers in the national budget.

On GERB's motion, the updates of the budget of the NHIF and the 2014 national budget will be debated on second reading at an extraordinary sitting on August 4. Parliament will also debate GERB's draft resolution giving the caretaker government  permission to negotiate and sign external loan agreements.

Maya Manolova (Coalition for Bulgaria) compared such a permission to signing a blank cheque and said the Left would challenge the resolution, if adopted, before the Constitutional Court.

The MPs voted to have their summer recess from August 5 instead of August 1.