23.08.2014

"My forecast and analysis show that we have all the prerequisites to do so that by restoring confidence, returning back investments and stabilising certain issues in the financial system to demonstrate that the State is back on the right track", Minister of Finance Rumen Porodzanov stated in an interview for Capital daily. He pointed out that with restoring confidence in the institutions no preconditions would emerge for financial instability or for downward revision of the sovereign credit ratings.

The Minister of Finance emphasised that the budget revision was inevitable and discussions would be held with all first level spending units "in order to judge purely on an expert basis the problems facing their budgets". The bill to revise the budget would not be comprehensive, he specified, but it would provide for key parameters that would be tabled the moment the new Parliament assumes office. "As of the moment different estimates show that the revenue underperformance is around BGN 600 million", the Minister said and stated that the efforts would be to increase VAT and excise duty revenues. Rumen Porodzanov points out that Deputy Minister Temenuzhka Petkova, responsible for revenues, and his advisor Atanas Katzarchev communicate and are in contact on a daily basis to improve the coordination between the revenue agencies, where the lack of information exchange has been substantial. "We are actively working at the moment on the analysis of the inconsistency between the quantities of goods on which VAT and excise duties have been paid and the data for the actual consumption of these goods", the Minister of Finance further said and specified that "the analysis of consumption is very important in order to understand where the problems come from".

To a question what portion of the available in the fiscal reserve resources could be used for current financing the Minister replied that "these resources are targeted and they cannot be used and we should not come to such a situation". According to him using the fiscal reserve for current financing, if necessary, would upset the balance. The President's idea to support the fiscal reserve with some buffers and the option to replenish the Bank Deposit Insurance Fund should be again considered when amending the 2014 Budget Law, Rumen Porodzanov said. "The present level of the fiscal reserve allows us to cover the payments on the debt issues by the end of the year, to cover the deficit provided for in the budget, i.e. BGN 1.47 billion, and to make the big payments in January, BGN 1.7 billion, concerning the foreign debt, the direct payments to farmers, which amount to around BGN 1.1 billion, and respectively the deficit in the first month of 2015, when traditionally the revenues are lower", Minister Porodzanov clarifies.

In respect of the suspended payments under the Operational Programmes the Finance Minister comments that everything is being done "to show the EC that the irregularities under OP Environment have been corrected". The main objective is to resume the payments by the EC under OPE and "eventually under OP Regional Development so as not to have the worst case scenario for the deficit forming in the National Fund. Combining this with an analysis of expenditures we could manage to contain the budget deficit within 3% both on a cash and on accrual basis", Porodzanov added.

Regarding the CCB case Minister Porodzanov again stated that his ambition was "the solution of the case regarding the bank rescue not to be related in any way with the commitment of public resources". As to the formal request of the BNB to the IMF for having a mission under the Financial System Assessment Programme within the regular consultations with our country under Article IV of the Articles of Agreement the Minister of Finance says that the BNB, the public finances of the MoF and the FSC will be reviewed during the mission. "One of the ideas is that when the work of these institutions is reviewed if there are any problems with the confidence in any of them, the confidence to be restored", the Minister specified and pointed out that "I expect the mission to take place at the beginning of next year as it differs from the regular monitoring".