08.11.2014

"The issue with the financial plan by the end of the year is a priority for the Ministry of Finance. The budget review is not only a key to the solution of the problems of the individual budget systems but will also give an answer to the question about increasing the debt limits that will help to pay out the guaranteed deposits of CCB depositors." This is what Minister of Finance Vladislav Goranov says in an interview for the weekly broadcast of K2 Radio. He adds that the efforts of MoF experts are aimed at submitting the budget review to the National Assembly by the end of next week and the 2015 draft budget shortly after that so that both papers to be passed by the end of the year. "We must solve the case with delayed payments in some of the systems, on the one hand, and, on the other hand, to legalise the increase in debt limits in order to support the Deposit Insurance Fund with the liquidity required." The Minister of Finance clarifies that this can take place without assuming new debt by the end of this year, but it is better to do it now as it will burden the schedule of debt issuance, if postponed for the beginning of next year. As far as the issue of how the maturity forthcoming in January 2015 will influence the budget deficit is concerned, Minister Goranov points out that when the budget goes for a deficit and there is no privatisation, the only source for its financing is borrowing. "So, in the next few years until there is budget deficit, the issue of debt increase will be topical", he concludes by adding that "we should therefore be very sensitive to the expenditures we incur and to their effectiveness, because now, as well as in the past few years, the present society lives on credits at the expense of the next one". He is firm that the market trusts Bulgaria, and the required financing may be secured. "The issue is that such levels of deficit are unacceptable and in the very near future we should start spending as much as what our economy produces", is the opinion of the Minister of Finance Vladislav Goranov.

The Finance Minister is explicit that the banking crisis has been left behind "inasmuch as the CCB issue is already behind us and in the future will be settled within the law in force". Having observed the banking sector from his position at Municipal Bank, the Minister is convinced that the CCB case is an isolated one. "I think that there is no reason whatsoever for mistrust in our banking system and you will see that very soon the market will evaluate it in terms of a yield. I am sure that we will manage to finance ourselves at levels lowers than those at which we have raised money thus far", he says. The Minister of Finance is of the opinion that it is better to sell Victoria CB as a going concern. "The other scenario for it is to sell its assets with its loan portfolio, which is considerably different from that of CCB, and then to reopen, to return the borrowed funds, if the depositors wish to withdraw them, and to continue acting as owned by CCB towards voluntary winding up or, as proposed in this case, to be bought and continue functioning as a bank", he adds and reminds that BNB is to judge whether the bank should be sold as a going concern or there should be voluntary winding up. "We all aim for justice and for all bad practices in CCB to see light as soon as possible so as to prove if there are or there are not such practices. But for me, as a Minister of Finance, it is a prime task to ensure that secured deposits will reach their owners in the shortest possible time, at that", he adds.

Minister Goranov discloses that the experienced financier Mr. Kiril Ananiev, who was a deputy minister in the caretaker government and in several former governments due to his expertise and "long years of assisting several ministers of finance, prime ministers and presidents", will occupy the position in this cabinet as well. "I think that we will have sufficient capacity to cope with the situation, to restore the trust in the financial system and to bring the budget back on track", he is certain.