Bulgarian parliament overrides presidential veto on bill raising 2013 budget deficit to 2% of GDP

By bne IntelliNews August 19, 2013

Bulgarian lawmakers approved in third reading the bill that raises Bulgaria's 2013 deficit and lifts the ceiling on new debt, thus overriding president Rossen Plevneliev's partial veto. A total of 130 MPs voted in favour of the budget revision, while 93 were against it. Lawmakers and ministers from the BSP-MRF ruling party coalition defended the revision by saying that it corrects the overly optimistic revenue projection of the previous government, Capital daily reported.

The bill raises Bulgaria's 2013 deficit by BGN 493mn to BGN 1.7bn (2% of GDP, up from 1.3% of GDP before). Revenue is expected to fall short of the original estimate by BGN 207.4mn, while the projection for total expenses is raised by BGN 286mn. The government will provide the extra funds by issuing debt. For that purpose the new law lifts the amount of new debt the government is allowed to borrow during the current year from BGN 2bn to BGN 3bn. PM Plamen Oresharski has said that BGN 40mn will be spent on social welfare and the state will use some BGN 160mn to clear outstanding liabilities to the private sector. The government also plans to pay agricultural producers early subsidies by the end of 2013.

The revision was supported by local trade unions, while the country's largest employers' organisation, the Confederation of Employers and Industrialists (KRIB), opposed it on the grounds of non-transparency. This was also one of the president's arguments against it. He imposed a line-item veto on the bill, rejecting the three main provisions in it - those about the state's revenue, expenses and debt. Plevneliev stated that the government should attempt to improve revenue collection and increase the efficiency of the public administration. He also said that it is not worth accumulating debt that will be used to cover current expenses instead of improving Bulgaria's competitiveness.

Bulgaria posted a BGN 7.6mn budget deficit at end-June 2013 versus a BGN 62.4mn surplus a year earlier.

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