EC Puts Off Setting Bulgaria under Excessive Deficit Procedure

The EC expects new macroeconomic data about Bulgaria to decide on starting an excessive deficit procedure. Photo by EPA/BGNES

The European Commission has delayed the start of setting Bulgaria under the so called excessive deficit procedure as it expects new macroeconomic data from the country.

This has been clarified by Amadeu Altafaj, Spokesperson for the EU Economy Commissioner Olli Rehn, as cited by BTA.

The European Commission was expected to decide on Wednesday to set Bulgaria under the excessive deficit procedure, a special procedure under EU’s Stability and Growth Pact to ensure that member-states reduce swiftly their state spending, and keep their budget deficit below 3% of the GDP.

After that the Commission was supposed to table a proposal to the EU Council, which was expected to decide on July 13, 2010, whether to approve setting Bulgaria under the excessive deficit procedure.

The EC, however, is now in expectation of new data about Bulgaria’s macroeconomic condition, and only after that it will decide on whether and when to submit a proposal to the Council for setting the country under the procedure requiring a reduction of the state deficit, Altafaj has said in the wake of a report on state finances in the European Monetary Union.

The European Commission recently announced it was sending an exploratory mission to Bulgaria to assess the reliability of the country's statistics, which were significantly revised in a short period of time "from a balanced budget to a deficit".

At the end of April Bulgaria's Prime Minister Boyko Borisov and Finance Minister Simeon Djankov said the previous Socialist-led government had kept them in the dark over BGN 2.16 B contracts, which pushed the 2009 deficit up from a projected 1.9% to 3.7% of GDP

In the first of its twice-yearly reviews of government finances in the 27-member bloc, Eurostat said the Bulgarian government's budget deficit was 3.9% of gross domestic product last year.

According to Amadeu Altafaj, it was currently impossible to fix a date about when the Council might consider setting Bulgaria under an excessive deficit procedure because this can be known only after the European Commission submits such a proposal if it decides to do so.

Upon publishing its euro zone convergence report, the EC said Bulgaria together with several other EU states will be set under the procedure in order to curb its newly-emerging excessive budget deficit.

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