Bulgaria to Pay Foreign Debt by Combining 3 Sources

Bulgarian Finance Minister, Simeon Djankov, says the investment rating of the country and its macroeconomic indicators enable market financing - both local and on international capital markets. Photo by BGNES

Bulgaria's cabinet plans to diversify sources for collecting the needed BGN 2 M to pay foreign debt due at the beginning of 2013.

The statement was made in the Parliament Friday by Deputy Prime Minister and Finance Minister, Simeon Djankov, who spoke during the so-called parliamentary control when Members of the Parliament pose questions to ministers from the cabinet.

According to Djankov, these sources include privatization of unnecessary State assets, short-term government securities, and mid-term 5 or 7-year Euro bonds in equal shares - one third of each.

The Minister reminded that the State Budget 2012 Act sets the maximum amount of new foreign debt at BGN 2 B.

He stressed that the investment rating of the country and its macroeconomic indicators enable market financing - both local and on international capital markets.

The Co-Chair of the right-wing Blue Coalition, Martin Dimitrov, questioned the collection of one-third of the debt proceeds from privatization. He said the State must leave buffers to each of the three options and should not invest massive resources from the Silver Fund in government securities.

Djankov recently proposed changes to the governance of the Silver (Retirement) Fund that would enable a more active management of the collected funds and the investment of up to 70% of it in government securities.

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