Day of high political drama as Bulgarian PM threatens resignation if 8BN euro debt vote fails
Voting by Bulgaria’s Parliament on ratification of the country incurring new external debt of eight billion euro over the next three years was postponed in the face of opposition to the government proposal, including from two parties backing the coalition government – and with Prime Minister Boiko Borissov threatening to resign if the vote failed.
Around the middle of the day on February 18, Finance Minister Vladislav Goranov held talks with representatives of the four parties supporting the government, seeking to secure full backing. Emerging from the talks, he declined to comment to reporters.
Apparently sensing a chance, the opposition Bulgarian Socialist Party and minority opposition Ataka called for the extension of Parliament’s working hours, in a manoeuvre they seemed to hope would see the vote to ratify defeated.
Speaking before the day’s scheduled cabinet meeting, Borissov said that if the vote failed, he would allow other parties to try to find six billion leva by the end of the year.
According to Bulgaria’s Finance Ministry, of the 16 billion leva equivalent of the eight billion euro, provision already had been made for external debt of 6.9 billion leva in 2015, as reflected in the Budget Act approved by the National Assembly towards the end of last year.
On February 6, Bulgaria’s centre-right coalition cabinet signed agreements making provision for a global medium-term note (GMTN) programme of bond issues of up to eight billion euro, with the total volume annually governed by debt provisions in the annual budget acts.
Tabled for approval by Parliament are the agreements for the package, including a dealer agreement between Bulgaria, as one party, and Citigroup Global Markets, HSBC Bank, Societe Generale and UniCredit Bank, on the other side.
After the talks with Goranov, the Patriotic Front – the nationalist coalition that in November 2014 signed on to support Borissov’s government without participating in it – said that its MPs would vote their conscience. PF MP Slavcho Atanassov told reporters that he had not been persuaded by the arguments for the borrowing.
Georgi Purvanov, leader of socialist breakaway party ABC – which also agreed last year to support the new government and has a deputy prime minister in it – said that no one’s resignation, including Borissov’s scared him, and he did not want to make decisions under pressure. Purvanov confirmed ABC’s opposition to ratification of the agreements on the loan.
Goranov told reporters that in the absence of other instruments, “the only instrument in the hands of the government is taking on debt”.
He said that the debate was an important one and it was misleading to believe that the budget deficit was the problem solely of the government.
Goranov conceded that communication between the Finance Ministry and the National Assembly had been inadequate.
Radan Kanev, co-leader of the Reformist Bloc, GERB’s minority partner in the cabinet, said that it was natural that when communication between the Finance Ministry and the majority in Parliament were belated, there would be tensions.
In debate, Kanev said that it was a lie that this was new debt.
New debt could be voted only in upcoming budgets or in voting amendments to the current budget, which would not happen because Bulgaria had a stable government about which it was known that it would not update the budget three times a year, Kanev said.
Roumyana Buchvarova, senior GERB member and deputy prime minister in charge of coalition policy, told reporters that she was concerned about the issue being politicised, “and in a very cheap way”.
“Our proposal is not to so as to be able to continue our government, but to be able to continue the life of the people. To go forward normally,” she said.
Buchvarova said that contact would be sought with the coalition partners, and the Bulgarian Socialist Party and Movement for Rights and Freedoms would not be invited to talks unless they requested this.
“How can you continue to govern if you have no money?” Buchvarova was quoted as saying in local media reports.
The BSP several times requested that the Prime Minister come to the plenary and that debate be postponed until then. “To be here in the House to explain exactly how the money will be spent,” BSP MP Krassimir Yankov said.
Earlier, before proceedings began, the BSP tried to have the debate on the ratification postponed altogether, alleging irregularities in committee approval.
BSP MP Roumen Gechev said in debate that there were many unknowns. He said that there should be a public competition to choose the banks that would handle the borrowing, which would achieve more favourable conditions for Bulgaria. Currently, it was unknown how much these banks’ services would cost Bulgaria, Gechev said.
Local media reported that Patriotic Front co-leader Krassimir Karakachanov had hinted that in spite of the PF’s parliamentary group decision against supporting ratification, this could change. Such a decision by Parliament should be discussed with both MPs and Bulgarian society, with matters clarified with the public to avoid speculation.
It is now expected that the vote on the ratification will be held next week.
In the morning, as debate started, a group of a few dozen supporters and MPs from the BSP and Ataka held a protest outside the National Assembly building against the borrowing. Protesters said that the borrowing would take generations to pay off, Bulgarian National Television reported.
