Bulgaria's new prime minister, Boiko Borisov, has banned entertainment allowances at the council of ministers and told employees to pay for their guests' coffee as part of cost-cutting measures.

Dinners and lunches for visiting delegations will be the only exception, the government's press office said.

It said the government's office had been spending 7,000 levs (USD5,372) a month on flowers and refreshments, which will now be saved as the Balkan country struggles to avoid a budget deficit.

"We will set a personal example," media quoted Borisov as saying.

"My understanding is that when you have a guest, you go and pay yourself just like I pay for my own coffee. If one is very dear to me, I will treat them, if not, I will not treat them."

The order to cut entertainment allowances is likely to be extended to all ministries and regional governors' offices and is expected to save 1 million levs (USD769,200) a year, government spokesman Nikolai Boev said.

The European Union's poorest nation has been hard hit by the global crisis which put an end to 12 years of economic growth.

Borisov's centre-right government won a parliamentary election in July on a promise to crack down on rampant corruption and fight the recession.

It has already cut public spending by 15% to avoid an end-year deficit that could put pressure on Bulgaria's lev currency peg to the euro.

The government, which expects the economy to contract by 2% next year after shrinking by 6.3% in 2009, has pencilled in a budget deficit of 0.7% of GDP next year but will aim for a zero gap in a bid to speed up eurozone entry and avoid a prolonged recession.

Reuters, Balkans.com Business News