New capitalization of state-owned enterprises is a danger like with Zhan Videnov.
This is what Lidiya Shuleva, former Minister of Labor and Social Policy, former Minister of Economy and Deputy Prime Minister of Bulgaria in the government of Simeon Saxe-Coburg-Gotha (2001 - 2005), told the Bulgarian National Radio regarding the proposed Budget 2025.
"What is planned in the budget to be financed with the so-called debt ceiling is related to something very dangerous - to capitalize the BDB (Bulgarian Development Bank) and through it to capitalize state-owned companies for highways, dams and other such things. If you recall the policy of the socialist governments - before and during Zhan Videnov - then state-owned enterprises were capitalized, and this led to the indebtedness of state-owned enterprises and the need for the state to assume the debt of these state-owned enterprises. If we look at what these enterprises have done over the years - now a new capitalization raises the fear that some money may again go into oblivion, but without any result. ... When we take on debts that go towards something that no work has been done, the concerns are justified", she specified and recalled that capitalizations of state-owned companies went to Corpbank and all the money was lost.
Lidiya Shuleva determined the budget for 2025 as quite comfortable for the government, since it is very tight in terms of revenues, has a lot of reserves in terms of expenses, and on the third side provides comfort with the large debt ceiling:
"I think that the necessary balance will be found to achieve a deficit of no more than 3%, so that Bulgaria can join the eurozone".
The ratio between debt and GDP (gross domestic product) is very important, she emphasized and explained:
"It is important because GDP guarantees the repayment of this debt in terms of interest. When you have a large debt relative to GDP, i.e. it exceeds it, then the interest paid on the debt is so high that it already threatens the payment and the danger of the state going bankrupt increases. As long as the GDP is large enough to be able to pay the interest on the debt, there is no such danger. If we look at the absolute figures of Budget 2025, we will see that the optimal need for debt to finance budget expenditures is about 12 billion leva. That is why I said that this budget is very comfortable, because a debt ceiling is adopted, which is very large. But the way in which this additional resource is used raises some concern.