/ world today news/ Bulgaria has an obligation to pay the debt that was taken at the end of December 2014. This credit is short-term and was taken to grant a loan to the Deposit Guarantee Fund. This loan has a short period and must be paid in 2015. It is the largest, the amount in BGN is 3 billion.
In addition to it, we have two other short-term loans, also taken by this government in December 2014. Their maturities are also in 2015. They were drawn on the domestic market, but they are denominated in euros. Each of them is for 400 million euros or a total of 800 million euros / i.e. about BGN 1.6 billion/. In total, we owe BGN 4.6 billion in a short period of time. There are no more maturities in 2015.
In 2016, payments for issues that were issued in previous years are due, but their amount does not amount to more than BGN 200 million, i.e. duties are very few.
In 2017, there is one big amount. It comes from a loan that was taken at the time when Simeon Dyankov was finance minister /2009 – February 2013/. It is about 950 million euros or, roughly speaking, about 2 billion BGN.
We have 4.6 billion due in 2015, 200 million – in 2016, 2 billion BGN – 2017. These are the maturities we owe during this 3-year period. All the rest are short-term issues that are redeemed in the domestic market. They do not go into this account.
Errors arise from double counting. Once a deficit is calculated, which is financed by some borrowing, then the borrowings are calculated and this inflates the bill.
However, it remains to calculate the deficits during these 3 years /2015-2017/. In this year, the deficit can be completely covered by the amounts we have in the Fiscal Reserve up to this point without breaking the balance that we have to maintain and without touching the money that is in the so-called Silver fund. In 2016, a deficit of about BGN 2 billion is expected and almost as much in the following year 2017. I.e. for these two years, the total amount will be about BGN 4 billion.
A total of BGN 10.8 billion are the sums that cover the state’s need for funds for the period 2015-2017. These are the official figures, from now on other figures can be indicated only if someone knows something more that is absent in this official information . These figures can be included but must be explained. There are interests that are on maintenance, but I do not count these interests and they should not be counted, because the interests go in the current budget expenses. They affect the deficit itself, i.e. through the deficit itself we have calculated them. Therefore, the methodology must be standardized here, and it is as follows. Long-term commitments and maturities in those years must be taken into account and the money needed for the deficit calculated. The deficit for 2015 /about BGN 2.5 billion/ can easily be covered with these amounts that are in the Fiscal Reserve.
The budget is a very important institution. It is related to the voting of a law. It is not by chance that the world practice is for the law to be 1 year old. If we have decided to enter into a medium-term debt financing agreement, we should clearly indicate that the issuance of long-term securities will be consistent with the debt limits in the annual budgets.
We all need to unite around a common methodology and put aside partisan talk and false talk. This is important for Bulgaria, to stop putting it in a bad light, because it is important for the placement of bonds and their yield.
My analysis is based on the Bulletin published by the Ministry of Finance on the public debt and the estimated budget for the period from 2015 to 2017, adopted by the Council of Ministers in early 2015.
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Professor Hristina Vucheva, financier. She was Deputy Prime Minister and Minister of Finance in the first caretaker government /1994-1995/ of Bulgaria after the changes in 1989.
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