site.btaParliament Adopts Conclusively 2014 Budget Update

Parliament Adopts Conclusively
2014 Budget
Update


Sofia, November 26 (BTA) - Parliament updated the 2014 National
Budget Act on second reading on Wednesday.

Acting on Parliament's resolution, the Council of Ministers may
take steps towards assuming external government debt, including
through the issue of government securities on the international
markets, as well as towards a medium-term programme for issuing
debt on the international capital markets on condition of
subsequent ratification in 2015.

The Council of Ministers may issue loans of up to 2,000 million
leva to the Deposit Insurance Fund (DIF) from the central
government budget, with DIF assets as collateral, including the
Fund's future receivables from banks in the form of annual
premium fees.

Additional appropriations were made as follows: up to 125.7
million leva to the Interior Ministry, 50 million leva to the
Labour and Social Policy Ministry, up to 24.2 million leva to
the Health Ministry, up to 16.4 million leva to the Regional
Development and Public Works Ministry, up to 16.4 million leva
to the Agriculture and Food Ministry, up to 10 million leva to
the Supreme Judicial Council, up to 5 million leva to the
Justice Ministry, up to 3 million leva to the Foreign Ministry,
and up to 70 million leva to State Fund Agriculture. Parliament
also approved up to 77 million leva in support of EU-funded
projects and other expenditures.

The 2014 budget update envisages a shortfall in the projected
revenues of 1,061,800,000 leva (1.3 per cent of the projected
GDP). Revenues from VAT on imports, excise duties and corporate
tax are expected to fall short of the target. The cash-based
deficit under the consolidated fiscal programme is projected at
3.7 per cent of the GDP projection.

Parliament rejected a motion by ABV to increase the allocation
for Christmas supplements from 50 million leva to 110 million
leva, so they can be paid to all pensioners instead of only to
the pensioners with the lowest incomes.

The MPs also rejected a motion by BSP-Left Bulgaria to increase
the projected revenues by 337 million leva, so that the deficit
would not exceed 3 per cent of GDP and would meet the EU's
Maastricht criteria.

Kiril Tsochev of ABV said during the debate that the provision
of Christmas supplements for all pensioners should be firmly set
in the 2015 national budget.

Yordan Tsonev of the Movement for Rights and Freedoms said that
his party abstains from supporting the national budget update
because a different approach is needed.

By amending the 2014 National Budget Act, the MPs also
introduced changes in the Bank Bankruptcy Act, limiting the
validity of set-offs effected by a bankrupt bank's creditors to
the share to which each of them is entitled upon the
distribution of monetized assets.

These changes were prompted by the huge number of assignments
which have taken place since Corporate Commercial Bank
(Corpbank) was placed by the central bank under special
supervision on June 20, 2014, after a run by depositors left it
illiquid and it suspended all operations.

Chavdar Georgiev of BSP-Left Bulgaria said that the amendments
to the Bank Bankruptcy Act are aimed at resettling deals which
have already been made. He accused the power holders of trying
to re-allocate Corpbank's assets to persons of their choosing.

Martin Dimitrov of the Reformist Bloc said in reply to
Georgiev's allegation that because of the assignments, good
credits went towards paying non-guaranteed deposits before
guaranteed ones. He argued that the revisions are intended to
protect the State interest. According to Dimitrov, the increase
in assignments and set-offs should have been anticipated towards
the end of the term of Plamen Oresharski's government, and
these legislative changes should have been made back then.
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