/ world today news/ It is too late now for anyone to ask whether and why we should take on this debt. This is about obligations not from I don’t know how old you are, as they say. We are talking about a debt of EUR 900 million, made by the first government of Boyko Borisov, whose maturity date is 2017, and the debt from the end of 2014 of BGN 3 billion to fill the so-called guarantee fund to cover the deposits in KTB. And the 400 million euros taken in December by Borisov’s second government are likely to provide the necessary funds to pay farmers and, of course, to have the necessary funds for the first days of the year.
“There is one text that has not been paid attention to by those who are now reacting very violently, but a little late. This text empowers the Council of Ministers to enter into medium-term debt issuance agreements. There is no number in this general text.” This is how Prof. Hristina Vucheva commented on VOICES the reasons for the scandal that broke out on the occasion of the BGN 16 billion requested by the government. Prof. Hristina Vucheva is an economist and a long-time lecturer at UNSS. She is a former Minister of Finance and Deputy Prime Minister in the first caretaker government with Prime Minister Reneta Injova /1994-1995/.
– Prof. Vucheva, does Bulgaria need a loan of BGN 16 billion?
– In the Budget Law for 2015, it was expressly voted by all those who support the budget and the government that there will be a new debt in 2015 in the amount of BGN 8 billion. In fact, this is the amount of the new debt that the budget accepted for 2015. Nothing more has been accepted so far.
However, there is one more text in the Budget Law for 2015 that has not been paid attention to by those who are now reacting very violently, but a little late. This text empowers the Council of Ministers to enter into medium-term debt issuance agreements. There is no number in this generic blanket text. This means that if we are a country that wants to abide by the laws, and we constantly claim that we are a democratic country and a member of the European Union, then every representative of the people could vote, regardless of which party he belongs to, a new debt only in the amount to BGN 8 billion This is in the Budget Law.
– But BGN 16 billion is being offered?
– From now on, someone had to explain very seriously why these BGN 16 billion are being offered, that is, twice the amount. And so now they are in this explanation mode and of course the parliament is within its rights to vote anything as long as it is convinced. I, as a specialist, tried to explain that our obligations that we have to repay, which is something that every country does when they take on old debts from previous years, are for 2015, 2016 and 2017, what is the deadline for the so-called medium-term debt agreement of no more than BGN 10.8 billion.
This, with the necessary clarifications, could be voted on once they agree. This is the rounded amount, and if we talk in euros – somewhere around 5-6 billion euros. This could allow the government to meet the maturities of a debt taken out in late 2014, which is short-term, several times, and a debt of Mr. Dyankov from 2010, which matures in 2017. These are the main old debts that are due to be paid and cannot be bypassed. The rest are the deficits in the three years that we have under the medium-term program adopted by the government and under the Budget Law for 2015. So the deficit for 2015 under the state budget could have been completely covered by the budget and the currently existing fiscal reserve . The remaining two years – 2016 and 2017, again – there will be a deficit of BGN 4 billion, which is easily included in the number I announced.
That is, the old maturities, plus those 4 billion BGN for 2016 and 2017, represent the 10.8 billion BGN that the government can take, they have already given it the right to conclude with whom and how it wants to issued this debt on behalf of Bulgaria. The question is, if parliamentarians wish to discuss, only to agree on the amount, what are the fees, what are the interest, commissions, etc. Anyone who incurs any debt to anyone is interested in what it will cost them.
This is how things stand in my opinion, and it is very late now for anyone to ask whether and why we should take on this debt, and here we are talking about obligations not from I don’t know how many years, as they say. We are talking about a debt of EUR 900 million, made by the first government of Boyko Borisov, whose maturity date is 2017, and the debt from the end of 2014 of BGN 3 billion to fill the so-called guarantee fund to cover the deposits in KTB. And the 400 million euros taken in December by Borisov’s second government are likely to provide the necessary funds to pay farmers and, of course, to have the necessary funds for the first days of the year.
– What information did you have for your analysis?
– What I am talking about is completely official information and everyone can see it on the official page of the Ministry of Finance.
– How do you then explain the big discrepancy in the accounts and arguments of the politicians?
– I do not know that and it is difficult for me to answer you. But it is true that there is a divergence, perhaps because the subject itself is not very accessible to everyone. But there is also an underestimation on the part of these pretentious people and great specialists from the “Reformation Bloc”. They should have shown themselves as specialists at the end of November and the beginning of December, when the Budget Law was discussed and when this text was entered, authorizing the government to conclude such a medium-term agreement. But apparently they haven’t noticed. And then it was time for them to ask what a medium-term agreement means, why a medium-term agreement, is it cheaper, is it better.
But then that discussion is gone, no one talks about it. That is the conclusion I reach and the answer to the question you ask me. Insufficiently good and professional attitude on the part of the ruling party and the opposition. And the “Reformation Bloc” is now asking some questions, as if they were not in the parliament when these things were discussed.
– How do you explain this difference, which is obtained from the real needs for debt repayment and the requested amount from the government?
– The sum of 8 billion euros is not to be underestimated. Apparently there is something that is not in the official information. If anyone knows anything more than this official information, please explain. But again I say that what it has in the official payment information is not more than 6 billion euros. Personally, I am embarrassed by this disagreement and by so many inaccuracies that have been spoken, and I think that it is not useful for Bulgaria.
– And if in the meantime we enter the Eurozone, how will this debt affect the economy?
– In the meantime, we cannot enter the Eurozone, because they have not yet accepted us in the entrance hall, where we must stay for at least two years. And in my estimation and looking at how things are going, we won’t be there anytime soon for a lot of reasons, but that’s a separate conversation. Not the debt we have now, and not the debt we will take on by 2017, can be the reason they don’t accept us, because for the ratio of debt to gross domestic product, we are in a very good position.
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