/ world today news/ Simeon Dyankov‘s cashless diet brought us to the bottom of the crisis. Predictions that Bulgaria will go heavily into debt and our grandchildren will pay loans are greatly exaggerated. This is talk of the market.
The only thing I can see are prospects for a slight revival, which if it reaches 1.5% we can be happy. But these are not rates that indicate stability of growth. Nor are these the paces we need. According to all the confessions that were heard during these days is the growth of tow. Europe is slowly peeling off and once again pulling us out of the crisis. Over the past few years, we have seen Europe exit and re-enter the crisis. Last time, she couldn’t move us at all because of the austerity policy of Finance Minister Simeon Dyankov. Today things look slightly more favorable. But unfortunately, we still have no prospects for lasting and stable growth, nor for any catching up with European countries.
The policy of austerity and zero budget deficit at any cost, which was followed by Minister Dyankov, is absolutely inadequate. I’ve been criticizing her all along. The modern budgetary view in the European Union is the symmetrical response budget, i.e. in a crisis, budgets go into deficit, which is compensated during growth. This is modern budget policy. Yes, Europe has not resolved its main issue, which has dragged on for years and will be very difficult to resolve. This is the problem with high government debt. Europe allowed itself, due to misunderstood sociality, to run deficits even during growth and to accumulate indebtedness. This is the big problem, not only in the “Old Continent”, it also faces the rest of the modern world. Let’s remember that the US also got into a lot of debt.
The claims we hear lately that our grandchildren will pay off the loans we get today are greatly exaggerated. That’s not the question. Bulgaria had to take a loan back in 2008 and secure financing from the International Monetary Fund and inject money into the economy, because Dyankov’s cashless diet brought us to the bottom of the crisis for 5 years, from which we cannot get out. This money that we are taking at the moment, I would criticize the way it is being used. According to all the recommendations of leading economists, including the IMF, these funds should be invested in the construction of basic infrastructure, which includes highways, modernization of railways. lines, sewerage and water supply, in a broad sense, energy can also be included here. A multiplier effect should be sought. With the loans that Bulgaria receives today, we are fixing holes. Not that this money is superfluous for the economy, but the effect is much smaller. However, the predictions that Bulgaria will go into debt with 120% of GDP, like Greece, are greatly exaggerated. This is talk of the market.
The idea of public-private partnership floating in the public space is not harmful. The question is where? The public-private partnership should not be used in the construction of the highways “Hemus” and “Black Sea”, the tunnel under Petrokhan. This will only lead to the emergence of toll highways in the country. I was recently in Portugal and their toll roads are deserted. This should not be allowed and the highways in our country should be built with European money and be accessible. Public-private partnership should be used in a number of selected projects for the re-industrialization of the country. Starting from “Kremikovtsi”, going through the BCC in Kardzhali and VMZ in Sopot, let’s try to restore the production of buses in Botevgrad. Perhaps there are three or four more nodal places where something can be done with the help of public-private partnership. Nowhere has the public-private partnership justified itself in basic infrastructure. Everything neoliberal that was experimented with in Britain, of the sort of private companies running the London Underground and the railways, then came back into state hands again, but with very great losses to society. We don’t need to do such experiments. Here I must emphasize the massive investment of state money in the railways in Bulgaria. In no case should we set ourselves any abstract goals such as our trains developing a speed of 300 km per hour. We are very far from the landscape and needs of these things. We need railways that can provide an average speed of 100 km per hour and they are already competitive with road transport.
Yes to reindustrialization, but not to talk, but reindustrialization in practice. There is nothing wrong with mixing state and private money for a while, after which the state will come out and sell its stake. /BGNES
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Professor Chavdar Nikolov is a public finance specialist.
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