Oresharski speaks on Budget revision

Written by on July 5, 2013 in Bulgaria - No comments

Plamen Oresharski has outlined why the Bulgarian Socialist Party government wants to revise the 2013 Budget and has criticised the management of the country’s finances by the former government of Boiko Borissov’s centre-right GERB.

Oresharski, appointed in May to sit in the prime minister’s chair in the government voted into office by the BSP and the Movement for Rights and Freedoms, spoke in Parliament – addressing MPs from these parties in the less-than-half-empty hall given the GERB boycott.

He said that the government was bound by financing agreements to pay more than a billion leva by the end of this year, but half of that money had not been planned for in the 2013 Budget.

The financial commitments for the next years are 1.6 billion leva in total. This sum does not include the indebtedness of hospitals. If that is added, the government will have to pay debts of three billion billion this year and in the next years, Oresharski said.

He said that in February, the GERB government issued a foreign loan of 800 million leva. The date of payment is in August, which means that 800 million leva more will have to be paid, he said.

Oresharski said that indebtedness of state-owned companies had soared. These companies, most in the energy sector, faced a difficult future because of these debts, he said.

“This year’s budget was planned optimistically on the basis of unrealistic expectations. This scenario did not come true. Since the beginning of the year the collection rate of revenues keeps on to be negative as in the recent years. In the first five months the revenues from VAT are only 38 per cent of those originally planned and from excise duties, 33 per cent,” he said.

“Measures have been worked out to improve the collection rate of revenues,” Oresharski said.

He said that the years of the GERB government, from mid-2009 to February 2013, could be described as “a period of a strongly worsened fiscal position and de-capitalization of the state-run companies”.

According to Oresharski, public finances in that period worsened by nearly eight billion leva. The fiscal reserves dropped by four billion leva. Public debt rose by four billion leva in the same period – from 10 billion leva in 2009 to 14 billion in February 2013, according to Oresharski.

 

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