Cause and Effect in European Politics and Law

Some Considerations about Bulgaria's 2012 Budget - from the blogs

Ralitsa Kovacheva, November 24, 2011

"Next year's budget of Bulgaria is the same as this year's – small deficit, high spending for pensions and zero creativity." This is how euinside has described next year's budget in one sentence. As one of the most serious risks to the budget euinside highlighted the political will to resist pressure from various parties for more budget expenditure and carrying out necessary reforms. In a similar vein are most of the comments we have collected from various blogs in order to follow the civil discussion on the topic, under the project "Horizon 2020: Civic Vision for Reform and Development of Bulgaria in the European Union", funded by the Open Society Institute - Bulgaria. It aims to provoke a more active public debate on strategic Bulgarian goals for development and Bulgaria's commitments as a member of the European Union.

"We can hardly expect any imagination exactly from this government. My impression is that the Bulgarian national business culture - be it in private enterprise, or in the public budget - could be described in one phrase "play it safe". This means that the slow decline, that would end with a catastrophe (but beyond our mandate), is preferable to the risks of reforms and growth. In this sense - nothing new is learnt, nothing old is forgotten," Konstantin Pavlov- Komitata wrote in a comment on this website. According to him "in order to have truly reformist elites and reformist government spectacular upheavals must occur, threatening to erase the state from the world map. Well, it is also needed a sufficient number of voters to be available, motivated to do so. Did anyone seriously expect Djankov [Bulgaria's finance minister] or the political force behind him to restructure the budget, exposing himself to the attacks of protesting citizens, even in the name of the brightest of goals? It is ridiculous to expect such things."

A similar opinion was expressed by Dobrin Stanev, who wrote in his blog: "I say the budget is conservative not because of the little money. The big conservatism of the budget is not due to maintaining the current levels of public spending, but to maintaining the current levels of unreformness of the public sphere. I mean conservative in terms of keeping the current general policy of our economy and politics.

The problems the country is facing are great and now is the time for reforms. The Government has received a new tranche of voters' trust, after winning the presidential and local elections. Now we need to make major reforms, to fight corruption and institutional inefficiency. One of the buffers or potential items in the budget is to improve the absorption of EU funds. It cannot be improved if the abuses continue, on the one hand and on the other - the application procedures are so cumbersome that they dissuade applicants. The EU, in turn, insists the funds to be spent under control and verification.

Secondly, the public administration must be digitised. Reform is also needed in the pension system. The pension system, as currently conceived, is virtually bankrupt. Half of its funds does not come from the contributions of workers but from the state budget. Possible solutions are to increase the retirement age or shifting from the system "pay as you go" to a mainly fund-type scheme, where everyone saves for their own retirement.

The judiciary must improve its accountability and responsibility through the introduction of mutual control. The judicial system is shady, nominative and unaccountable, and such places are inherently good environment for corruption.

The great difficulty is that the word reform is discredited in our public. On the one hand people want things to be different, but do not want to walk the path of change, which is painful. If you do not want the means, you should give up the goal. There is no reform that doesn`t hurt and doesn`t include losses. Borissov [Bulgarian Prime Minister Boyko Borissov] knows this as a populist and therefore he is running away from any chance of reform. The question is whether we are willing to endure losses now, in order to rescue ourselves from the catastrophe of a Greek scenario tomorrow?"

Jordan Mateev, in turn expressed his support, as "a citizen and a blogger", for Finance Minister Simeon Djankov, because he "stands behind reforms, which are very useful for the society." Examples of such useful reforms, according to Jordan Mateev, are the closure of the State Reserve, reforming the Bulgarian Academy of Science by reducing subsidies and changing its financing, reforming the state-owned railway company and blocking another loan for it until it is reformed; accelerating the increase of retirement age, abolishing privileges for officials in the Interior Ministry and the army.

According to the journalist, the finance minister can do additional things, like "to balance the budget, to plan revenues even more conservatively to reduce risks, to change the very way of budgeting - introducing competition at a programme level and thus improving the efficiency of public spending, to speed up privatisation to increase money in the fiscal reserve, to exert more pressure for reforms, especially in healthcare, education, administration, pension and social systems."