| Finance minister Simeon Dyankov said that the government may introduce a government debt ceiling of 40% of GDP to match the planned financial stability pact of the eurozone countries, Dnevnik Daily reported. The Pact is to go in line with aid provided under the European Stability Mechanism, which envisages up to EUR 500bn in support to EU countries as of July 1, 2012. It will set targets for annual structural budget deficits below a specific for each country ceiling, which will guarantee safe level with respect to the 3%-of-GDP limit, and government debt below 60% of GDP. To guarantee the financial stability of the country, at the beginning of this year the government proposed the so-called financial stability pact comprising three components: the consolidated budget expenditures including EU funds should not exceed 40% of GDP; the budget deficit must be below 2% of the annual GDP and direct tax rates may be changed if only 2/3 of the deputies agree. The first two rules have already become part of the countrys legislation and are already present in the state budget law while the latter is expected to become part of the constitution. |
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