Bulgarian Parliament postpones vote on 8BN euro borrowing as talks continue

Bulgarian Parliament postpones vote on 8BN euro borrowing as talks continue

Sofia, February 19, 2015/ Independent Balkan News Agency

By Clive Leviev-Sawyer of The Sofia Globe

Bulgaria’s unicameral Parliament, the National Assembly, voted on February 19 to postpone until next week debate and voting on the government’s proposed eight billion euro foreign borrowing, as the coalition cabinet struggled to secure sufficient support for it to pass.

The proposal to postpone voting came from Valeri Simeonov, co-leader of the nationalist Patriotic Front, which supports the government but which signalled the previous day that it could not support the proposed borrowing.

The National Assembly is being asked to ratify agreements signed on February 6 that create a global medium-term note (GMTN) programme for bond issues in the international markets worth eup to ight billion euro. The total volume for each year will be limited by the amount of government debt specified in that year’s Budget Act.

The maximum maturity of the bonds is up to 30 years, and the maximum interest rate is up to 10 per cent.

On February 18, when it became clear that the centre-right coalition cabinet headed by GERB leader Boiko Borissov did not have enough votes to get the borrowing approved, Borissov told a cabinet meeting he was prepared to resign if the vote failed.

The February 19 vote to postpone debate and voting was approved by 115 votes in favour, 59 against and with two abstentions. It was supported by the parliamentary groups of GERB, its cabinet minority partners the Reformist Bloc, the Patriotic Front, Bulgarian Democratic Centre and the other minority party supporting the cabinet, socialists ABC – which also have said that they oppose the borrowing.

Georgi Kadiev of the Bulgarian Socialist Party, which vehemently opposes the foreign borrowing, called for further debate, telling the House that currently there was “buying and selling of entire parliamentary groups”.

“You do not need a whole week to be bought,” Kadiev said, adding that even unborn children would be burdened with the payment of the debt.

“If they are threatening elections, then it is better to go to elections,” he said.

MPs from ultra-nationalists Ataka, which also opposes the borrowing, had put up posters outside the plenary hall calling on MPs not to enter and thus to deny Parliament a quorum.

While the government has indicated that the borrowing over the next three years is intended to enable the country’s administration to cope with deficits, Ataka – which takes a pro-Kremlin line on the Ukraine conflict – alleges that Bulgaria’s government wants the money to go to war against Russia. Ataka’s posters said, “No to the military loan, do not become the golden finger of the colonial regime”.

When the outcome of the vote to postpone was announced, BSP and Ataka MPs began chanting “resignation” – an echo of the 2013/14 chants against the government in which the BSP held the mandate. Speaker Tsetska Tsacheva told them if they wanted to resign, they should put it in writing and give the letters to the parliamentary administration.

The Patriotic Front hinted earlier that they could turn around on their opposition to the borrowing, saying that the reasons had not been adequately explained by the government.

The Finance Minister, Vladislav Goranov, said on February 18 that the borrowing could come in at a lower sum, six billion euro instead of eight billion, if the deficit could be reduced. Deficit reduction, however, could come only with better revenue collection, he said.