In relation to the draft Medium-term financial framework and basic assumptions for the period 2010-2013, presented in the report of the Ministry of Finance, the Confederation of Employers and Industrialists in Bulgaria has the following opinion:
1. KRIB welcomes the fact that, for the first time since the beginning of the crisis, the government of Bulgaria has adopted a systematic analytical and programmatic approach to the development and communication of medium-term fiscal and socio-economic policies that would stabilize the country's economy and enable a possible fastest and conflict-free exit from the crisis;
For these reasons, KRIB fully supports the main goals on which the economic and fiscal policy focuses:
- Maintaining the stability of the Currency Board
– Orientation of public spending in the direction of stimulating the factors ensuring economic growth in accordance with the renewed Lisbon strategy
– Improving the business environment and the investment climate
2. KRIB supports the government's decision under the conditions of the Currency Board to actively use one of the few tools at its disposal to stimulate economic and investment activity and reduce the share of the gray economy, namely the tax-insurance policy.
KRIB fully supports the government's decision to maintain direct tax rates, which encourages investment activity, ensuring a transparent, predictable and sustainable nature of the government's efforts to turn Bulgaria into a leading investment destination.
A special place in this process is dedicated by KRIB to the government's decision to comply with an important pre-election commitment, further reducing the insurance burden cumulatively for the period by an additional 5 percentage points. For KRIB, reducing insurance is not an end in itself. For us, this is one of the few possible steps that:
– can strengthen confidence in the pension system, which has recently been declining again
– have a strong anti-crisis character and will lead to the preservation of jobs
- will encourage economic and investment activity, preserving the stability of the economy in crisis conditions
– will increase collections, leaving at the same time more funds in insurers and insured.
For these reasons, KRIB supports the government's proposals in the area of tax-insurance policy. At the same time, KRIB proposes in the insurance policy for the period 2011-2013 to include an opportunity for an accelerated annual reduction by more than 1 percentage point. of the insurance burden for the "Pensions" Fund, in the event that the trends in the economic environment improve to a higher degree than expected during the targeted period.
3. With regard to income policy, KRIB understands the objective impossibility of providing financial resources for their further increase. In the period of a deepening crisis for Bulgaria, the efforts can be directed only and only to the preservation of the income levels, which is enshrined as a minimum program in the proposed SFR. It should also be taken into account the fact that in conditions of continued low inflation or even deflation, the preservation of the price of labor means, in practice, the preservation or increase, however small, of real incomes. Unfortunately, we are unable to support the latter principle statement with concrete figures, as we do not have the government's specific inflation forecasts for the period under review.
4. We would like to emphasize that neither the analysis of the achieved macroeconomic results nor the trends in the economic environment have been provided to KRIB. We are also not familiar with the macroeconomic forecasts and proposed underlying assumptions. We also do not have the particularly important information about the implementation of the consolidated fiscal program for 2009. In the conditions of crisis, without the specified analyzes and forecasts, it is particularly difficult to assess how specific medium-term macroeconomic and fiscal target values are sufficiently justified and realistic.
In conclusion, we should note that KRIB views the proposed SFR as moderately conservative, which is currently the only possible approach. In the event of a change in the positive direction of the economic and financial situation worldwide, KRIB reserves the right to propose to the government a review and possible revision of the SFR in order to adequately account for the changes that have occurred.
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