SOFIA, Dec. 12 (Xinhua) -- Bulgarian National Assembly on Friday approved the taking of a loan of 1.5 billion euros (some 1.86 billion U.S. dollars) to cover current needs of the state budget.
Bulgaria has signed the loan agreement with HSBC Bank, Societe Generale, Citibank, and Unicredit Bulbank as authorized leading organizers, and Unicredit Bank in the role of agent.
The loan, backed by the four parties of the ruling majority that came to power in November, will be used to provide funding for the state budget and ensure liquidity support, the government said.
The term of the loan is six months with a possible extension for another six months. It is envisaged to be repaid with revenues from the issue of government securities for the external markets in 2015.
During the debate in parliament, Rumen Gechev, a member of the Parliamentary Group of Leftist Bulgaria, said that the country is entering into a debt spiral.
This loan would not be used to stimulate the Bulgarian economy, and this is a key problem of the debt policy, he added.
According to a draft law approved by the country's cabinet on Dec. 1, the government debt would rise by 8.1 billion BGN (some 5.17 billion U.S. dollars) in 2015 to reach 24.5 billion BGN. The debt-to-GDP ratio is expected to reach 29.7 percent.
