Decision No. 2 of 8 April 2025 on Constitutional Case No. 13/2024
Referring Authority and Subject Matter of the Case
The case was initiated upon a request by the Council of Ministers for the establishment of unconstitutionality of the Decision on taking measures in connection with the existence of liquidity problems and the inability of the “Electricity System Security Fund” to fulfill its statutory obligations, adopted by the National Assembly on 21 March 2024, according to which, in view of liquidity problems and the inability of the “Electricity System Security Fund” to fulfill its statutory obligations under the Energy Act, measures are to be undertaken to ensure the financial stabilization of the “Electricity System Security Fund” and, accordingly, of the electricity system, with the Minister of Finance being tasked to undertake the necessary actions to cover the operational deficit of BGN 1 billion in the “Electricity System Security Fund” by 31 March 2024. It is provided that the “Electricity System Security Fund” shall expend the received funds to cover the costs under Article 36b, paragraph 1, items 1 and 2 of the Energy Act for the pricing period from 1 July 2023 to 30 June 2024, pursuant to Decision № Z-14 of 30 June 2023 of the Energy and Water Regulatory Commission. The request for establishment of unconstitutionality is substantiated by the petitioner with claims of violations of the principle of the rule of law, the principle of separation of powers, the competence vested in the National Assembly under Article 84, item 2 of the Constitution to adopt the state budget, and the competences vested in the Council of Ministers under Article 105, paragraph 1 and Article 106 of the Constitution to direct and implement the internal and external policy of the country in accordance with the Constitution and the laws, and to oversee the execution of the state budget.
Summary of the Court’s Reasoning
It is constitutionally impermissible for the National Assembly, by its decision, to provide liquidity support to the “Electricity System Security Fund” by assigning the Minister of Finance to allocate funds from the state budget, since, pursuant to Article 106, first sentence of the Constitution, the exclusive competence of the Council of Ministers is to direct the execution of the state budget. In accordance with the constitutional principle of separation of powers, the Council of Ministers exercises executive authority and independently forms its decisions on the basis of the Constitution and the laws. In the event of a discrepancy between the executive assessment of the Council of Ministers and the will of the National Assembly, the legislature may exercise constitutionally established means of parliamentary control. The National Assembly may not, by its decision, interfere with the full exercise of the management functions constitutionally assigned to the Council of Ministers, and in particular with operational management functions (see Decision No. 10/2021 on Constitutional Case No. 8/2021 in this regard).
Under the decision contested in the present case, the National Assembly assigns the Minister of Finance to carry out an activity that falls within the executive-dispositive powers of the Council of Ministers in the budgetary sphere (Article 106, first sentence of the Constitution).
The competence of the Council of Ministers to direct the execution of the state budget constitutes managerial activity in connection with the implementation of the state budget adopted by law for the respective year and may not exceed what is provided both in the annual budget law and in the Public Finance Act. The legal form of the budget constitutes the legal basis for the executive authority to collect revenues and incur expenditures within the limits established by the budget law, while also allowing constitutional control over its content.
In the present case, the applicable budget legislation does not contain provisions that could serve as a legal basis for the adoption of the contested parliamentary act. According to the established practice of the Constitutional Court, the existence of primary legislation that clearly delineates the limits of competence of the executive authorities ensures that executive-dispositive activity does not degenerate into arbitrariness (Decision No. 4/2019 on Constitutional Case No. 15/2018). The prohibition of arbitrariness constitutes an essential substantive legal component of the rule of law (Decision No. 1/2005 on Constitutional Case No. 8/2004).
Instead of having the parameters of the budget amended on the proposal of the Council of Ministers and subsequently voted on and adopted by the National Assembly, the legislative authority circumvents the constitutionally prescribed procedure, which, on an independent basis, constitutes a violation of the principle of the rule of law.
Grounds for the Ruling and Disposition
Pursuant to Article 149, paragraph 1, item 2 of the Constitution (empowering the Constitutional Court to rule on requests for the establishment of the unconstitutionality of laws and other acts of the National Assembly), the Constitutional Court declares unconstitutional the Decision on taking measures in connection with the existence of liquidity problems and the inability of the “Electricity System Security Fund” to perform its statutory obligations, adopted by the National Assembly on 21 March 2024.
The decision is signed with a dissenting opinion by one judge.
Председател: Павлина Панова