Bulgarian Govt Approves Bill on Public Finances

Prime Minister Boyko Borisov (R) and Finance Minister Simeon Djankov (L) pictured before the start of a regular session of the Council of Ministers held on September 19. Photo by BGNES

The Bulgarian government has approved a bill on public finances which will serve as the statutory framework for the preparation of the state budget and the municipal budgets for 2014.

The law is to enter into force as of 2014 and aims to ensure a sustainable medium-term budget environment.

The National Association of Municipalities in the Republic of Bulgaria (NAMRB) disagrees with some of the provisions which make the budget procedure of local government bodies strongly dependent on the instructions of the Finance Minister and on the penalties for noncompliance.

The adoption of the Law on Public Finances will revoke the State Budget Law and the Law on Municipal Budgets.

In the summer, the NAMRB backed some proposals like the introduction of stricter fiscal rules and transparency requirements.

However, the NAMRB also highlighted weaknesses such as the strengthening of the centralization at the expense of local government bodies and the strong dependence of budget procedures on the Finance Minister.

The Association also opposed the shortening of the term for the preparation and submission of municipal budgets from 30 to 20 work days after the adoption of the state budget.

The new law will revoke the right of municipalities to prepare delegated budgets unless it is provided in a separate law.

The bill does not give a state guarantee for the transfer of state payments to municipalities by 5th of every month.

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