Bulgarian Parliament Endorses Spending 46 Mln Euro from Budget Surplus for Building Key Motorway - Media

Parliament approved the spending of a total of 1.206 billion levs from the projected surplus to finance a package of social and public investment initiatives, including 90 million levs for upgrading and expanding road infrastructure, 30 million levs for investments in railway infrastructure, and a pension hike, anong others, BTA said.

The Socialist-led cabinet in Sofia has pledged to accelerate the construction of the Trakia motorway, designed to link the country's western border with the Black Sea port city of Burgas, after a Portuguese-led consortium failed to secure financing for the project earlier in 2008. In May Bulgaria cancelled the deal with the consortium and called a tender for the construction of 34 kilometres of the motorway.

Bulgaria's government has reported a 61.1% annual rise in its consolidated budget surplus to 4.631 billion levs in the first eight months of this year, equivalent to some 6.5% of the projected GDP, thanks to improved tax collection and spending cuts.

End-year budget surplus may climb to six billion levs, well above the fiscal surplus target set at 3.0% of GDP in the budget bill, analysts say.

The country operates under an IMF-prescribed currency board system, which bans the central bank from lending to the government and makes its fiscal policy the only tool to influence the economy.

The tripartite government, which faces elections next year, sought parliament approval to spend 666 million levs from the surplus to help the most needy. Most of the money will go for Christmas pension bonuses and a pension hike as of October 1.

The army will get 20 million levs from the surplus to modernise its hardware and a further 40 million levs will go to the police force and the fire department.

The cabinet has maintained a significant budget surplus ever since taking office in 2005.

The government coalition comprises the Bulgarian Socialist Party, the centrist NDSV party led by former king Simeon Saxe-Coburg Gotha and the predominantly ethnic Turk MRF party.

(1 euro = 1.95583 Bulgarian levs)