Bulgaria’s caretaker Cabinet approves 2021 Budget revision bills

Bulgaria’s caretaker Cabinet approves 2021 Budget revision bills

Bulgaria’s caretaker government has approved a draft revision of the 2021 Budget, but its prospects of passing in a divided National Assembly focused on electing a new Cabinet appeared uncertain.

Caretaker Prime Minister Stefan Yanev said on July 29 that the Budget revision was a sign of “responsible behaviour towards the state’s finances. I hope Parliament will hold the necessary reasonable debate, show wisdom and understanding towards the situation in this moment, so that all urgent payments at the start of September are assured.”

The proposal was approved at a special sitting of the caretaker Cabinet on July 29, but while the government media statement gave the main details, the three bills that make up the Budget revision were not published in full. The bills were not posted on the Parliament website as of the afternoon of July 30.

Earlier, the Finance Ministry published a draft of the a bill amending the 2021 Budget Act, but not the bills amending the social security and healthcare funds’ budgets, which are separate from the state budget.

In that bill, Budget revenues were raised by 1.33 billion leva, or about 680.7 million euro, to 28.4 billion leva by projecting higher tax income.

Total Budget spending would increase by 1.46 billion leva to 34 billion leva, the bulk of that being a 1.16 billion leva new budget item for compensatory measures in relation to the Covid-19 pandemic in the “reserve for unforeseen and/or urgent spending” section of the 2021 Budget Act.

That main recipients of that funding were wage-support schemes (400 million leva), the Labour Ministry (222.4 million leva) and the Health Ministry (200 million leva). Additionally, under the same spending item, 133 million leva were recorded for expenses on elections.

The target Budget deficit would rise by 141.3 million leva to 5.63 billion leva, or 4.4 per cent of projected gross domestic product.

The caretaker Cabinet said that the changes to the social security budget included an adjustment in the formula for calculating pensions starting October 1, which would increase pensions by an average of 64 leva.

The minimum pension would rise from 300 to 340 leva and the maximum pension from 1440 to 1500 leva, while the average pension would be about 550 leva.

The caretaker Cabinet opted for an even increase of all pensions by adjusting the formula, but rival proposals have been put forth by two groups in the National Assembly, which focused on increasing only the older pensions, leaving more recent retirees with no change to their pensions.

Both groups – the socialists and the coalition led by former Ombudsman Maya Manolova – were in talks to possibly support a minority Cabinet nominated by cable television presenter Slavi Trifonov’s party ITN and reportedly made pension hikes a condition of such support.

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