Bulgaria's Bond Sales Plan Causes No Concern - EU Budget Commissioner Georgieva

EU Commissioner for Budget and Human Resources Kristalina Georgieva gives a speech during a swearing-in ceremony in front of the EU Court of Justice in Luxembourg, Luxembourg, 10 December 2014. EPA/BGNES

The European Commission isn’t concerned by Bulgaria’s decision to issue up to BGN 16 B (EUR 8 B) in new debt, Commission Vice-President for Budget and Human Resources said on Sunday.

Bulgaria’s debt-to-GDP ratio is about 27% which indicates the debt level is low, BGNES news outlet quoted Georgieva as saying.

At that ratio Bulgaria is one of the least indebted countries in the EU-28.

Last month Bulgaria's parliament approved a government plan to raise EUR 8 B of new debt through overseas bond sales over three years to roll over old debt and finance budget deficit. The minority coalition cabinet led by Prime Minister Boyko Borisov aims to raise EUR 3.5 B in 2015 under the plan. Moody's provisionally rated the bond issue programme as Baa2, which is a medium grade investment rating, with moderate credit risk.

According to Georgieva, it’s highly important for what purposes the government will use the portion of proceeds from bond sales that will not be used to pay maturing debt.

Those fresh funds should be channeled into Bulgaria’s economy to boost growth which is still slow, Georgieva opined.

Bulgaria’s GDP increased by 1.7% in real terms last year.  

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