Bulgarian Parliament approves 2018 Budget Act at second reading

Written by on December 1, 2017 in Bulgaria - Comments Off on Bulgarian Parliament approves 2018 Budget Act at second reading

Bulgaria’s National Assembly has given its final approval to the 2018 Budget Act after a marathon of two late-night sittings, ending at the November 30 deadline for giving the nod to the legislation.

There was last-minute drama late at night on November 30 when the sitting was adjourned to resolve a legal problem over measures approved at the 18-hour sitting the night before, when a contradiction was created over a large sum voted for restoration of Sofia landmark Alexander Nevsky cathedral.

On December 1, the opposition Bulgarian Socialist Party (BSP) said that it would lodge an objection to the procedure by which this measure had been voted to the Constitutional Court.

In the earlier phases of voting on the Budget Act that ended at 3.30am on November 30, Mps approved the budget framework for 2018, including revenue, aid and donations at 23.5 billion leva, revenue from taxes at just more than 21 billion leva, with spending at 11.9 billion leva and current expenditure at close to 9.5 billion leva.

The 2018 Budget Act envisions a consolidated fiscal programme – which includes the state Budget, local administration budgets, healthcare and pension funds – with total revenues of 38.2 billion leva, up from the 34.9 billion leva currently envisioned for 2017. The initial estimates for 2017 set revenues at 35.4 billion leva.

The shortfall in revenue this year is mainly due to the amount of EU funds received by Bulgaria. Initially targeting 2.61 billion leva for 2017, the Finance Ministry’s current estimates put the total amount at 1.37 billion leva. On the spending side, the amount of EU funds disbursed this year is currently estimated at 1.94 billion leva, compared to the 3.15 billion leva initially envisaged by the ministry.

Spending in 2018 will jump sharply, to 39.3 billion leva from 34.9 billion leva currently envisioned for 2017 (original estimates put it at 36.8 billion leva this year). Areas set to receive increased funding are education at 3.84 billion leva in total, an increase of 490 million leva compared to the 2017 Budget; healthcare with 4.71 billion leva, an increase of 485 million leva compared to the 2017 Budget; and social care spending, which will increase by 743 million leva compared to the 2017 Budget, reaching 13.07 billion leva.

Budget Act 2018 sets the statutory minimum salary at 510 leva (about 260.75 euro).

On November 29, the National Assembly approved a balanced consolidated budget for public social insurance in 2018 and a four billion leva deficit in the pension scheme. Public social insurance budget revenue and spending are both projected at more than 11 billion leva.

The Budget Act 2018 was approved over the objections of the BSP, which described it as having no clear vision and of being in service of corporate interests.

During the lengthy sittings, which featured the customary fractious arguments and periodic adjournments for rest, the BSP tabled numerous amendments – for example, proposing to increase the budget for public broadcasters Bulgarian National Radio and Bulgarian National Television by five million leva – all of which were rejected.

The BSP earlier had held a news conference about its own “alternative budget” but nothing came of this.

The Movement for Rights and Freedoms, Parliament’s fourth-largest group, saw Budget 2018 and including well-planned GDP and decently-planned revenue, but criticised spending as failing to be directed towards essential reforms.

At the close of voting, Finance Minister Vladislav Goranov made an ironic reference to the succession of late-night sittings, saying that in winter the Budget could not be voted on in the light.

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About the Author

Clive Leviev-Sawyer is the Publisher and Editor-in-Chief of The Sofia Globe. He is the author of the book Bulgaria: Politics and Protests in the 21st Century (Riva Publishers, 2015).