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Public money from low taxes to pay for rearmament and emergency medical services

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On Wednesday the government endorsed the mid-term budget outlook until 2019 that investors, international and local observers and average Bulgarians had been looking forward to. It was expected to reveal the priorities of the government in spending public money. This is important for both those who rely on funds from the national revenue, and those who need to synchronize their business plans with the intentions of the governments. All the more so that we are talking about roughly 17 billion euro per annum.

Moderation, stability and zero pleasant or unpleasant surprises – this is in short the analysis of the main parameters in the government’s forecast. Taxes won’t either go up or down; wages won’t either be cut or increased and no major new investment projects are in the offing. Nothing dramatic is in store. Still, a few novel highlights are worth discussing.

The government has identified defense and security as top priorities. For the time being the main obligation of central government remained sort of veiled, and no one shifted a finger to make practical measures for modernizing the outdated equipment of the Bulgarian army. True, the military have all the time complained and NATO has been pressing governments to carry out rearmament, but the political class chose to turn a blind eye to these concerns regardless of an unnerving international situation. Now this is no longer the case and the government of PM Boyko Borissov has decided to take steps for improving and modernizing the defense capacity of the country. Funds will be spent for new fighters, new armored vehicles for the land forces and new ships for the Navy.

Another novelty has to do with more attention and funds for emergency medical services. After the first steps of a strongly contested healthcare reform have shaken trust in the whole system it has turned out that emergency medical care is in need of the most urgent financial injection, plus it goes without saying, the state pension fund given the prospects of a rapidly ageing population. This time though, money won’t come from the budget but as a result of raising pension security contributions. For the time being, raising pensions is not planned or if so the rise is fairly insignificant. The same is true of the minimal monthly salary which has remained frozen for three years.

One of the fundamental priorities of the government is the country’s financial stability based on a restrictive budgetary policy. This is aptly reflected in the new three-year budget framework with its key objective – cutting the budget deficit to as little as 0.5% by 2019.

English Daniela Konstantinova




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