The fiscal reserve of the country fulfills the role of set aside for “black days” money in the account of the government. Our team is checking how the funds are distributed in it and whether there are grounds for concern that the state may go bankrupt. This was recalled by novini.bg.
There is nearly BGN 6.7 billion in the fiscal reserve, but we are deducting BGN 4 billion from it in the State Fund for Guaranteeing the Sustainability of the State Pension System, or the so-called “Silver Fund”. Thus, in practice, the official government remains with about BGN 2.7 billion free reserve.
How long will it take the available 2.7 billion?
Our country has money for the next 10 days, this is shown by the calculation of experts for the remaining free reserve of BGN 2.7 billion.
„This is not a very good strategy for managing public finances – having money for 10 days ahead and wondering how to pay yourself this or that. Yes, someone will now say “now the income from taxes will come”. Yes, but in addition to the income, pension expenses will come, then other income, other expenses will come. This is like saying “Yes, I have money for 10 days, but then I will get a salary”. Yes, but after that you will spend it again and you will still have money for 10 days”, Nikola Yankov, former Deputy Minister of Economy and Transport, explains to BTV.
But despite the low level of the fiscal reserve, the so-called scenario “the state goes bankrupt“ could not come true.
“The state will not go bankrupt, as Bulgaria has a large credit, it can always withdraw money as a bond loan. This can happen within ten days or two weeks, it happens relatively quickly. There is no danger that it will stop making payments, but the fact that it does not have current liquidity is a non-standard management of the state treasure”, adds Yankov.
It also became clear that with BGN 1.6 billion of the missing BGN 3 billion, the state bought the debt of the capital's heating plant.
„Keeping in mind that this is all our total money. These are the taxes of the people from Yambol, Stara Zagora, Pleven, Targovishte, Blagoevgrad, who have nothing to do with heating in Sofia, somehow this does not look good. But this is a continuation of the policy of subsidizing the capital's heating system with taxpayers' money, the expert also says.
The financier reminds that higher government spending also leads to higher inflation, and when it is much higher than the countries in the eurozone, this will be an obstacle to adopting the euro.
Receivables from the funds of the European Union are about to enter the fiscal reserve. The assessment of these receivables is BGN 2 billion, including a second payment under the Recovery and Sustainability Plan in the amount of about BGN 1.4 billion.
However, we have not yet received this amount from Brussels, because we still have unfulfilled conditions.