Government Debt

The efforts in the recent years aimed at achieving progress in the fiscal area have set as priority the effective management of the government debt. The favourable development of the main macroeconomic indicators and the pursued prudent fiscal policy on the one hand, and the outlined long-term objectives in the economic processes area, related to Bulgaria's membership in the European Union on the other hand are the factors that have the largest contribution to the strengthening of the key lines and priorities of the policy on government debt management pursued by the Ministry of Finance.

Taking into consideration the best practices in the area of debt management the MoF debt policy is implemented in compliance with the existing legislation in the country, in particular the Government Debt Law, the Public Finance Law, the State Budget of the Republic of Bulgaria Law for the relevant year, the Government Debt Management Strategy in force for the respective three-year period and other laws and by-laws.  The organizational and functional structure of MoF built in connection therewith is aimed at ensuring the following more important lines and areas of activity:

  • providing for the overall process of laying down and implementing the policy of assuming and managing of government debt, including proposing measures for government debt management  and implementing the Government's issue policy;
  • participation in the process of development of the medium-term budget forecast and the State Budget Act for the relevant year in the context of planning and implementing of the indicators concerning debt funding and government debt service costs;
  • development of a three-year government debt management strategy;
  • exercising control over the amount, dynamics and service of all financial liabilities assumed on behalf and at the expense of the state, which represent government and government guaranteed debt;
  • development and implementation of the issue policy, exercising control over transactions in GS, selection of primary dealers in GS, and carrying out activities aimed at developing an effective, transparent and liquid domestic market of government debt;
  • providing the required preconditions for effective functioning of the domestic debt market as well as supporting the institutional development of financial markets in the country as a whole having in mind the challenges and the utmost priority of that area preconditioned by the need of smooth integration of the local capital market into the European one;
  •  preparation and release of the official information about the  state and dynamics of the government and government guaranteed debt;
  • preparation and submission of statistical data on the debt of the general government sector and its sub-sectors, including release of the official information on consolidated debt and guarantees of the general government sector;
  • support in and coordination of the implementation of national policies in the area of financial markets and financial services by participation in working formats to the EU institutions to discuss any new legislation in this field, preparation of opinions and positions, refinement of Bulgarian legislation and its alignment with EU law;
  • ensuring the contractual relations with credit rating agencies in connection with the country's credit ratings;
  • ensuring the activities related to the implementation of Regulation (EU) No 236/2012 as regards the government securities and the credit default swaps on government securities, including by means of keeping a register of short positions, making on-the-spot checks, collecting and forwarding regular information to the European Securities and Markets Authority and the Financial Supervision Commission, preparing and coordinating the publication of mandatory guidelines, if necessary, etc.

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