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ACTS Post opinions with a wide range of perspectives to encourage constructive discussion.
Something is wrong with Bulgaria’s fiscal reserve.
Inflating the fiscal reserve with loans is misleading and shortsighted. The issuance of new debt and its inclusion in the reserve leads to its artificial increase. For this reason, it is correct not to keep these amounts in the reserve, because the structure of the reserve gives clarity on how much it really is.
In practice, in the last 3 years Bulgaria has been issuing new debt and directing a large part of its foreign currency to the reserve, which has grown almost by the size of the debt itself. Due to the drastic decrease in investment at the moment, it turns out that the real fiscal reserve can be replenished with loans, and the other source until the end of 2020 remains the offsetting of payments to European Union funds.
It would be good not to include loans and accounts receivable from European Union funds in the reserve, as these amounts should not be included in the reserve and a different approach should be taken. Let both the future accounts receivable from the European Union and the amounts received from the issuance of new debt be deducted for the assessment of the fiscal reserve. Because the fiscal reserve must be filled mainly with income from privatizations, concessions and budget surpluses, and not with EU funds and new loans.
Rumen Galabinov
Sofia, Bulgaria
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