site.btaPublic Debt Act Amended on First Reading

Bulgaria's Parliament on Friday voted, 181-0 with 9 abstentions, to pass on first reading revisions to the Public Debt Act moved by Progressive Bulgaria. Another bill on the same subject-matter, proposed by GERB-UDF, was rejected by a vote of 44-7 with 144 abstentions. 

The draft legislation that was adopted introduces a legal framework regarding the designation, control and status of primary government securities dealers. The proposed amendments respond to the need to streamline the requirements for participation of licensed credit institutions and investment firms on the government securities market. In accordance with the Treaty establishing the European Stability Mechanism, all government securities issued after the date of the introduction of the euro in Bulgaria (January 1, 2026) with initial maturity exceeding one year are subject to identical Standardized Collective Action Clauses (SCAC) approved by the EU Economic and Financial Committee. SCAC make it possible to modify the agreed terms of issued government securities on a motion by the Minister of Finance based on a Council of Ministers decision.

The bill further empowers the Minister of Finance to issue government securities for natural-person investors, who will be exempt from fees and commission charges for the initial acquisition of such securities (these costs will be borne by the Exchequer). Another proposal is to set up an electronic system for registration and servicing trade in government securities.

The GERB-UDF bill that was voted down provided that the Minister of Finance would issue annually government securities intended for acquisition of natural-person investors under terms of equal non-discriminatory access. The Finance Ministry would implement an electronic platform for direct offering and buy-back of government securities without the participation of primary dealers. Optionally, government securities would be subscribed and paid for and bought back through Bulgarian Posts.

The Debate:

Kostantin Prodanov MP of Progressive Bulgaria: The Bulgarian banking system holds deposits approximating EUR 98 billion, of which some 60% belong to household. The average five-year yield of government securities exceeds 3%. If resident natural persons purchase government securities, as provided for by the bill, interest income on these securities will remain in Bulgaria and the capital will not leave the country.

Tsoncho Ganev MP of Vazrazhdane: According to official figures released by the National Revenue Agency, 34% of Bulgarians paid taxes on a minimum wage by December 31, 2025. The lawmakers now tell them to go buy government securities so that the revenues would plug the budget gap.

Stefan Belchev MP of Progressive Bulgaria: In 2020, personal deposits with commercial banks amounted to BGN 93 billion. The figure rose to EUR 98 billion in 2026, and there is nothing wrong if these funds flow into the country's economy. 

Vladislav Panev MP of Democratic Bulgaria: The measure is good because it withdraws liquidity from consumption and the market, which eases pressure on prices.

Martin Dimitrov MP of Democratic Bulgaria asked when the electronic platform that is envisaged for establishment will be ready. Prodanov answered that a time limit should better be set and promised to consult the Finance Ministry on the matter if a particular timeframe is proposed.