Cause and Effect in European Politics and Law

Reason during a crisis

Adelina Marini, November 24, 2008

Times of crises are the best moments to measure the maturity of societies. The financial crisis is indisputably a time of test for politicians and business. Indeed the balance between the two is what in fact gives good results. A wonderful example in this regard is Spain, often compared to Bulgaria because of the starting point when joining the EU more than 20 years ago and because of the economic, social and political condition. I wouldn't dare claim that Spain's current condition is the result of more than 20 years of EU membership but the fact is that this year Spain registered a budgetary surplus of 2.2% of GDP.

In comparison, Bulgarian budgetary surplus is a little over 3% of GDP which equals something like 30 bn euro. The more interesting part though is what the Spanish government intends to do with its surplus? Madrid took the opportunity and decided to spend this money by cutting taxes and boosting public expenses At this state this is the best approach during a crisis because on the one hand this could stimulate business and consumption and on the other hand, allows increase of salaries in the public sphere. Of course, only countries with budgetary surpluses can afford such measures. In the case of Ireland, for example, there's a serious budgetary deficit.

Exactly such differences among the 27 member states of the EU could become a serious obstacle before the realisation of the Recovery Plan of the EU. It will be presented on Wednesday, November 26th. According to the "Financial times", which has a draft copy of the document, the main idea behind the plan is with one bullet two rabbits to be shot: governments to approve a package of 130 bn euro for economic stimulus and, on the other hand, some funds for regional development to be relocated for the weaker economies in the Union. These funds amount to 347 bn euro for the financial period 2007-2013. A plus in the Plan, which might appear as minus later is that part of the money, planned for spending in 2011, 2012 and 2013, should be made available earlier - in 2009 and 2010. Why this could be a minus? If we again use Bulgaria for an example, we know that spending here is almost always non-transparent, inefficient and in this regard totally useless. It is also not clear, let's hope we will find that out on Wednesday, if the weaker member states from Central and Eastern Europe will participate in the 130 bn euro package.

If we return to the example of Spain of how it spends its budgetary surplus, it will not be very hard to realise that Bulgaria will find it extremely difficult not only to participate in the Plan but also to take advantage of it. If you have followed the discussions in the National Assembly over the budget for this year, then you know that it was planned in a very conditional mood with regard to the anti-crisis measures. Many experts believe that the peak of the crisis for Bulgaria will be in the Spring. That is why it would be great when you consider how to vote on next year's Parliamentary elections to remember this detail which has serious long term consequences. Actually, you shouldn't put this into question because if we take into account our election system, in all cases you should vote even if it is for a marginal little party because otherwise your vote will be distributed among the political sharks.