Financial expert warns of Bulgaria’s fiscal crisis as budget deadline approaches

Bulgaria’s fiscal history is going downhill. We stuck it out. If there is no budget for 2023 on June 10th, just let me not be rude, but the latch is falling. We are going to zero balance and can’t spend a single penny more. Financial expert Mika Zaikova commented this to “Focus”.

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“I don’t see how they will succeed, and we have some deadlines that we cannot miss. The 2022 budget was extended, but according to the fiscal law, it can be extended for three months. And since the three months have long passed, came out a new so-called extended budget law, which, however, ends on June 10. On top of that, in order to be able to spend at all, we have to see in the fiscal reserve. However, there are actually only 200 million there. With these 200 million, what should we pay in advance – the pensions for the month of June, which are over 3.8 billion? And don’t forget that 12% pension increase to come. Which means more. On top of that, some of my colleagues in an effort to enter the eurozone faster, they want to reduce the deficit to 3%. Reducing the deficit by 3% without touching any taxes, because in a time of crisis, and we are in an incredible crisis – political, economic, financial, social, you name it – in times of crisis, taxes are not touched. This is an absolute law. Otherwise, things get worse.”commented Mika Zaikova.

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according to her the budget proposed by Mrs. Velkova reflects all expensesto be made after the decisions taken by the 46th, 47th and 48th Parliaments.

“It reflects the real situation. This means a 6.4% deficit, or in money – it’s close to 12 billion. This practically means that we with the money we have, if we have to cover it, or we have to cut, which it is called to the bone, or we have to borrow, i.e. increase the debt. The thing is that the debt ceiling cannot be raised just like that, from today to yesterday, and take some 14 billion”she explained.

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She specified that new debt is not guaranteed: “Investors will be very careful and the question is will anyone buy our securities. I’m not talking about the yield on these securities. It will be high and it will be above 5, 6 or 7, it can even reach 8%, which further increases the cost of what we are going to do with our budget, with another 1 billion in interest alone. And since the 10th of June is about twenty days away, the thing that can be done is this: first, that they do, if they think of it, another extension, to raise the debt ceiling so that deficit can be covered with new debt. And let us pray to God that our securities may be sold. Because if they are not sold, then we will kneel before the International Monetary Fund, and things are very serious there. We are already in a currency board and this will further aggravate the fiscal situation of Bulgaria”the financial expert was emphatic.