Photo: Bulgaria ON AIR
A Treasury report has sparked sharp political commentary and fears that the country is on the brink of bankruptcy.
“The country is not immediately threatened with bankruptcy. We have seen findings of factology – facts that are unpleasant and must be taken into account. It is established that the state spends much more than it can afford. It spends unwisely and without knowing what effect achieves – throwing money for unaddressed benefits. The complete stupidity of reducing the VAT rates of certain groups, expecting to obtain a social effect. Thus, revenue is lost in the budget and it cannot cover these costs,” said the financial expert Assoc. Emil Hersev in the “Day ON AIR” studio.
He emphasized that we have an excessive administration against the background of an underdeveloped economy. It also supported the conclusion that a huge part of the expenses goes to supplementing pensions and the health budget, which should be 0.
“The Ministry of Finance draws apocalyptic conclusions in order to make proposals that are otherwise completely normal. The future parliament must listen to them – liquidate the grid that scatters government spending without calculating the effect of untargeted aid. It must liquidate the broken system of VAT, to eliminate the rates that were given out as social benefits and to tighten the reins of government spending,” recommended Assoc. Hersev.
Before Bulgaria ON AIR the economist expressed his categorical position that the incomes of Bulgarians will increase. But business should be leading, “and not the state forcefully pumping up business costs with an increase every month or two in the minimum wage.
“MF really scares. It is normal to instill apprehension, critical thinking, probably even fear in some. It shows that something needs to be done and that is absolutely true,” added Assoc. Hersev.
Regarding the risk of a change in the existing exchange rate of the leva to the euro, the economist clarified that there is always such a risk.
“There is such a risk, since there is one parliament that can decide this. This risk is not very big. In the last parliament, we saw the formation of a reasonable majority, which did not allow the adoption of the most severe populist proposals,” he said the guest.
The economist recommended that we enter the Eurozone as soon as possible and this risk disappears.
“Whatever the change of the fixed exchange rate is, it would mean breaking up the financial system in Bulgaria and loss of trust and confiscation, which would create a very serious social and economic problem,” concluded Assoc. Hersev.
