26.04.2010

Bulgaria's Convergence Program was formally approved today at the regular meeting of the EU General Affairs Council. Previously the document was discussed at several meetings of the EFC and ECOFIN during the month.

The Council confirmed the positive assessment of the European Commission of the Bulgarian Government's efforts to maintain strict and predictable fiscal policy for public finance stability. In March the EC defined the Government's macroeconomic policy as "adequate" and recommended that the planned structural reforms should continue.

Thanks to the strict fiscal measures in 2009 the Government managed to compensate the considerable revenue underperformance that resulted from the unexpectedly sharp recession and the changed GDP structure. The administrative expenditure cuts and the measures to improve tax collection allowed Bulgaria to achieve a comparatively low budget deficit in 2009.

The main objective of the medium term budget strategy is to maintain a balanced budget during the whole period.

The Council draws attention that revenues in 2010 might be lower than the budgeted ones due to slower and weaker economic recovery.

Debt during the program period is expected to stabilize around 2009 levels mainly due to the planned balanced budgets.

Bulgaria must continue to implement strict fiscal policy. In its opinion the Council stresses the need for accelerating structural reforms. For Bulgaria it is important to undertake reforms in healthcare, the pension system, education, public administration and business environment.

The Convergence Program is one of the most important documents that set the main parameters of the economic and fiscal policies in pursuance of the requirements for budget deficit and government debt in the medium term.