The European Commission revised its spring forecast about the growth of the Bulgarian economy in 2016. The economic experts from Brussels expect that the economy of that country would rise by 2% this year, which is far from Premier Borissov’s expectation of accelerated growth up to 4.5%. The forecasted growth, however, is not enough for Bulgaria, which tries to reach the average economic levels in the EU, Bulgaria’s economist Professor Boyan Durankev told Radio Bulgaria and added:

“According to the classical economic theory, an economic growth is meager, if it fluctuates between 1% and 3% on an annual basis. If it varies from 3% to 6%, it can be defined as moderate and a growth of 6% or above is regarded as strong. In other words, according to that theory, Bulgaria places amidst the countries with meager economic growth. Secondly, the average global economic growth is expected to reach 3.1% in 2016. Therefore, Bulgaria would place in the group of countries with insufficient growth this year. Our country has long ago dropped from the ranking of world countries with strong economic development in terms of gross domestic product per capita. Bulgaria is now far from the EU average in terms of the GDP per capita ratio and since most experts forecast that the EU economy would grow with an average of 1.8% this year, Bulgaria’s economy has to mark a minimum annual increase of 6% to 7%, in order to reach the EU average in the foreseeable future.”

According to Professor Durankev, many EU member states outran Bulgaria in terms of economic growth. Ireland registered a 4.9% growth in 2015. The economy of Bulgaria’s northern neighbor Romania increased with 4.2% and the gap between those two countries widened. Malta, Poland, Sweden, Lithuania and Latvia registered economic growth similar to the one marked in Bulgaria last year-around 3%. The only country with negative GDP growth was Greece (-0.3%), Professor Durankev said and added:

“In terms of the gross domestic product per capita ratio, however, Greece outruns Bulgaria significantly and if the economy of that country continues to collapse, it would take Bulgaria at least two decades to reach Greece’s indicators. The weak economic growth poses a series of risks to Bulgaria and its future. If I have to diagnose the current government of the EU, I would say that Brussels is unable to shorten the economic gap between the poor member states and the highly developed countries through its Juncker Investment Plan.”

According to Professor Durankev, the lack of economic and social justice in Bulgaria is to become more visible, because that country’s annual contribution to the EU is paid with the money of all Bulgarian taxpayers, but the reverse capital flow to Bulgaria is directed to only 0.5% to 1% of the population.

“Inequality in Bulgaria will grow and the risks to its future will multiply. May the EU continue using the Juncker Plan, but meanwhile adopt another plan aimed at helping all countries, whose economic growth amounts to one-third of the average EU growth or under shorten the gap with the highly-developed states. Moreover, Bulgaria must adopt a new economic model. The country’s economy must be based on more investments in own state assets. Unfortunately, Bulgaria has been counting on foreign capital too much in the past twenty years or so.”

In Professor Durankev’s view, there will be more direct investments in Bulgaria, if that country abandons the flat-rate taxation and create the necessary conditions where all citizens would have a given amount of money at disposal and invest that sum into the local economy. Moreover, those households which earn less than EUR 250 per capita must be exempt from any taxation whatsoever. Secondly, the authorities can increase the taxes levied on luxury items, heritage, ground and house rents, in order to collect more money to the state treasury, Boyan Durankev said. Professor Durankev contends that Bulgaria should adopt a differentiated taxation both on the physical persons and the companies. Besides, the EU must introduce a common minimum salary and a common unconditional basic income, which would at least allow people to satisfy their basic needs.

In Professor Durankev’s words, Europe should not run on different gears and Bulgaria and the other poor member states must insist on the adoption of the so-called Second Marshall Plan, which would allow them to speed up their economic development and shorten the gap between them and the older EU member states.

“If the minimum monthly salary reaches EUR 300 in two years and EUR 400 in three to four years for example, many Bulgarian citizens who are planning to emigrate would change their minds and stay in Bulgaria. Of course, those with a university degree must receive at least EUR 600 a month. Our estimates show that if the minimum wages reach EUR 600 most Bulgarians would prefer to live and work in their home country, although their life would be easier in countries such as Germany or Sweden.”

English version: Kostadin Atanasov