Cause and Effect in European Politics and Law

The budget has already been reviewed by taxpayers

Adelina Marini, May 6, 2010

The government has to finally take its political responsibility and decide what part of the spending it should reduce in order to avoid a debt crisis, commented for euinside the economic analyst and managing associate in Industry Watch Gheorghi Stoev, regarding the announcement of the prime minister for EBF TV that the budget will be reviewed. Gheorghi Stoev explained that the revenues part of the budget is being reviewed on its own and does not depend on the government, because people can produce a specific amount of money, only part of which goes into the budget.

Therefore the government must do what depends on its actions and that is - cutting of spending. The economic analyst added that the "budgetary review" must have been made in the beginning of the year when the first data for the implementation of the budget showed a clear trend for a fiscal deficit.

In the same time Mr Stoev explained that in Bulgaria the problem with the fiscal deficit is being imposed, semantically, as an anti crisis package. "We are talking about a budgetary crisis in Bulgaria, about measures that are meant to rescue the budget from a spiral deficit and a debt crisis. This is the problem. It is not the crisis, it is not anti crisis measures, nor the trade unions, not the employers. In other words, the shift of the focus away from the problem and the solution", the managing associate of Industry Watch said and added: "I personally think that an anti crisis package, translated to a normal language from the terminology of the government means "a series of steps, aimed at cutting government spending".

In his interview, quoted above, the prime minister specified that currently Bulgaria needed stimulation of consumption because Bulgarians' savings had increased by 1 bn levs for the last five months. According to Gheorghi Stoev there is no logic in such a statement. "I would not bind my restriction of spending with restricting the spending of my clients, for example. Similarly the premier should not bind his spending restrictions with cutting consumers' expenditures or with increasing consumers' spending".

The economic analyst also added that we were lucky to have the example of the "live macro economic laboratory in Greece in order to see where we will go if we continue with the deficits".