Sofia, July 29 (BTA) - The picture of public finances in May was
 a cause of concern, to put it mildly, caretaker Prime Minister
Stefan Yanev said Thursday during a parliamentary hearing on the
 financial and economic shape of Bulgaria. He said that his
government, however, has been able to preserve financial
stability and improve tax compliance.

He said that much of the buffers for restructuring of the budget
 were used up in the first four months of the year: for the
60/40 job retention scheme (a total of 117 million leva), for
the 50 leva pension bonus in April (105 million leva), other
employment measures (120 million leva), 61 million leva for
municipalities and 22 million leva for the Bulgarian National
Television and the Bulgarian News Agency (BTA).

The caretaker government found systemic tax non-compliance and
lacking control on businesses, which had resulted in large
deficits across the public financial systems.

In 2020 alone, the previous government paid 15.8 billion leva to
 private companies and 3.4 billion of those went to seven
companies. In January-April 2021, three companies received 1.3
billion leva of tax-payers' money, siad Yanev.

Huge resources were spent for in-house contracts. Between
January 2019 and the end of April 2021, in-house orders totalled
 8.6 billion leva. The biggest spender was the Road Construction
 Agency with signed deals for 2.4 billion leva with 55 private
companies and another 3.1 billion with the state-owned road
construction company Avtomagistrali even though it lacked the
capacity to do the work and had to hire subcontractors in
intransparent procedures.
  
Avtomagistrali signed up subcontractors for projects worth 5.5
billion leva bypassing the public procurement procedures.

The Road Infrastructure Agency signed contracts for road repair
and maintenance worth 1.6 billion leva in 2021 while its annual
budget was 382 million leva for 2021, and made commitments for
spending of 1.3 billion leva in 2022. Any finding above the
company budget was secured through government decrees. "This
practice was widely used in the past two years," said Yanev
adding that more than 60 alerts for wrongful spending have been
submitted to the prosecution service.

"During its short time in office, the caretaker government
managed to preserve financial stability and improve tax
compliance, so that Parliament now can make a decision for
restructure the budget and increase social spending," the Prime
Minister said.
   
Over 1 billion leva in additional revenues is now expected from
the National Revenue Agency and some 500 million leva from the
Customs Agency, and the budget revision bill that the government
 will submit to the legislature shortly can provide for an
additional expenditure of 1.8 billion leva for a pensions
update, for a supplement to pensions with incomes below the
poverty line and for costs that may have to be made in a
possible new COVID wave in the autumn, said the Prime Minister.

He was asked by There Is Such a People, the largest group in
Parliament, which parties they discussed the budget revision
bill with and if that was the reason to have a budget that
allows for 2-in-1 elections - presidential and new parliamentary
 elections -  in the autumn. Yanev said that while the proposed
budget revision allows for all election scenarios, whether there
 will be two elections this autumn is not a matter of a decision
 to make through the budget.

He also said that the budget revision was discussed with the
unions and employers, and with "a number of political parties",
and urged teh legislators not to put the budget in a political
context or seek conspiracies. NV/LN/