04.12.2014

"There is no room for extending the expenditure part of the budget because expenditures' excess over revenues has reached the limit allowed by EU legislation - 3% of GDP". Minister of Finance Vladislav Goranov said the above in the "Face to Face" broadcast on bTV. He pointed out that as budget priorities he rather considered social policy, healthcare reform and attainment of quality secondary and higher education. As regards the topical discussion on the PSS budget Minister Goranov again declared his readiness for an open dialogue with social partners in view to coordinating the policy on increasing the retirement age, the procedure for category workers' retirement as well as the other, long postponed topics on the pension model of our country. The Finance Minister said that the draft 2015 state budget contained a lot of reforms but those would be seen in the actions of the government because the fiscal framework in itself depended on the tax system and the latter had not been changed in the 2015 budget.

While answering a question on the limit of debt in the 2015 budget which amounts to BGN 8.1 billion Minister Goranov commented that "the net new debt is even lower than the deficit; our country will repay a number of loans, we will take a new debt but in net terms next year Bulgaria will become indebted only by BGN billion more compared to this year". 

In connection with the topic of present interest regarding the launched payment of the guaranteed deposits to CCB depositors from the Bank Deposit Insurance Fund, Minister Goranov said that during the first day about 25 000 depositors had drawn out BGN 1 billion and 70 million from the accounts of the Fund. This is almost one-third of the whole sum that the Fund should pay. The Finance Minister pointed out that it could still not be commented as to what amount had left in cash the bank system and what amount had remained as deposits in the servicing banks. He reminded that around BGN 3 billion and 700 million was the total amount that the Bank Deposit Insurance Fund would pay to approximately 250 000 depositors having guaranteed deposits in the bank whose licence had been withdrawn. Minister Goranov said that the same day he had signed a payment order for BGN 1 billion from the accounts of the central budget to the accounts of the Fund so that the payment process could continue normally on the next day.

To the question whether banks' payments to the Bank Deposit Insurance Fund should not increase, the Finance Minister defended his position that "it is not judicious to press banks with an increase of their payments to the Fund". According to Goranov "if we now obligate the banks to make greater payments, even on the account of their entire profit, the Fund will be filled up for 4-5 years but it is not judicious to press the banks in order their indicators not to deteriorate because then the financial model itself of interest on deposits and interest on loans will have to be disturbed for a greater resource to the Fund to be allocated". Minister Goranov reminded that at the moment the banks paid around BGN 250 million each year to the Fund while the annual profit of the banks, excluding CCB, was around BGN 500-600 million.

The Minister announced that the government was ready to issue a bank guarantee for the Fund if the Management Board decided the Fund to issue a debt on its own what had been the initial idea for covering the liquidity shortage. According to the Finance Minister the cheapest option for that was assistance by the sovereign in the person of the state and he reminded that the day before he had signed an agreement for a loan from the central budget to the Bank Deposit Insurance Fund to the amount of up to BGN 2 billion.