Bulgaria

Although Bulgaria has officially been in a budgetary consolidation phase during the entire 2013-2015 period, public expenditure went out of control on several occasions. Yet again the newly presented medium-term budget framework provides for decreasing deficits, while current expenditures (and thus deficits) are being hiked.

The brief message of the report regarding the effectiveness of the banking supervision in Bulgaria is unambiguous: yes, the supervision has demonstrated weaknesses, and yes, the CCB management has circumvented and violated the regulations and the good banking practices.

Security is the biggest challenge for our economy. To counteract a similar challenge, Israel, for example, is entirely militarized, regardless of the fact that numerous international lobbyist groups assist it, including financially. A country facing such security challenges might have armed forces three or four times stronger than Georgia and a defense budget 10 times larger.

At least 70% of all drafts of normative acts submitted to the Bulgarian Parliament are with no justification and assessment of expected costs and benefits. This leads to wrong policies, costly policy mistakes, burdened businesses, unpredictable business environment and opportunities for lobbyist to act in favour of specific groups.

On July 23, The Guardian published the results of a report by the “Tax Justice Network” (TJN). The title – “Wealth doesn’t trickle down – it just floods offshore” – cannot remain unnoticed by the reading public.

2014 passed under the sign of decreasing unemployment and increasing employment in Bulgaria. Although a big part of the population still hasn’t felt the benefits of these favourable tendencies, they are not only present in the leading economic centres, but also in some of the smaller regions of the country.

Just before Christmas, it became clear that the prime minister and the two major labor unions had signed a memorandum which not only prevents raising the retirement age, but also fundamentally changes the pension model of Bulgaria. Noteworthy, the main agents behind this decision were the same people who in 2010 decided to steal 100 million leva from professional pension funds, thus breaking the Constitution.

It has already been 25 years since Bulgaria started its unsteady transition to a market economy after a long period of Communist rule. However, our society is yet to experience the true benefits of liberal democracy, as well as arguably – capitalism itself.

On June 21, BNB announced that it will fulfill its mission at CCB within a month, by July 21. By then it promises that CCB will have either a new ownership structure or a strategic investor, or else be taken by the only state-owned Bulgarian Development Bank (BDB, with about 1% market share).

Greeks are preparing a new emission of their bonds. Although only three years but they should bring 2.5-3 billion euro to the country.