03.06.2014

"I want to address the opposition, they are in their right to speak from the point of view of an opposition but I call them to think statesmanlike and not foster hysteria". This is how Minister of Finance Petar Chobanov comments the allegations of the opposition that the state faces bankruptcy in an interview for bTV. He also reminds that debt used to be issued regularly during the term of office of the GERB government but the opposition had then a statesmanlike attitude and it was known that those issues should not be subject of exposure. He adds that because of the opposition's behaviour there are greater risks for the country's credit rating and assures that the state will not go bankrupt.

The Minister also comments that the fiscal reserve at end-April is BGN 6 billion while in February 2013 it was BGN 3.9 billion, with an extraordinary issue of BGN 800 million of debt having been issued just a couple of days before. Mr. Chobanov specifies that every year of the GERB ruling has cost BGN 2 billion each, i.e. BGN 1 billion of new debt and BGN 1 billion of funds from the fiscal reserve. "From February to March of last year inclusive the debt increased by BGN 1.450 billion, and "if we consider the period from the beginning of June to the end of 2013, government debt increased by just BGN 550 million, which is almost three times less and we are far from those billions that are mentioned arbitrarily in public in the last few days", says Mr. Chobanov. He adds that since the start of this year the debt has grown by BGN 800 million but these are short-term issues that mature this year and will not result in an increasing debt burden.

As to the assumption of external debt, the Minister reminds that it is planned in this year's budget and it is clear what the funds will be used for. We have to repay BGN 1.7 billion of debt maturing in January 2015, while BGN 1.3 billion will be used for the repayment of old liabilities this year, the Finance Minister. He also refers to European Commission forecasts according to which in 2017 Bulgaria will continue being the country with second lowest government debt in the EU after Estonia, with this indicator then being slightly over 20% of GDP.

Minister Chobanov comments that the budget deficit is BGN 864 million as of April and is indeed higher than last year but the reason for this is that there are more payments under EU programmes this year and this money reach the business and the people. He adds that the philosophy of this Government is not to attain the budget objectives by delaying payments and VAT refunds and provides data for non-refunded VAT of BGN 160 million at end-May, which is the lowest level for a number of years.

According to the Finance Minister, around 90% of the social commitments have already been fulfilled. He gives an example with the great change concerning the flat tax rate, with the tax paid by those working on the minimum wage being reimbursed and thus having BGN 150 million at people's disposal.