Another vote of no confidence has been submitted by “Vazrazhdane”, this time due to the government's failure in the area of fiscal policy.
The cabinet, supported by the current ruling coalition, is deepening fiscal imbalances and is not taking the necessary urgent measures to restore the sustainability of the public finances of the Republic of Bulgaria.
The budget of this government pursues incorrectly set goals, based on false statistical data, overly optimistic macroeconomic forecasts, unrealistic expectations for tax revenue collection. And most importantly: there is no public support for the cabinet's intentions to cede a key part of Bulgaria's sovereignty by destroying the 145-year-old Bulgarian lev, by abolishing the currency board, by reducing the BNB to a subsidiary of the ECB.
Officially, our government claims to be pursuing a policy of “sustainable and transparent public finances“, but this is just an empty slogan, emptied of real content. It is impossible to talk about the sustainability of public finances when the government has set a target for the debt to increase in the next four years from BGN 41 billion in 2024 to BGN 88.9 billion in 2028. The country's debt will not only double in the coming years in absolute terms, it is also increasing as a share of GDP from 23.5% (practically the lowest in the EU) to 36% of GDP.
Given that theoretically the optimal deficit level for the country is 1% of GDP, as set in the medium term and in the ZPF, the government's claims to pursue a sustainable fiscal policy sound absurd given the deficits it has set for this and next year of 3%, or three times more than what can be considered "sustainable"! The cabinet's budget policy permanently relies on structural deficits in all years until 2028.
The increase in interest payments for debt service is extremely worrying. They increase from 1.009 billion leva in 2024 by over 500 million leva per year to reach 3.324 billion at the end of the government's mandate. This is a jump of over 330%!
As a result of the “sustainable“ policy of the “Zhelyazkov“ cabinet, in 2028 Bulgaria will pay interest of 9,106,849 leva every day. This is not “sustainable“, this is irresponsible!
The Ministry of Finance refused to listen to the BNB's recommendations to plan a budget buffer, in case of non-fulfillment of the set revenues or other unforeseen events, by increasing the minimum size of the fiscal reserve from 4.5 billion leva to the amount necessary to cover the state's expenses for at least two months, that is, to about 16 billion leva.
Instead, the government is willingly spending the money from the reserve for current needs and reducing it close to the minimum. At the beginning of March this year, for example, there were only 1.5 billion leva in the reserve above the silver fund, which would have been enough in less than a week. For the first time in 21 years, the government refuses to publish more up-to-date data on time, which is indicative of the poor state of the country. This is probably an attempt to deceive their European partners and the citizens of Bulgaria that our country meets the criteria for membership in the eurozone.
“Vazrazhdane” are categorical that despite the above, the government does not stop spending.