/ world today news/ Budget 2016 is about the status quo and momentum.
Prof. Krastyo Petkov, Chairman of the Union of Economists:
If you look closely at the 2016 budget that was passed on Wednesday, along with the tax laws, the analysis and the reasoning behind it, to me it is a budget of momentum.
For the 6-7th year in a row, a consolidated financial program and state budget has been drawn up, which mainly takes care of what expenses to make and leaves the problem of income in the background. Or more precisely – the opportunities to increase income outside of taking new and new loans. From this point of view, it will repeat a vicious practice of the last 4 years – an update is inevitable, since it cannot withstand this framework and the parameters laid down in it. Probably in October-November next year, first secretly, and then – after the fact, a decision will have to be made to change what the National Assembly voted on Wednesday.
From another point of view, the escalating geopolitical tensions in the Middle East and the influx of refugees into Europe are the next factor that our budget financiers are not taking into account. The reason is not so much that they don’t want to, but that they don’t have and aren’t making the effort to get more information to help them better predict state spending next year. Yes, everyone already knows that it will be necessary to restructure the European budget, as well as the entire framework on which the financial policy of the EU is built in the direction of increasing security spending and reducing, first of all, spending on social needs, education etc. But unlike one Viktor Orban, not that I am a fan of him, Bulgarian politicians will not even defend the interests of the poorest country in the EU, which is ours, in raising new funds from the member states and restructuring the European budget. The second risk, which is completely absent and not calculated by the politicians in our country, is the lack of an answer as to how long the deflation will continue in our country and how long it will suffocate the main and healthy source of income – the real sector. On this issue, I did not come across even one sentence in the reports and debates surrounding Budget 2016. Not to mention that the very level of discussions in the parliament was under all criticism.
Because the National Assembly does not currently have the most important core – macroeconomists who know what is happening in the Bulgarian and European economy. On the other hand, accountants and budget managers of small and medium-sized speculators parade on the red carpet, who bring here the views and ideas with which they served themselves before coming to the National Assembly. And one should think in a statesmanlike way, which means – wisely and anticipating the emerging risks.
Evgeni Stoyanov, financial consultant:
Budgets in Bulgaria over the last ten years have been pro-cyclical, i.e. cannot help smooth the economic cycle. And Budget 2016 is at the status quo. It cannot be otherwise, because we do not have sovereignty in monetary policy, we cannot print money and determine internal credit independently. And that’s why our budget is limited to prevent hyperinflation. The MoF is acting cautiously because we have had a negative experience with the banking system, which they are trying not to repeat.
I do not see measures to stimulate incomes in the budget for next years. And the extent to which it will be fulfilled will also depend on the inflow of European funds. But I do not think that in the event of certain unfavorable circumstances, the EU will cut off part of the promised money. There are other solutions.
In the short term, it is difficult for me to give a forecast, but the very fact that we cannot stabilize our economic growth at a normal level speaks of a sufficiently difficult period for us. We have been in depression for 5 years now, which is a serious damage. I will not dwell in detail on our demographic problems, but they also have a negative impact. Because in the long term, the growth of the economy is limited by the growth of the population, which is negative.
However, I assume that in emergency circumstances related to the strengthening of security measures and problems with migrants, we will not be harmed in the implementation of European programs. I assume that we will receive additional funding for possible unforeseen expenses, which, on the other hand, will not reach those dimensions that are being talked about in the media. Until we get accurate information, it is difficult to make a prediction, and I doubt that when talking about billions, they are accurately calculated.
If someone promised 3 billion euros to Turkey, it is logical that whoever made this commitment should also pay them accordingly. I don’t know how legal it is to promise funding on behalf of someone else – I don’t know if it’s proper for a European leader, let alone a large country in the EU, to speak on behalf of all the other countries. In my opinion, the issue with this aid has not been finally resolved, despite the signed agreement.
Georgi Atanasov, financier from the Bulgarian Financial Forum:
We live in a particularly dynamic financial situation and it is difficult to accurately calculate the risks at the European level. Think how much the parameters have changed from the original set for the number of refugees that Germany can accept. At first the numbers were the same, but later, since this is a settled country, they gathered at the highest level and voted a new number. Because they realized that their expectations were unrealistic. What we observe is that whatever changes occur, the German state functions adequately and finds the solutions.
“All EU member states must help in collecting the total funds of 3 billion euros for the refugees in Turkey. This is a matter of European solidarity,” said Germany’s finance ministry secretary, Jens Spahn, to their daily newspaper. Yes, it may not be a problem for them because of the standard and high degree of organization, but not for countries like ours.
When we talk about the budget and finances, we must remember that things are also related to the demographic crisis in our country. It is disturbing that young and educated people continue to leave the country. This trend should finally turn on the red light for those in power.
The budget adopted yesterday assumes a higher collection, but since the wealthy and the wealthy have privileges, the authorities will rely on this money to be collected from the rest of the population. For example, the banking system pumps the money into itself, then the government serves them a bundle of securities, they take out the money and buy it.
I cannot precisely comment on the 2016 Budget, as that is what budgeters should do – with knowledge in the field and with years of experience. But it strikes me that the government has no enthusiasm for reforms, even because it is a coalition. The reforms, as much as they are talked about, are being articulated by a small coalition partner, but these people, even if they have the best intentions, simply don’t have the political clout and will to push them through.
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