Bulgaria's Parliament to Decide on New External Debt Proposal

Finance Minister Vladislav Goranov maintains the new debt is needed to deliver on payments of previous loans and to finance this year's budget deficit. Photo by BGNES

Protests organized by the Bulgarian opposition are expected as lawmakers are beginning their session of a government proposal to take on fresh foreign borrowing worth BGN 16 M, or EUR 8 B.

The National Assembly also has to ratify the agreement with four banks (Citigroup, HSBC, Societe Generale and UniCredit) selected last week to manage the country's medium-term debt program. Last week a vote on the issue led to a brawl among MPs who discussed the move at a Budget Committee session.

Some EUR 3.5 B are to be raised this year to repay a EUR 1.5 B loan due to reach maturity this year and to finance its 2015 budget deficit.

Government officials have repeatedly stressed the need for Bulgaria to draw new loans and have urged calm, saying the amount of new debt should not spark any panic.

The socialist opposition, on the other hand, has described the debt proposal as "a scandal".

The cabinet's move comes just days after HSBC came in the spotlight amid a billions-worth tax evasion affair.

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