If the budget deficit and government debt are not curbed, the country faces a financial disaster. This was stated by Deputy Prime Minister and Finance Minister Galab Donev on the Bulgarian National Television program “Panorama.”
“If we do not stop the galloping deficits, if we do not stop the debt the state has to take on in order to cover this deficit and pay off old liabilities, disaster is inevitably certain,” Donev said.
According to him, the government began working to curb the deficit as early as May. The goal is to reduce it by nearly €4 billion by next year.
Deficit of 3.5% on a Cash Basis
The parameters in the draft budget envisage a budget deficit of 3.5% on a cash basis and 4.2% on an accrual basis. If the derogation for military spending is removed, the accrual-based figure would reach 3.6%.
Donev described reducing the deficit as difficult to achieve within a short period, but said that the government was ready to consolidate public spending.
“We have made sufficient efforts from May until next year to reduce the deficit by nearly €4 billion,” the finance minister said.The measures target not only revenues but also spending, including structures that the government believes are not operating effectively.
Administration to Be Cut by Nearly 5,000 People
One of the key measures is administrative reform, which envisages reducing the size of the state administration by nearly 5,000 people. This will be achieved by merging units, eliminating overlapping functions, phasing out outdated activities and digitalization.
“Not staff cuts at any cost,” Donev clarified. According to him, the changes should also lead to better services for businesses and citizens.
No Funds Will Be Redirected from the Second Pension Pillar
The finance minister rejected claims that the government plans to redirect funds from the second pension pillar to the State Public Insurance system.
He said that talks with pension insurance companies had concluded with an idea to create an investment fund through which their capital could participate in financing state infrastructure projects.
Possible areas include the construction of motorways, railway and energy infrastructure. Donev emphasized that this involved pooling private and public capital, not transferring funds to the State Public Insurance system.
Asked about a letter presented by the opposition and related to redirecting funds from the second pension pillar, the minister said he could not identify its origin.