Bulgarian Cabinet to inject up to 700M leva into state bank to help economy

Written by on March 25, 2020 in Bulgaria - Comments Off on Bulgarian Cabinet to inject up to 700M leva into state bank to help economy

Bulgaria’s Government decided on March 25 to increase the equity of the Bulgarian Development Bank (BDR) by up to 700 million leva (about 358 million euro), as part of a package of measures to help businesses overcome the disruption caused by the Covid-19 pandemic and State of Emergency declared in the country.

The package was announced by Prime Minister Boiko Borissov at a news conference the previous day. The cash injection announced by the Cabinet was larger than the 500 million leva that Borissov initially mentioned.

BDR’s equity hike would be used to issue portfolio guarantees to commercial banks, which would allow them to offer “more flexible terms” on their loans to businesses.

“The measures that BDR is envisioned to take will aim to ensure access to financing and supporting the activity of small and medium-sized enterprises affected by the Covid-19 pandemic, in order to minimise the risk of a liquidity crisis,” the Cabinet’s media statement said.

But the list of decisions taken at the Cabinet’s weekly sitting did not include any mention of the additional 500 million leva to cover increased personnel costs for the defence, interior and health ministries, announced by Borissov on March 24.

In another decision, the Cabinet moved to seek permission from the European Commission to exempt certain medical goods needed to fight the Covid-19 pandemic from value-added tax and customs duties.

Finally, the Cabinet also approved the guidelines drafted by the Health Ministry regarding the use of donations made to the ministry’s special account to fight the pandemic.

For the rest of The Sofia Globe’s continuing coverage of the Covid-19 situation in Bulgaria, please click here.

(Bulgaria’s Council of Ministers building photo: government.bg)

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