Raising the ceiling on the new debt by up to 3.8 billion euros through changes to the so-called. The Council of Ministers approved the extension budget law at its meeting today, the government press service announced.
The government approved a draft law amending and supplementing the Law on the Collection of Revenues and the Execution of Expenditures in 2026 until the adoption of the Law on the State Budget of the Republic of Bulgaria for 2026, which provides for the possibility for the Council of Ministers to assume new state debt in the amount of up to 3.8 billion euros (3 percent of the estimated GDP).
During yesterday's meeting of the temporary committee on budget and finance, its chairman Konstantin Prodanov withdrew an amendment submitted between the first and second readings of the bill amending the extension budget, which provided for an increase in the ceiling of the new debt by 3.8 billion euros. This move came after criticism from the opposition that such an amendment cannot be submitted by a member of parliament under the conditions of an extension budget, BTA recalls. Prodanov stated that in order to comply with the legal order, this proposal will be submitted by the Council of Ministers.
The government points out that raising the debt ceiling is in connection with the need to provide resources for pre-financing payments for the implementation of national activities/investments in the final stage of the implementation of projects under the National Recovery and Resilience Plan and given the sharp unexpected change in the geopolitical situation and the rising prices of energy carriers, which has a negative impact on the liquidity position of the budget and further aggravates its expenses.
The amendment to the law provides for the possibility for the Council of Ministers to issue new debt on international capital markets through the medium-term program for issuing debt on international markets, as well as short-term government debt, which is repaid by the end of the current budget year.
The amendment to the law is necessary because, according to the Public Finance Act, in the conditions of extended budget The Council of Ministers may assume new state debt only for the purpose of refinancing existing obligations up to the amount of annual repayments on the debt already assumed. The amount of the state debt maturing in 2026 is 1.41 billion euros, and new debt of this amount has already been assumed since the beginning of the year, through the issuance of government securities on the domestic market, which in practice means that the government cannot incur new debt until the adoption of a regular budget for this year.
Deputy Prime Minister and Minister of Finance Galab Donev indicated today at a briefing at the Council of Ministers in Sofia that without these 3.8 billion euros, the country will have a problem with the payment of pensions, salaries, social payments in July this year, as well as a problem with payments under the National Recovery and Sustainability Plan. In his words, this is a debt that is inevitable.