EC to launch infringement procedure against Bulgaria over Budget deficit - report
The European Commission will launch an infringement procedure against Bulgaria for allowing its Budget deficit to exceed the three per cent of gross domestic product (GDP) threshold mandated by the Maastricht criteria, Bulgarian daily Dnevnik said on April 23 2010."It is already clear that Bulgaria's deficit for 2009 is more than three per cent, therefore the procedure is invoked automatically," Amadeu Altafaj, spokesperson for European commissioner for monetary and economic affairs Olli Rehn, told Dnevnik.The latest data from European Union's statistics body Eurostat, on April 22, put Bulgaria's Budget deficit at 3.9 per cent of GDP.However, Bulgaria could avoid the infringement procedure if it can show that the excessive Budget deficit was temporary and could be reined in, the daily said, citing an unnamed source at the European Commission's directorate-general for monetary and economic affairs.Eurostat data on April 22 showed that 18 countries, two-thirds of the 27-nation bloc, had higher deficit than Bulgaria in 2010. Four countries - Ireland (14.3 per cent), Greece (13.6 per cent), the UK (11.5 per cent) and Spain (11.2 per cent) - reported two-digit deficits.Budget deficit in the EU was 6.8 per cent and 6.3 per cent in the 16-member euro zone. Only Estonia and Malta reported improvements in their deficits and only five - Denmark, Estonia, Finland, Luxembourg and Sweden - were below the three per cent deficit threshold.The EC will next inform the Ecofin council of finance ministers, which has to suggest corrective measures and give a timetable for Bulgaria to reduce its deficit below three per cent of GDP, Dnevnik said.Bulgaria increased its Budget deficit to 3.7 per cent of GDP for 2009, from the earlier 1.9 per cent, blaming it on annexes to contracts signed by the outgoing coalition government of socialist prime minister Sergey Stanishev before being ousted at the July 2009 general elections.This year, the Cabinet targets a Budget deficit of 1.9 per cent, but analysts have said that Bulgaria would struggle to meet the target as revenues continued to shrink because of the economic recession, with little prospect for recovery this year, and little room to further cut spending.