New row over Bulgarian government plan to borrow three billion leva

Written by on June 4, 2014 in Bulgaria - Comments Off on New row over Bulgarian government plan to borrow three billion leva

Bulgaria’s embattled government is embroiled in a new row over a plan to borrow three billion leva (about 1.5 billion euro), which the opposition says will “finish Bulgaria”.

The Bulgarian Socialist Party cabinet tabled the bill in the National Assembly on May 30, just a few days after the BSP’s resounding defeat in European Parliament elections, and discussions on it were due to start in the parliamentary committee on budget and finance on June 4.

The bill also was on the agenda for a June 4 meeting of the committee on foreign policy.

The draft legislation provides for a number of banks to handle a bond issue of 1.493 billion euro in one or more tranches.

At a news conference on June 3, Boiko Borissov, leader of centre-right opposition GERB and Bulgaria’s prime minister from 2009 to early 2013, said that the loan would “finish Bulgaria” and added that he expected that in coming days, credit rating agencies would downgrade Bulgaria’s credit rating.

“The state has collapsed,” Borissov said, citing critical reports and measures on the part of the European Commission.

“How many times do we have to tell (prime minister Plamen) Oresharski that the revenue agencies are not working, while they use money that comes from loans?” Borissov said.

The GERB leader said that there would be “irreversible consequences” from the three billion leva borrowing.

“Companies are starting to file claims over unpaid money (by the state). There is no money for waste depots, there is no money for the factories, there is no money under the environment operational programme. Nothing can be done. The money has been lost for good,” he said.

“Because of the irreversible damages, which the current government has caused, and the huge amounts of money that Bulgaria would have to pay over the next years, it is too late to avoid a catastrophe,” Borissov said.

There was no plan to lead Bulgaria out of the catastrophe and every party supporting the government was an accomplice in this catastrophe, he said.

Also on June 3, Petar Chobanov, finance minister in the BSP cabinet, dismissed allegations by GERB and the centre-right Reformist Bloc that Bulgaria’s budget was at risk and the country could go into default as “neurotic talk”.

“Categorically, there is no reason to say that Bulgaria is faced with default,” Chobanov told public broadcaster Bulgarian National Radio. He said that the fiscal reserve was six billion leva at the end of April.

In a statement in the National Assembly on June 4, the BSP parliamentary group said that Bulgaria was “financially sound and that’s the truth”.

The statement was read out by BSP MP and deputy head of the budget committee, Petar Kanev, in connection with the forthcoming ratification of the agreement with the three banks on the three billion leva bond issue.

He said that for several days, financiers had filled the public space with nonsense about the bond issue, and some people from GERB had joined them in this. “We are talking about the same loan that was voted in December in the budget for 2014,” Kanev said.

(Photo: G Schouten de Jel)

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