Bulgarian MPs have demonstrated this week that in the name of their own parties’ interests and due to the lack of competence they could sabotage and shake the government to such an extent that the premier has hinted on his resignation. A seemingly purely technical agreement for bank intermediation at the issuance of EUR 8 bln. of government debt over the next 3 years has blasted both the parliament and the governing coalition. The Bulgarian MPs simply failed to remember that the debt had already been approved by the December-adopted state budget for 2015 and the accompanying macroeconomic three-year prognosis of the financial ministry. Now they see a new opportunity to attract public attention and to prove how concerned about the people their parties are, especially on the eve of the forthcoming local elections.

The financial ministry can give the best answer on whether this huge for a state like Bulgaria debt is really necessary and if it should amount to precisely that sum. Being sharply criticized, Financial Minister Goranov has finally agreed on a smaller loan, at the expense of compromises with the results that are likely to cause political thunders later on as well. However, all his statements made it clear that the social policy of the government will suffer due to the situation, i.e. the socially weakest and most vulnerable layers of the society. At the same time the institution will be ruthless towards tax payers and any possible hidden taxes. On the other hand the new debt is designed to cover future budget deficits up to 2017. The lack of any deficits with the state public finances being in good health at the same time – it is a problem that the MPs have to solve, as they adopt this country’s public budgets each year. Any eventual deficit, debt and the size of the latter will depend on their balancing skills in terms of expenses and revenues. We hope they won’t forget this as well over the time period left till the final parliamentary adoption of the bank intermediation agreement at the issuance of a new government debt.

English version: Zhivko Stanchev