Prime Minister Reports BGN 8 M Surplus by Day 100

”If my father was still alive, he would have told me I’m a juggins to take over the state with such a minority and with this liability in the harshest financial crisis”, Prime Minister Boyko Borissov said at the traditional meeting between business and the government on the 100^th day of the new rule.

He pointed out that by October the state budget has come to the plus with BGN 8 million after the cabinet cut down state spending and increased revenues. The latter deserves admiration for sure, especially given the fact the government of Citizens for European Development of Bulgaria (CEDB) took over the country with a deficit of over BGN 560 million in June and melted it down to BGN 73.6 million in September. But how would the cabinet manage to make taxpayers fill the treasury while trying to survive in the crisis, and how will it stop contraband it still not quite clear even after its first 100 days in power, although it was namely at the meeting with business that the first results of the tax and customs administrations reforms were announced.

The budget surplus for October is mainly due to revenues increased by BGN 55 million and expenses cut by over BGN 25 million as compared to September, Minister of Finance Simeon Dyankov explained. This is also in result of more than 150 successful operations of mobile inspection groups held in the last month.

According to Deputy Prime Minister and Minister of Finance Dyankov, the balancing of the state budget is a clear signal to the business, the European Commission (EC), and the International Monetary Fund (IMF) that Bulgaria is following the safest fiscal policy in the entire EU. This is especially important for the currency board stability and Bulgaria’s quick entering the euro zone.

Prime Minister Borissov reconfirmed the government would not touch the fiscal reserve.

The idea for portions of the reserve to be deposited with commercial banks for reaching higher profitability was championed by Deputy Prime Minister Dyankov, but it provoked negative comments, fears over the currency board’s stability, and suspicions it would serve close to the premier circles. Borissov, though, determined as brazen former finance minister Plamen Oresharski’s questioning in the Parliament on the reserve issue. ”Oresharski is asking Dyankov on this hoping Dyankov would have to keep silent because the decision was made at a secret session”, Borissov emphasized. But denied commenting if any commercial bank has taken advantage of the secret agreement for transferring BGN 1 billion from the state fiscal reserve to banks, concluded by the former finance minister and the Bulgarian National Bank (BNB). The central bank announced officially the agreement was preventive because of the risks of the crisis and it did not have to enter into effect. Head of BNB Ivan Iskrov told journalists the prime minister has asked this question not to be commented on.

”Banks have no problems and are working well, do not worry people”, Ivan Iskrov said. He was firm he would not enter any political debates and whatever he has to talk with PM Bouko Borissov, he would tell it in private, not through the media.

On his side,

after emphasizing strongly the state cannot intervene at the bank market, PM Borissov explained before the business he had held informal talks with commercial banks top officers and asked them to reduce interest rates.

All this for just another time is supposed to strengthen with the public the feeling that the last say on all issues in the country belongs to Boyko Borissov and everything happens in result of his will and authority. But banks are anyway lowering interests on credits since the summer in result of markets dynamics and financial resource price reduction. The secret agreement for transferring portions of the fiscal reserve was secret namely because the system’s stability depends on the confidence in it, and the latter is super sensitive to comments, what to say about scandals in the Parliament.

And while emphasizing that his ministers were smarter than him and that’s why they were appointed – to perform their jobs, the PM is quick to speak before them on all matters. As the example with the BGN 132 million he did not know he owed for ”the snow of yester year”. In this case the word probably comes to the due but unpaid duties of Road Infrastructure Agency to construction companies for completed repair and construction works, as for the previous year the budget portion for winter cleaning was calculated at BGN 32 million. Quite symbolically, on the day of the symbolic report of the government before the business the first snow fell. It immediately became clear this year BGN 7 million is allotted for it and despite the wish of the regional development minister the tenders to go transparently and in the relevant legal due times, the cabinet will reach for the reserve option with ”small” public orders. So far the practice of crisis distribution of orders in order of eluding the Law on Public Orders was one of the most often criticized by CEDB wrongdoings. The previous management of the agency, though, has not started the tenders required on time, so willing or not, the new regional development minister will have to work ”crisis-like”.

As probably his most important success as premier, Boyko Borissov points out the

release of the EU funds for Sofia’s underway, Sofia’s overhead roads, and Sofia’s consumer waster treatment plant.

As well as the agreed upon with Brussels ”preliminary” financing two lots of the Trakia Highway under the Transport Operational Program, so that construction works on the remaining lots of the road between Sofia and Bourgas could continue in February. The prime minister said he expected of the business not the lay-off more personnel than necessary. ”I have been in private business and I know that despite the state, business survives, the question is to what extent it obeys the rules. As we have drafted new legislation, there is no loopholes to pass through”, the prime minister explained.

According to Deputy Prime Minister and Minister of Finance Sumeon Dyankov one of the big issues for the government will be not to up taxes in the times of crisis. He announced, though, that the finance ministry was prone to accept the idea of the Bulgarian Industrial Association (BIA) for creating a golden register for VAT. The proposal is this book to include all correct to the state companies so that they could benefit advantages  for VAT reimbursement in shortened terms, about a week for example. So far the proposal of Leader of the Union of Democratic Forces (UDF) Martin Dimitrov  about shortening the terms for VAT reimbursement from 30 to 10 days is not covered in the draft-bill for amendments to the Law on VAT, but CEDB promised to consider a possible acceleration of the procedures, as was one of their most vocal pre-election promises.