Hungary Watchdog: Bulgaria-Proposed Change on Debt Cosmetic

The proposed recalculations relate to grants to private pension systems. Photo by EPA/BGNES

A Hungarian independent budget watchdog has slammed as unviable a proposal from nine European Union countries, including Bulgaria, to change the way debt among member countries is calculated.

"From our perspective, this (proposal) is little more than cosmetic," the chairman of the Budget Council, Gyorgy Kopits, told reporters.

According to other members of the body the proposal does not create more fiscal room for governments and markets would not take for the credible the resulting lower overall budget deficit figures.

“This would be something we would believe, but markets wouldn’t,” they said.

Bulgaria, Poland, Sweden and six other countries sent the EU a letter asking for a change in the way country debt is calculated.

The letter, addressed to the European Commission and EU President Herman van Rompuy, was signed by the finance ministers of the countries, which also include Hungary, the Czech Republic, Romania, Slovakia, Lithuania and Latvia.

The proposed recalculations relate to grants to private pension systems.

The European Commission has said the proposal is relevant. It is expected to draft answers to the proposal over the next few days, before the next meeting on the Task Force on Sept 6.

Meanwhile the German government expressed skepticism about the proposal, saying the change would also disadvantage governments that have chosen different ways of reforming their pension systems and share the costs of the reform differently.

European Union finance ministers will meet on September 6-7 to discuss new ways to monitor and shape economic policy.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!