Bulgarian Parliament passes 2017 Budget Act at first reading

Written by on November 18, 2016 in Bulgaria - Comments Off on Bulgarian Parliament passes 2017 Budget Act at first reading
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Despite the unravelling of Bulgaria’s government coalition and the resignation of Prime Minister Boiko Borissov’s cabinet earlier this week, the draft 2017 Budget bill passed with a sizeable majority at first reading on November 18.

For all the bluster from the two largest opposition parties in the National Assembly, the socialists and the predominantly ethnic Turk Movement for Rights and Freedoms (MRF), they could not muster the numbers needed to defeat the bill, which passed with 102 votes in favour and 58 against, with 11 abstentions.

The bulk of the votes in favour, 75, came from Borissov’s GERB, with some support from the Reformist Bloc, the populist Bulgarian Democratic Centre and opposition ultra-nationalists Ataka.

Prior to the vote, outgoing finance minister Vladislav Goranov said that failure to pass the bill would have wide-reaching impact, delaying the planned increase of the minimum salary, preventing the scheduled increase of excise duties that Bulgaria has to carry out in line with its commitments to the EU, as well as slow down the absorption of EU funds because there would not be enough national co-financing for projects.

Goranov’s arguments were echoed by Naiden Zelenogorski, one of the Reformist Bloc’s MPs that backed Borissov’s cabinet, who said that failure to pass the bill would leave the country without a Budget for at least six months. (Following Borissov’s resignation, Bulgaria faces early elections in spring and the constraints of the legal budgetary procedure make it unlikely that the next government would be able to pass a budget before summer.)

Socialist MP Roumen Gechev made a renewed plea for scrapping the flat tax – introduced by the socialist-led cabinet of Sergei Stanishev in 2008 – and replacing it with a progressive taxation system, but found little support on the House floor.

Given the complications of making such a drastic change at the last hour, Gechev’s discourse appeared more like a calculated attempt to stake his party’s credentials on this issue in case it wants to make it a key part of its manifesto ahead of the snap elections.

With the socialists refusing to consider any support for the bill without a change in the income tax, the MRF and socialist splinter ABC used the same excuse to justify their opposition to the bill, saying that next year’s Budget needed “a consensus” between major parliamentary parties – and without the socialists, such a feat was impossible to accomplish.

A day earlier, Parliament also adopted the framework bills for the healthcare and social security budgets, with the absence of opposition MPs once again helping the bills pass.

Should the same pattern repeat itself later this month, when the bills go to the House floor for the second reading, it appears likely that the 2017 Budget Act will pass without too much difficulty.

(Bulgarian Parliament photo: Clive Leviev-Sawyer)

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