Government Debt Management
The efforts in the recent years aimed at achieving progress in the fiscal area have set as priority the effective management of the government debt. The favourable development of the main macroeconomic indicators and the pursued prudent fiscal policy on the one hand, and the outlined long-term objectives in the economic processes area, related to Bulgaria’s accession to the European Union on the other hand are the factors that have the largest contribution to the strengthening of the key lines and priorities of the policy on government debt management pursued by the Ministry of Finance.
Taking into consideration the best practices in the area of debt management the MoF debt policy is implemented in compliance with the existing legislation in the country, in particular the Government Debt Law, the State Budget of the Republic of Bulgaria Law for the relevant year, the Government Debt Management Strategy in force for the respective three-year period and other laws and by-laws. The organizational and functional structure of MoF built in connection therewith is aimed at ensuring the following more important lines and areas of activity:
- Exercising control over the amount, dynamics and service of all financial liabilities assumed on behalf and at the expense of the state, which represent a liability of the state and cover the domestic and the external government debt;
- Development and implementation of the government debt management policy whose fundamental essence is targeted at ensuring unobstructed financing of the budget and refinancing of the debt at minimum possible cost in the medium and long term and optimum level of risk;
- Development and implementation of the issue policy, exercising control over transactions in GS, issuing permits for investment intermediation in GS transactions, and carrying out activities aimed at developing an effective, transparent and liquid domestic market of government debt;
- Monitoring the service of all financial liabilities for which guarantee has been issued on behalf and at the expense of the state as well as ensuring the official information about the consolidated government debt which includes government debt, municipal debt and social security funds’ debt;
- Providing the required preconditions for effective functioning of the domestic debt market as well as supporting the institutional development of financial markets in the country as a whole having in mind the challenges and the utmost priority of that area preconditioned by the need of smooth integration of the local capital market into the European one;
- Identifying and monitoring the possible risks that may arise during the implementation of the strategic goals set;
- Undertaking adequate and timely actions to minimize and/ or avoid the impact of the risks identified as well as their potential negative effects.
