28.09.2014

"The problems identified in the framework of the budget should be corrected on time and submitted to the National Assembly. The proposal that we are going to submit objectively reflects only the "snapshot" of the public finance for the time being and does not serve anyone - it serves the public finance, the public services provided to the population, the businesses", commented Minister of Finance Rumen Porodzanov in "Nedelya 150" of the Bulgarian National Radio. The team of the Ministry of Finance identified disproportions in the budget formed as back as at the beginning of the year and now we are pointing at them; the purpose is the Ministries and the administration as a whole to be able to perform their functions until the end of the year, said also Minister Porodzanov.

As an example of a poor budget planning the Finance Minister indicated that the non-tax revenues had included revenues from dividends to the amount of BGN 100 million which are mainly paid by the energy sector but because of the low prices of electric power the planned amount was not reached and the underperformance of that item only amounted to BGN 50 million. Minister Porodzanov commented that in view to ensuring resources for the Public Investment Programme, a 12% reduction had been made of the budgets of municipalities and Ministries and this was a precondition for tension in the budget. These economies, however, have not been made and as an example thereof the Finance Minister pointed out that the Ministry of Interior had increased the salaries of the staff and at the moment the formed deficit there was BGN 160-170 million. Greater payments than the planned have been made in the sector of agriculture, too. In the analysis of the poorly planned budget revenues Porodzanov also pointed out to the inefficient governance by sectors and the planning of additional and unsecured expenditures.

Minister Porodzanov pointed out that GDP was not expected to increase and inflation was expected to be - 1,1%. According to the Finance Minister the next government should make structural reforms and restructure its expenditures so that the budget resources be managed more effectively.

As regards the budget deficit the Minister commented that influence was exerted by the necessity of providing liquidity support to one of the banks, too, and he projected refinancing of that liquidity support. In regard to the live question of the developments around CCB, Minister Porodzanov commented that the proposed draft update envisaged the provision of a state guarantee of up to BGN 2 billion for the issuance of bonds by the Bulgarian Deposit Insurance Fund as well as a loan of BGN 700 million from the state to the fund.

As regards the NHIF's budget Minister Porodzanov said that additional resources of BGN 100 million would be ensured and in terms of the social payments the shortage of BGN 40 million would find its solution in the proposed draft for amendment and supplement to the state budget. The Finance Minister expects the European Commission to restore the payments under OP "Environment" at the end of October and reminded that so far the non-reimbursed funds under the EU Programmes amounted to BGN 400 million.

Minister Porodzanov expressed his hope the meeting of the National Council for Tripartite Cooperation to be held on the next day; if, however, the social partners were not ready with their positions on the draft budget update the government would show consideration for the social and economic partners and the meeting might be postponed for Wednesday.