29.09.2014

"The draft budget revision complies with all the indicators that influence the budget, the deficit increase is proposed to allow the ministries and the institutions to function in a normal way and to deliver public services and social assistance". This is what Minister of Finance Rumen Porodzanov said in the morning programme of Nova TV. He drew attention to the fact that the draft budget reflected the status of public finance within the framework of the problems in the budget from the point of view of bad planning and an unfavourable macroeconomic environment. The Minister added that another factor was the negative inflation due to which the GDP had to be decreased from BGN 81.7 billion to BGN 79 billion in nominal terms. "Domestic consumption has shrunk, prices go down, investment is small, if not altogether missing, due to the political crisis and because of the mistrust of European institutions and investors in Bulgaria", he explained. The Finance Minister also noted BGN 1.7 billion from the proposed debt is aimed for deficit financing, while the remaining part is a cushion for the banking system.

Asked about the procedure launched against Bulgaria by the European Commission, the Minister of Finance said that the surveillance of CCB did not suggest any access to the depositors' funds. "Immediately after the bank was put under surveillance, the Commission started an exchange of information with the Bulgarian state and with BNB on the extent to which the 2009 Directive was appropriately transposed to for its spirit, i.e. to allow the depositors to have access to their funds as quickly as possible, having found that the bank had liquidity problems, to be launched. In our dialogue with the Commission we have stated clearly in a letter dated August that we are working on a law to align the directive and to lay down that whenever the bank suspends any payments, without being bankrupt, the Insurance Fund may start making the payments", he said. 

As to CCB, there is some progress in that the case should be resolved, the Minister noted. In his words, the assessment that the BNB has assigned to the auditors and the suquestrators should be finalised at the beginning of next month. Mr. Porodzanov said that there was some interest from the Vienna Fund which, based on this assessment, may take actions to rescue the bank. "For me this is the best option as the bank will be rescued by investment of the shareholders and if some liquidity support from the state is needed, it will be partial", the Finance Minister considers. He also specified that the rescue plan should be approved by the European Commission, to be examined if it contains any state aid, whether it contradicts any requirements and directives, if applied as a tool-kit for restrictions, for transfer of capitalisation of uninsured deposits.