site.btaBudget Committee Approves Higher Debt Ceiling of EUR 3.8 Bln; CC and DB Slam This Move

The parliamentary Budget and Finance Committee Tuesday approved on second reading a raise of the new debt ceiling to EUR 3.8 billion through amendments to the so-called budget extension law (formally the Act on the Collection of Revenues and the Commitment of Expenditures in 2026 until the Passage of the 2026 State Budget Act, the 2026 Public Social Insurance Budget Act and the 2026 National Health Insurance Fund Budget Act). The bill stipulates that the Council of Ministers has the authority to incur new public debt of up to 3% of projected GDP.

The bill provides for the government to issue new debt on international capital markets through the medium-term programme for issuing debt on international markets, as well as short-term government debt, which is to be repaid by the end of the current fiscal year.

Deputy Minister of Finance Lyudmila Petkova said that the situation regarding budget expenditures is expected to be critical in August and September, given the monthly costs of all social payments in the country, which is why this debt is necessary.

Continue the Change (CC) Chair Assen Vassilev told reporters that it is scandalous for the Parliamentary Budget and Finance Committee to amend the budget extension law by raising the ceiling for new government debt by up to EUR 3.8 billion without receiving calculations from the Ministry of Finance that indicate how much new debt is actually needed. Vassilev stated that despite assurances from Finance Minister Galab Donev, the Ministry of Finance had not provided calculations demonstrating how much debt was necessary in light of the adoption of a regular state budget for this year.

Democratic Bulgaria (DB) MP Martin Dimitrov told reporters that a true crisis in the country's budget happened in 1997, whereas the current situation is entirely manageable, and claims about the poor state of public finances are being used to justify taking on large debts without any real justification. He said: "The treasury is not empty, and these are claims used to explain taking on huge loans in debt without any justification." Dimitrov argued that the more the government is delaying and accumulating panic-driven actions, the more the problems deepen.