The National Assembly adopted at first reading the amendments to the Public Finance Act, submitted by the Council of Ministers. The bill received 117 votes “for”, 55 “against” and none “abstained”. The MPs rejected two alternative bills submitted by Bozhidar Bozhanov and a group of MPs from Democratic Bulgaria.
With the adopted provisions, Bulgarian legislation is brought into line with the European Union’s new economic governance framework. The main restrictions under the Stability and Growth Pact remain in place: the general government deficit must be up to 3% of gross domestic product, while public debt must be up to 60% of GDP.
New spending indicator
The amendments introduce monitoring of the growth of net primary expenditure against the plan for Bulgaria approved by the Council of the EU. The indicator will be used in determining fiscal policy and when assessing the need for budget adjustments in the short and medium term.
Two new documents are envisaged – a National Medium-Term Fiscal-Structural Plan and an Annual Progress Report. They will replace the existing National Reform Programme and Convergence Programme. The bill also clarifies the rules for public debt management, the content of budget documents and the deadlines for their preparation.
New rules for investment and debt
For the first time, the requirement is explicitly laid down that public investments financed with national funds must be included in the budget following a prior assessment and prioritisation. It also provides for the possibility, if the budget is not adopted on time, for the state to refinance principal and interest payments on its debt not only on domestic but also on international markets.
During the debate, Martin Dimitrov of Democratic Bulgaria warned: “For us, the removal of the national corrective mechanisms is a serious mistake; we cannot rely solely on the European ones.” He said this created a risk that high deficits would not be automatically corrected.
Konstantin Prodanov of Progressive Bulgaria defended the amendment and pointed out that the country was moving from one mechanism to another. According to him, the old approach based on the structural deficit had not prevented a deficit of 4% in 2025, while the new model was more suitable for implementation.
Temenuzhka Petkova of GERB described as worrying the possibility that a caretaker or interim government could take on new debt if the State Budget Act had not been adopted. She also expressed reservations about the way public investments would be approved, as well as about removing extraordinary circumstances as grounds for a deficit exceeding 3%.
Ayten Sabri of the Movement for Rights and Freedoms said that Parliament should have calculations for upcoming payments, available funds and the shortfall necessitating the assumption of debt. The bill is yet to be considered at second reading.
Sources: news.bg, bta.bg