“Debt issue will have a negative impact on businesses, because it will entail future additional payments on the part of the government. Moreover, such payments will be channeled towards specific firms rather than the entrepreneurial class as a whole.” This was the opinion expressed this morning, August 6, on TV Bulgaria On Air by Kaloyan Staikov, an economist commenting on the budget amendments proposed by the Oresharski government.
“It is true that part of the money will be stashed in the national reserve and used to cover unforeseen and urgently needed expenses, i.e. it will be spent in a variety of ways. The problem is that the government will manage this cash without the approval of parliament,” explained the expert.
“The fact that the passage of the new budget was not preceded by serious parliamentary debates is unacceptable,” Staikov pointed out. “No solid arguments were presented; the same simplistic proposition – namely that the government needs money to pay for services and goods private businesses have already delivered – was endlessly rehashed. What was absent, however, was specific information substantiating the claim that the government’s payments have been subject to drastic delays. In addition, there is no indication that the treasury is failing to raise enough revenue.”
According to Staikov, demands for additional amendments of the budget “sound very disturbing.” “It is obvious that the rulers want to spend more in order to fulfill their electoral promises. But this is not the way to optimize government spending. The budget could have been implemented. There were sufficient reserves to draw upon. What we need is reforms,” maintained the expert.
According to Staikov Bulgaria’s governing elites send erratic signals towards the country’s foreign partners. “Surely the investors have noticed that,” asserted the economist.
He defended the view that since the president’s interventions are political in character, a presidential veto on the new budget law would have no economic consequences. “If President Plevneliev decides to resort to his veto power, the budget will simply go back to parliament. The majority coalition already passed it once, and it will pass it again.”
“When the government compares the current levels of revenue collection with previous one, I am not sure what year they have in mind. At present, revenue collection does not appear to be a problem – the government has raised more money, in fact, than in 2011, when there was a surplus. European economies are expected to rebound by the end of this year, and this fact will have a positive impact on our budget,” concluded Staikov.
