Bulgaria Parliament Adopts Rules on Procedure for Financial Recovery of Municipalities

Bulgarian National Assembly Building in Sofia

Bulgaria’s National Assembly passed at second reading amendments to the Public Finance Act, introducing rules on launching a procedure for financial recovery of municipalities in the form of interest-free credit granted from the state budget, FOCUS News Agency reported.

It is expected the amendments will introduce an order for launching a procedure for the financial recovery of municipalities and the implementation of a number of measures to achieve financial stability and stability of local finance. Conditions indicating the extent municipalities encounter financial difficulties to have been defined.

It is envisaged municipal councils will make a decision on launching a procedure for financial recovery, on tasking mayors with preparing a recovery plan, and holding a public discussion on the plan with the local community.

Under the new rules, municipal councils will be able to task mayors with asking the Ministry of Finance for financial aid for the municipalities in the form of a temporary interest-free credit from the state budget to implement the plan for financial recovery.

After the public discussion, municipal councils will make a decision to determine the deadline of the procedure for financial recovery from 1 to 3 years and will adopt the plan for it.

Municipalities faced with a risk of unsecured debts, which is for its part connected with an increase in the deficit under their budgets, will be able to launch a procedure for financial recovery.

Source: Focus Information Agency, May 25, 2016.