PM: Bulgaria Ready Steady for EU Fiscal Pact by March 2012Bulgaria in EU | December 10, 2011, Saturday // 11:28| views
Bulgaria’s Prime Minister Boyko Borisov (pictured) says there are many similarities between the EU Fiscal Pact and the so-called Financial Stability Pact, proposed by Finance Minister Simeon Djankov. Photo by EPA/BGNES
Bulgaria's prime minister, who is struggling to ensure deeper European integration for his country, has said it will fully implement the main measures envisaged in the EU new fiscal compact by March 2012.
"Many of the ideas adopted in Brussels coincide with the proposals of Finance Minister Simeon Djankov, enshrined in the so-called Financial Stability Pact. We have held talks on these issues and these will continue in the coming weeks," Boyko Borisov told reporters in Brussels at the end of the European Council summit.
He reiterated that Bulgaria will not join Brussels' efforts to ensure additional money for boosting rescue funds.
Bulgaria supported the new deal, which the majority of European leaders agreed on early Friday in a bid to tighten fiscal discipline in the eurozone and tackle the bloc's debt problems.
Twenty three states - all seventeen eurozone members and six other EU nations, including Bulgaria - agreed to adopt an accord with penalties for breaking deficit rules.
Four countries including Britain however refused to back a new intergovernmental treaty to deepen the integration of national budgets, raising concerns that the EU may turn into a two-tier system.
The main measures agreed to as part of the new agreement, called a "fiscal compact" include:
- a cap of 0.5% of GDP on countries' annual structural deficits;
- "automatic consequences" for countries whose public deficit exceeds 3% of GDP;
- the tighter rules to be enshrined in countries' constitutions;
- European Stability Mechanism (ESM) to be accelerated and brought into force in July 2012;
- adequacy of EUR 500 B limit for ESM to be reassessed;
- Eurozone and other EU countries to provide up to EUR 200 B to the IMF to help debt-stricken eurozone members.
Speaking to Dow Jones Newswires in an interview, Finance Minister and Deputy Prime Minister Simeon Djankov said Bulgaria "100% support" Brussels’ proposal, which it would qualify for comfortably.
"Bulgaria 100% supports the proposal...in fact, we have already adopted the legislative changes for the Maastricht criteria and advise every EU country to do the same as fast as possible," Djankov said.
"In our view there has to be a treaty change eventually but its not necessary immediately...we can start with bilateral agreements...this is needed the sooner the better."
The three main pillars of Bulgaria's Finance Minister Djankov's Financial Stability Pact to be solidified via constitutional amendments are:
- introducing a limit to allowed budget deficit;
- restricting the ability of the state to redistribute public funds as a percentage of the GDP;
- introducing a qualified majority vote of two-thirds of the votes in Parliament to change Bulgaria's direct taxes.
The plan envisages capping the budget deficit at 2% of GDP product and spending at 40% of GDP.
Djankov's Financial Stability Pact is expected to enter into force as of January 1, 2013, several months before the expiration of the four-year term of the Borisov Cabinet and before the regular parliamentary elections provided that the government serves its full term. This means that the Pact, if approved, will be in force for those ruling Bulgaria after the present Cabinet of Boyko Borisov.
Djankov believes that the proposed measures will "cement" Bulgaria as having one of the strictest fiscal policies in the European Union.
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