Cause and Effect in European Politics and Law

Less revenues in the Treasury of Bulgaria

Adelina Marini, March 9, 2010

The bad news for less revenues in the Treasury of Bulgaria continue to pop up. According to Industry Watch, the fiscal reserve of the country by the end of January has dropped by 300 mn levs (153 mn euro), compared to December 2009 and by 1.5 bn levs (769 mn euro), compared to January last year. Currently the liquidity of the government is less than 7.4 bn levs (3.79 bn euro). This is 11.1% of GDP for January 2010, while in January 2009 it was 13.3%, the data of Industry Watch show.

The Ministry of finance announced, meanwhile, that the import has dropped by 15% in January and February, compared to the same period of last year. This, according to the Ministry's information, has influenced the revenues from excises, VAT from import and customs duties. The revenues of the Customs Agency for the first two months of this year were 913 mn levs (468 mn euro), accumulated from VAT from import and customs duties. Compared to January of 2009, the revenues have dropped 12.7% or by 133 mn levs (68 mn euro).

Industry Watch also note an increase of the net public debt (without the reserves) - from 680 mn levs to 2.2 bn levs. (348 mn euro to 1.1 bn euro). This is a significant increase in terms of a share of the economy - from 1% to 3.3% for one year, the economists from Industry Watch commented.

Economists and analysts have warned many times of a possible deterioration of Bulgaria's financial situation. On Friday, the liberal party NDSV warned again by proposing several urgent measures as well. In the meantime, the Bulgarian Sega daily wrote that on Sunday there was a secret working session of the government where participants discussed a plan for fast exit of the crisis, called "Renaissance".

The plan includes quick payment of the debt of the state towards firms, reduction of social securities (which was one of the promises of the ruling party GERB before the elections), quick privatisation, aimed at filling the Treasury.