The National Assembly unanimously approved, at first reading, a decision to extend the deadline for collecting revenue, and making payments and transfers from the state budget until a budget for 2023 is adopted. The definitive decision on the state budget is expected to be made next week. This means social payments will be guaranteed. The state budget for this year will be adopted by the end of July, the new Minister of Finance Assen Vassilev promised.

• Parliament approves extension of state budget at first reading

How this is going to happen in a parliament so polarized, where decisions are so difficult to reach, is something we are yet to find out.

“I very much hope that the needs, the problems public finances are facing and the decisions that will have to be made so the country can start functioning along normal lines will have a disciplining effect and encourage decision-making, the most important decision in the financial sphere being the budget,” says Assoc. Prof. Elena Stavrova from the Faculty of Economics and Business of the Southwestern University, and adds:

“The country is not going to have financial problems because the economy is settling down, there is an upward trend. It has always had a reserve, and there is always the possibility of issuing government bonds, as the public debt is currently way under the maximum 60% under the Maastricht criteria. We do not need to go to foreign capital markets to take out more loans. Our financial system is literally filled to the brim with resources if we take a look at the savings of the public and of companies.”

Yet, for businesses the fact a new government has been voted in after a lapse of more than two years does not resolve the political crisis by a long shot. They are expecting to see urgent decisions made that will halt the constant changes to the laws affecting their work, restrict administrative pressure and, most importantly – they want to see the members of parliament adopt a current budget.

“This country needs to have an approved budget… We are not relying on the money from the EU, but anything coming from it will be welcome. It would be a shame if Bulgaria was unable to absorb the money from the EU. I am not looking out for just my business, but for the country as well,” Philippe Rombaut, CEO and owner of a fertilizer plant in Devnya in Northeastern Bulgaria says in an interview with Dnevnik.

The fact there is no e-government is another major hurdle in the smooth and predictable functioning of businesses. This deprives people and business of the option of obtaining services faster without having to come in contact with the administration. But is also leaves the door wide open for corruption practices.

When there is political crisis, bureaucratic pressure becomes rife. And not just corruption, but also a different, subjective, excessively broad interpretation of the laws and regulations. At times like this, government officials feel they are “given a free hand to do what they like with businesses”, says Shteryo Nozharov, economic advisor at the Bulgarian Industrial Association.

The employers’ Union for Private Economic Enterprise issued a position calling for the urgent adoption of the budget and guarantees for the security of SMEs – small and medium-sized businesses form the backbone of the country, as they account for 75% of the jobs, 65% of the added value and 50% of the export. The Union is also calling for a substantial relaxing of the procedure for giving workers from third countries access to the labour market in Bulgaria in a bid to tackle the problem of labour shortages.

A budget with a 3% deficit, as promised by Finance Minister Assen Vassilev, is more likely impossible, comments Vanya Grigorova, economic advisor at Podkrepa Labour Confederation.

“Just imagine a half-empty pool, in which we say we are not going to pour any more water, i.e. we are not going to raise the taxes of the rich and of the companies with excess profits, but we will pay out more, so as to catch up with the accumulated inflation. That is obviously impossible.”

“A 3% deficit is a political, not an expert target,” says financier Lyubomir Datsov in an interview with the BNR, and goes on to comment on the decision to extend last year’s state budget:

“This kind of extension of the budget does not guarantee the payment of all expenditures. When it makes payments, the Finance Ministry is going to have to prioritize them in view of their urgency and importance,” says Lyubomir Datsov, and adds he hopes to see a regular budget approved in the next three weeks.

We Continue the Change/Democratic Bulgaria’s MP Martin Dimitrov does not agree entirely with this prognosis, and says he would rather trust the experts from the Fiscal Council, whose task it is to monitor and analyse the budgetary framework:

“Considering how the economic situation is developing at the moment, the expectations are of a deficit of around 7 billion Leva (EUR 3,58 bn.), which is 3.7% of the GDP y-oy for this year on a cash basis, with expected capital expenditure of 6.5 billion (EUR 3.33 bn.). If efforts are made and there is preparatory work, the deficit can be brought down to under 3%. The risks are connected with the National Assembly and the proposals for additional expenditure that will be made there. It is important to have people with a sufficient sense of financial responsibility so there will be no surprises.”

Interviews by Horizont channel and Radio Blagoevgrad

Compiled by Yoan Kolev

Translated from the Bulgarian and posted by Milena Daynova