Publications :: Ministry of Finance of the Republic of Bulgaria http://www.minfin.bg/en/ Wed, 16 May 2012 23:01:16 +0300 en hourly 1 http://www.minfin.bg/en/pubs/1/6105 http://www.minfin.bg/en/pubs/1/6105 Wed, 16 May 2012 00:00:00 +0300 The European Commission presented the EU 2013 draft budget at the ECOFIN Council meeting held on 15 May 2012. The Commission plans to increase payments by 6.8% especially for the policies promoting competitiveness, growth and employment. Cohesion policy funds are planned to increase by 11.7% compared to the EU 2012 budget. Bulgaria took active part in the preparation of a statement on the need to increase cohesion policy payments within the EU 2013 annual budget. The statement has also been supported by Portugal, Poland, Hungary, Romania, Slovakia, Lithuania, Latvia, Estonia, Malta and Croatia. It highlights the importance of the cohesion policy for ensuring growth and jobs in the EU in the context of fiscal consolidation, as well as the need to increase budget payments for this policy in order to cover investment already made in the Member States under the EU Structural funds. Greece also joined the statement at the meeting itself. EU cohesion policy funds are the main source of growth and jobs within the Union's Growth Strategy.In its presentation during the meeting, Bulgaria supported not only the cohesion policy but the proposed increase in CAP funds. Our country identified administration costs and EU external action as the possible areas of cutting expenses.The Council should approve its opinion on the 2013 budget until July 2012, with the European Parliament expected to deliver its opinion on the budget at the end of October. Should the opinions of both budgetary bodies vary significantly, there will be a three-week compromise procedure. http://www.minfin.bg/en/pubs/1/6103 http://www.minfin.bg/en/pubs/1/6103 Tue, 15 May 2012 00:00:00 +0300 The package was discussed at today's ECOFIN meeting and political agreement was reached on the Council's common approach to the dossier. During the meeting Bulgaria made a proposal that had been consulted with and supported by all EU Member States. As per the adopted by ECOFIN Bulgarian proposal a possibility is provided by the end of 2017 the institutions to apply a zero risk weight when determining their capital requirements for positions in pair of currencies where exchange-rate data for the preceding three or five years are perfectly positively correlated and have a zero spread rate. The Ministry of Finance would like to remind that the CRD IV package introduces the international Basel 3 requirements and is a key element of the financial sector regulatory reform aiming at strengthening, reinforcing and stabilizing the EU financial sector. Bulgaria's position expressed many a time at the COREPER meetings and in the working groups, is against the package. The reason being that no account is taken of the need for specific treatment of banks and investment firms operating in Bulgaria in BGN-EUR exposures due to the functioning of the Currency Board Arrangement. Bulgaria carried out intensive negotiations and consultations with Member States and Denmark in its capacity of rotation president of the Council in order to solve the issue in our favor. "Taking into account Bulgaria's specific issue is an extraordinary success for us not only because of the fact that the specificities of our financial and economic system have been considered but it is also a kind of recognition of the financial stability maintained in Bulgaria in the last 15 years", Deputy Minister of Finance Boryana Pencheva who participated in the meeting said. This fact has made Bulgaria's support for the Council's common approach possible. The common approach to the CRD IV package agreed today allows the launching of negotiations between the Council, the EP and the EC to reach agreement on the dossier and to adopt it on first reading. The proposed in the initial CRD IV package draft risk treatment of closely correlated currencies (such as the BGN and the EUR) did not appropriately take account of the lack of any risk in respect of the denominated in EUR currency exposures of Bulgarian credit institutions and investment intermediaries. Such wording would guarantee that the currency risk treatment in the regulation would be consistent with the implemented in the past 14 years by the Bulgarian authorities policy regarding the stability of the Currency Board Arrangement and with the lack of risk in respect of the denominated in EUR currency exposures of Bulgarian banks and investment intermediaries. http://www.minfin.bg/en/pubs/1/6101 http://www.minfin.bg/en/pubs/1/6101 Tue, 15 May 2012 00:00:00 +0300  Almost BGN 242 million, or 68.4%, of the total budget of Operational Programme Administrative Capacity (OPAC) have been contracted so far. BGN 106.6 million, or 30.2 per cent, of these funds have been paid for already implemented project activities, with BGN 2.8 million having been paid to OPAC beneficiaries in the last two months. Just for April 2012 contracts amounting to BGN 14.6 million have been contracted. 18 new projects were launched in March and April, with the bulk of them being municipal projects. They envisage activities aimed at effective coordination and partnership in the elaboration and conducting of policies, as well as trans-national and interregional cooperation with other Member States. Among the most sizeable projects are those to an amount of almost BGN 12 million to be implemented by the National Institute of Justice and the Institute of Public Administration. Activities aimed at improving the professional qualification of magistrates and court officers through training courses on specialized topics of EU law and implementing good practices in the field of EU penal and procedural law are to be financed under OPAC. The training of civil servants is also planned in view of implementing the good practices of administrative activities and improving the services delivered to citizens and businesses. http://www.minfin.bg/en/pubs/1/6097 http://www.minfin.bg/en/pubs/1/6097 Tue, 15 May 2012 00:00:00 +0300 The demand for 5-year Bulgarian government securities exceeded by two times the quantity offered for sale by MoF at the auction held today. Participants placed offers amounting to BGN 110.05 million, with BGN 50 million offered by the issuer. The coverage ratio of the issue is 2.20, and this has been the highest value of the three auctions held for this issue since the beginning of 2012. The average annual weighted yield for the approved BGN 50 million is 3.83% and illustrates the lasting stability in the medium-term part of the debt curve of Bulgarian sovereign debt.The supply of bonds in this maturity segment meets the expectations of government debt market participants to the utmost degree. Investor base analysis shows the banks' leading position, which acquire 35% of the apprroved face value, followed by pension funds (32%) and insurance companies (10%).The clear trend of great interest at low central government cost of financing corresponds to the conclusions made in the European Commission's Economic Outlook (1/2012). Following these conclusions, Bulgaria'a rigid discipline has successfully contributed to improving the country's fiscal position owing to the timely measures aimed at structural deficit consolidation and implemented by the Government at the end of 2010 and throughout the previous year. Against the background of the on-going instability in the euro area owing to the political situation in several Member States and the deepening downward trend in some of the biggest debt markets in Europe, Bulgaria has strengthened its position of a key stability factor in the region. This position has been reflected in the independent evaluation of the participants in the auction held for the sale of medium-term government securities. Despite the concerns for any possible negative scenarios for the future of the single currency, the cost of Bulgarian government securities has remained a premium one, and extremely great interest has been registered. http://www.minfin.bg/en/pubs/1/6051 http://www.minfin.bg/en/pubs/1/6051 Wed, 02 May 2012 00:00:00 +0300 The country's budget stance in Q1 of 2012 has improved in comparison with the same period of 2011, with the CFP deficit on a cash basis being BGN 687.2 million in end-March 2012 against BGN 741.9 million in end-March 2011. The budget balance under the Consolidated Fiscal Programme (CFP) as of March 2012 is formed by a deficit under the national budget of BGN 430.4 million and a deficit under EU funds of BGN 256.8 million. The fiscal reserve as of 31 March 2012 amounts to BGN 4.5 billion.At end-March CFP revenues and grants stand at BGN 5,955.7 million or 20.7 % of the annual plans. Compared to the same period of 2011, CFP proceeds report a growth by BGN 426.2 million or 7.7 %, which is mostly due to higher VAT revenue (33.4 %). Compared to March 2011, tax revenues rise by 8.2 %, bringing BGN 374.6 million more for the budget. Non-tax revenues and grants also register a growth by BGN 51.6 million (5.4 %) against the same period of 2011.Tax proceeds, including revenues from social security contributions, total BGN 4,954.6 million as of end-March, which is 83.2 % of total CFP proceeds. Revenues from direct taxes are BGN 1,039.6 million, or 27.1 % of those planned for the year. Indirect taxes amount to BGN 2,442.4 million, or 21.5 % of CFP for the year. VAT revenues amount to BGN 1,554.8 million, or 21.9 % of those planned in the 2012 State Budget Law. Excise duty revenues as of end-March amount to BGN 853.3 million, with performance according to the estimates being 20.7 %. Customs duty revenues amount to BGN 27.9 million, or 23.2 % of those planned for the year. Proceeds from other taxes, including property taxes and other taxes under the Corporate Income Tax Law, amount to BGN 183.0 million, or 22.2 % performance of the plans for the year. Revenues from social security and health insurance contributions as of 31 March are BGN 1,289.6 million, or 23.2% of those planned for the year.Non-tax revenues and grants amount to BGN 1,001.1 million, or 14.0 % of those planned for the year. Expenditures under the consolidated budget, including the contribution of the Republic of Bulgaria to the EU budget, as of 31 March amount to BGN 6,642.9 million, or 22.3 % of the planned for the year. In structural terms, compared to March 2011 there is an increase in subsidies and capital expenditures mostly, which is due to the efforts to speed up the absorption of EU programmes and funds. The rise in expenditures for subsidies is due to the earlier payment of subsidies from the State Agriculture Fund to tobacco producers this year, while the rise in capital expenditure is mostly due to higher expenditures under EU operational programmes and funds. Non-interest current expenditures amount to BGN 5,488.2 million (24.4 % of those planned for the year), capital expenditures (including net increment of state reserve) amount to BGN 558.9 million (10.5 % of those planned), while interest payments amount to BGN 289.0 million (40.3 % of those planned in the 2012 budget). The part of Bulgaria's contribution to the EU budget, as paid in Q1 of 2012 from the central budget, amounts to BGN 306.8 million, which complies with Council Regulation 1150/2000. Data on consolidated budget implementation as of 31 March 2012 are published in the "Statistics" section on the website of the Ministry of Finance.