15.11.2014

"We hope, as envisaged in the Public Finance Act, by the end of the month to submit to the National Assembly the three-year budget forecast and the bill on the 2015 state budget and in a tight schedule the latter to be adopted by end-2014." Minister of Finance Vladislav Goranov said the above in an interview for the "Banker" newspaper. He revealed that the projected GDP growth for the coming year would be between 0.8 and 1%, which is close to the forecasts of the European Commission and the BNB. "The deficit will be below 3% of GDP; we are discussing various measures for its attainment and are very close to setting up a clear strategy for this", added the Minister of Finance. According to Minister Goranov the European Commission has been notified of the expected higher deficit this year and it views with understanding the efforts of the government not to allow an excessive deficit.

In the interview the Minister of Finance assured that the required funds for payment of the guaranteed deposits would be ensured on time. "We are prepared as soon as we obtain permission from the National Assembly to ensure bridge financing from abroad in the amount of EUR 1 - 1.5 billion in order to meet all urgent payments", announced he. "The scheme is that the Bank Deposit Insurance Fund will be provided with a loan of BGN 2 billion and almost at the same we will take actions to assume debt in the amount of BGN 4.5 billion on both the foreign and the domestic market", explained the Minister. In his words, pursuant to the bill submitted to the National Assembly out of the funds raised via the debt issue BGN 900 million will be set aside in case of any new need of liquidity support, BGN 2 billion are intended for the Bank Deposit Insurance Fund and the rest BGN 1.6 billion are intended for funding the proposed increase in the budget deficit.

To the question whether the new text of the draft Bank Deposit Guarantee Act didn't make null and void the assignment agreements concluded between borrowers at CCB and owners of deposits and accounts at the bank, Minister Goranov answered that the lawfulness of the assignment transactions was not challenged. "The debtor who has acquired the deposit does not have the right to claim the legal guarantee of up to BGN 196 thousand under it because s/he had not been depositor by the time the bank was placed under special supervision. S/he, however, continues to be its creditor and may collect its receivable according to the relevant terms and procedures upon the conversion of the bank's bankruptcy estate assets into cash

In connection with the drafts of the tax laws Goranov commented that only those amendments were proposed that were made necessary by the EU legislation and the changed state aid regimes. Before the "Banker" newspaper Vladislav Goranov also said that the government had not discussed and had not submitted proposals for changes to the personal income tax as well as that at the sitting of the ad-hoc parliamentary Budget and Finance Committee its members had stated the intention to restore all tax regimes from before two or three years. "Specifically on the issue of the non-taxable minimum we have declared that the flat tax rate in the form it existed until one year ago is successful for the Bulgarian society and its modification is unacceptable."