Sat, May 26 2012

Bulgaria dithering on fiscal reserve spending to clear debts

Fri, Dec 18 2009 15:57 CET

byThe Sofia Echo staff

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Bulgaria dithering on fiscal reserve spending to clear debts

Finance Minister Simeon Dyankov

Photo: Georgi Kozhuharov

Bulgaria could use funds from the fiscal reserve, which stands at about eight billion leva, to pay some of its debts to the private sector, Dnevnik daily said on December 18.

"[Finance] Minister [Simeon] Dyankov said it was the most realistic means for the Cabinet to pay some of the funds it owed companies," the executive director of the Bulgarian Construction Chamber, Ivan Boikov, was quoted as saying.

Dyankov and Regional Development Minister Rossen Plevneliev met with representatives of the construction industry on December 16.

"When and how the payments would be made will become clear on December 23, when an official document between businesses and Government will be signed," the head of the road-building construction chamber, Roumen Yovchev, was quoted as saying.

Dyankov, however, has been reluctant to spend funds from the fiscal reserve thus far, which could be interpreted as a sign of weakening macroeconomic fundamentals and result in Bulgaria being seen abroad as increasingly risky.

Different estimates put the amount owed by Bulgarian Government to private businesses at between one billion and 1.5 billion leva.

The Finance Ministry is contemplating raising funds through bond issues and more foreign loans, but neither option was as quick and easy as using fiscal reserve money, Dnevnik said.

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Comments

Anonymous Ilian Sat, Dec 19 2009 21:01 CET
Report Comment

Why issue bonds and go into more debt when we have the savings to cover the debts that need repaying?

This is what the fiscal reserve is for, rainy days and hard times. The situation now fits into those aforementioned categories so use the fiscal reserve!


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