Bulgaria Achieves Half of Planned Budget Cuts

Bulgaria’s Finance Minister, Simeon Djankov, gives a press conference Saturday after the conclusion of a special meeting of the Administrative Reform Council, which aims at reducing expenses of the State Administration by 20%. Photo by BGNES

The result from the reduction of expenditures of Bulgarian Ministries is BGN 426 M from the needed BGN 900 M, Finance Minister, Simeon Djankov, reports.

Djankov spoke Saturday after the conclusion of a special meeting of the Administrative Reform Council, which aims at reducing expenses of the State Administration by 20% to compensate for the scrapped increase of the Value Added Tax (VAT).

Djankov listed the Ministries high-achievers in this effort and those with “failing” grades. The first group includes the Health Ministry with 22%, Economy Ministry and the Regional Ministry with 20% each, while the Foreign Ministry with 7.4% and the Culture Ministry with 2.7% fall into the second one.

In the middle are the Ministry of Education with 8%, the Finance Ministry with 15%, the Transportation Ministry with 12% while the Council of Ministers had proposed a 20% reduction. The Labor and Social Policy Ministry would not be subject to optimization in order to not hurt the disadvantaged. The same is valid for the Defense Ministry over exhaustion of possibilities for cuts there.

All institutions have a Monday deadline to report on additional cuts of their expenditures. The measures will be summarized Tuesday and examined by the Council of Ministers Wednesday.

Meanwhile Prime Minister, Boyko Borisov, who is visiting the northern city of Pleven, said the budget expenses for salaries in 2010 will be BGN 200 M less, compared to 2009.

Borisov explained that using the fiscal reserve to fill the State budget gap is a possibility but still needs assessment and the decision is only forthcoming.

According to the PM, the budget deficit is up over 2 main reasons: the need to finance infrastructure projects, which will yield great returns for the economy and the social expenses which are unavoidable.

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