Meeting here on Friday, the Political Council of the three-party ruling coalition decided to strengthen the buffers in the 2009 national budget while keeping the principal macroeconomic parameters of the bills the way they have been adopted by Parliament on first reading, the Government Information Service said.

Leaders Sergei Stanishev of the Bulgarian Socialist Party, Simeon Saxe-Coburg-Gotha of the National Movement for Surge and Stability and Ahmed Dogan of the Movement for Rights and Freedoms and the three parties' political leadership decided that the duration of payment of the cash benefit for pregnancy and child-care at the rate of 90 per cent of the mothers' wage will be increased from nine months to one year, provided that the beneficiaries have been socially insured on this income for at least one year before the confinement, up from six months at present.

To maintain the sustainability of macroeconomic positions, consolidated budget expenditures (excluding the contribution to the EU general budget) will not exceed 40 per cent of GDP, and a consolidated fiscal programme surplus will be kept within 3 per cent of GDP with a possibility to reduce that level depending on the development of the economic situation and on budget revenue performance.

Maintaining a budget surplus and substantial fiscal reserves makes it possible to react in case of a downturn in economic development, considering the global economic imbalances and the heightened external risks related to the financial volatility of international markets. A number of mechanisms intended to counter the financial and economic crisis are envisaged in the 2009 budget, grouped into three areas: economic activity, market flexibility, and flexibility of the social safety nets. The idea is to boost the economy, to maintain investment activity, and to cushion the possible impacts of the crisis on the enterprise sector.

As another budget buffer, ministries will be allowed to use up to 90 per cent of their allocation, down from 93 per cent so far.

Public capital expenditures are planned to increase next year by a substantial 21 per cent from 2008 to nearly 5,600 million leva. Of the additional 400 million leva investment package included in the draft budget, 211 million leva will go for national farm subsidies, 94.5 million leva will be spent on modernization of the railway infrastructure, and the balance of 94.5 million leva will go for socially relevant projects.

The health insurance contribution rate will be increased from 6 per cent to 8 per cent in 2009. As from January 1, 2009, the State will step in as a sharer in the social insurance contribution to the Pensions Fund by 12 per cent, with the rest of the contribution being paid by employers (10 per cent) and employees (8 per cent).

Unemployment benefits will be increased. A percentage of the benefit will be paid for the children in the family of the unemployed person, depending on their number, provided that they attend school, according to the press release.

Source: BTA