Bulgaria strives to fund EU projects

Bulgaria strives to fund EU projects

VARNA (Reuters) - Bulgaria plans to spend 1.7 billion levs ($1.12 billion) to finance EU-backed projects next year and is looking to cut spending elsewhere to ensure financial stability, its prime minister said yesterday.
Sergei Stanishev said the main hurdles to the budget for 2007, when Bulgaria hopes to join the EU, are linked to its obligation to pay 650 million levs as a contribution to the EU budget and ensure 100 percent of the financing of EU-backed projects.
“We have earmarked a resource of 1.7 billion levs to utilize EU pre-accession and accession funds. There is no way this will not limit spending on other sector policies,” Stanishev told a news conference after a government meeting.
Stanishev said he expected the first year of accession to be the hardest, because the government has to provide the funds for the EU-backed projects, which Brussels will later reimburse.
After accession Bulgaria will have access to around 11 billion euros through 2013, of which 1.2 billion are earmarked for the first year of membership.
The poor Balkan country is looking into ways to cut other spending as it has pledged to produce a fiscal surplus of 0.8 percent of gross domestic product (GDP) next year to counter risks arising from its hefty current account deficit seen at 12.4 percent of GDP this year.
The Socialist-led government said it will decide over the next month in which sectors budget spending will be restricted.
Bulgaria plans to use the EU funds to improve its shabby infrastructure, build new roads and waste treatment plants as well as spend more on education and healthcare to increase the quality of its work force and living standards.