Bulgarian caretaker government scraps 2023 budget plan – EURACTIV.com

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Bulgaria’s caretaker government will not present a draft 2023 budget to parliament, Finance Minister Rositsa Velkova said on Tuesday (October 25th), potentially leaving her successor with the stark choice of either breaking EU fiscal rules or drastically cutting spending. expenses.

Addressing lawmakers, Velkova said the caretaker government would propose extending the 2022 budget into the new year until a regular government can be appointed.

It is a change of position from the Ministry of Finance, which on Thursday unveiled a draft 2023 budget with a budget deficit of 6.6% of economic output and new debt of around 16 billion levs (8 billion euros). euros) and said he would submit it to parliament.

“A new government could work on our baseline scenario for a budget with a budget deficit of 6.6% and decide how to change it based on their priorities,” Velkova said.

Bulgaria, rocked by political instability, faces long and difficult talks to form a government after general elections on October 2, the fourth in less than two years, which resulted in a deadlocked parliament. A new early election cannot be ruled out.

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The interim cabinet will not present a draft budget to parliament that would seriously violate European Union fiscal stability rules and threaten Bulgaria’s plans to join the eurozone, Velkova said.

Nor will he propose a project under the EU’s deficit threshold of 3% of economic output, as this would require major spending cuts.

The high deficit target for 2023 is the result of steep increases in state pensions and cuts in value added taxes on bread and heating earlier this year, while economic growth is expected to slow to 1, 6% in 2023 against 2.9% in 2022, according to the Ministry of Finance.

Bulgaria’s small open economy is expected to end 2022 with a budget deficit of 3.4% of GDP.

Kiril Petkov’s reformist “We Continue the Change” party, whose government drafted the 2022 budget, challenged the caretaker government’s estimates for 2023 and argued that the 2023 budget could have a lower deficit without cutting social spending.

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