In August, the Bulgarian government adopted a detailed action plan for joining ERM II and the Banking Union and there were some changes1 to the Bulgarian National Bank Act that also seem to lead in this general direction.
Similar to other CEE economies, privatization in Bulgaria did not start with the 1989–1990 transition period. The same applied to other market reforms, too, as the dominant view among policymakers at that time was that Bulgaria should undertake gradual changes to minimize social suffering.
Indeed, binding European funds with clear commitments from recipient countries sounds like a good idea. The big problem of a number of European policies and institutes is precisely the lack of an enforcement mechanisms, for example real penalties, which could help as a correction to a “misbehaving” member state.
Recent pre-election debates in Bulgarian media have left many people with the impression that the flat income tax is probably the most important “problem” to be solved by the new government.
In line with Laffer’s curve[1], the low flat income tax has led to a steady growth in revenues from income tax, because people responded to the reduced incentives for concealing income.
The effectiveness of European structural and cohesion funds (SCF) has long been a contradictory topic, both for European institutions and researchers. This matter is particularly interesting for in-depth exploration, because of the lack of unambiguous evidence regarding the effect of these funds on beneficiary regions and countries. Four countries (Spain, Italy, Portugal and Greece) have remained the main beneficiaries of SCF since 1989[1]; however, data on GDP growth and labour markets in these countries is…
Right from the start of the Great Recession the current account deficit shrunk with 62% in 2009, got to the relatively low level of 376 million euro in 2010 (around 1% of GDP) and turned into surplus of 361 million euro (close to 1% of GDP) in 2011. By doing so, all experts, who continuously scared the people with this “huge current account deficit”, which we were suppose to believe was extremely dangerous for our…
Just recently the Ministry of Finance issued 5-year external debt in euro, with annual coupon of 4,25% and annual yield of 4,436%. The total value of the issue was EUR 950 million, while the submitted bids stood at over EUR 6 billion. The issue was oversubscribed in just 30 minutes from hitting the screens and the investors’ interest was sizable. The debt issue was successful by all indicators – attracted investors’ interest, easily oversubscribed and…
