Bulgarian MPs Pass 2014 State Budget Update

Lawmakers have approved at a first reading the government's proposal to overhaul this year's state budget.

A strong majority of 123 MPs helped the ruling axis to pass the legislation, with 42 lawmakers against and 41 choosing to abstain.

Socialist BSP and ultra-nationalist Ataka declared themselves vehemently against the bill, with the formerly ruling party claiming the 2014 fiscal framework does not need to include such levels of deficit and debt.

The opposition warned Bulgaria risked entering into an excessive deficit procedure since the new budget envisages that the deficit should surpass three percent of GDP, the maximum amount allowed under EU rules.

Amendments to the state budget act include issuing new state debt of up to BGN 4.5 B, with BGN 3 B of them secured on the international market.

About BGN 2.9 B of this sum will be earmarked for the Deposit Insurance Fund which has to help reimburse customers' savings at Corporate Commercial Bank (KTB), Bulgaria's fourth-largest lender which had its license taken away by the Bulgarian National Bank (BNB).

A number of institutions, including ministries, are now set to receive additional funding. The one to get the biggest allocation is the Ministry of Interior, with BGN 125.7 M more set aside.

The Ministry of Labor and Social Policy will get BGN 50 M more, while another BGN 24.2 M will go to the Health Ministry (this does not include the grants to the health insurance fund reported earlier).

Bulgaria's Agriculture Ministry will have BGN 16.4 M in addition, while the Regional Development Ministry will be able to count on an equal increase.

The Supreme Judicial Council will get BGN 10 M, and half as much will be given to the Justice Ministry.

The bill will have to be put to another vote in Parliament later in November.

Earlier lawmakers moved to boost healthcare expenditure by BGN 100 M, allowing a second update of the National Health Insurance Fund (NZOK) for this year.

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