Bulgaria's Prime Minister Sergei Stanishev said on November 19 that the Cabinet was likely to amend the draft Budget for 2009 before the bill is put for voting on second reading in Parliament. Lawmakers passed the bill on first reading on November 19.

"No reasonable suggestion must be rejected," Stanishev was quoted as saying by Dnevnik daily, without giving additional details. Stanishev did reject out of hand, however, the suggestions made by the right-wing opposition parties, the Union of Democratic Forces (UDF) and Democrats for a Strong Bulgaria (DSB), to cut taxes and social security contributions.

"The surplus remains an important anchor for the stability of the country the currency board and the exchange rate of the Bulgarian lev," he said. Stanishev's Socialist party, the senior partner in the three-way ruling coalition, and the Movement for Rights and Freedoms, one of the two junior partners in the coalition, are both against tax cuts.

DSB leader and former prime minister Ivan Kostov, however, argued that the governing coalition was ignoring the conventional wisdom that tax cuts in times of crisis can cushion the worst effects of an economic downturn and stimulate growth. "Households and firms will have to curtail their spending, only the Government will spend lavishly," Kostov said, as quoted by Dnevnik.

He also rubbished Stanishev's link between a budget surplus and the currency board, saying that the two issues were not related since the currency board, under which the amount of local currency in circulation must not exceed the central bank's currency reserves, was the preserve of the Bulgarian National Bank, who had more than enough hard currency in store and would not need Government injections.

Kostov's calls were echoed by economists and UDF's Martin Dimitrov, the latter accusing the Cabinet of refusing to curb its spending because it wanted to curry favour with voters at next year's Parliament elections. Lower taxes would not only increase the disposable income of households, but would also ensure that there is less taxpayers money that could end up in companies with close ties to the ruling coalition.

Bulgaria's draft Budget emphasises more spending on infrastructure, social sector, education and healthcare, which the opposition has criticised as pouring more cash into unreformed sectors. Finance Minister Plamen Oresharski countered saying that the Cabinet could not "tell teachers and doctors, pensioners and welfare recipients to wait for their wages and payments while we are dealing with the fallout from the crisis".

Although neither Oresharski, nor Stanishev, gave more details on how the Budget bill could be amended, Dnevnik quoted Finance Ministry sources as saying off the record that agriculture and healthcare were the two sectors most likely to see their budget allocations increase, but that the changes would not be significant.