/ world today news/ IA CROSS interview with Simeon Dyankov, Deputy Prime Minister and Minister of Finance
Reporter: According to “Eurostat” data, Bulgaria recorded a growth of the Gross Domestic Product /GDP/ of 0.5%. What is your assessment and where do we rank among other countries?
Simeon Dyankov: 0.5% for the fourth quarter is a good development for us, especially against the background of the pan-European one, which shows that for the same last quarter of 2012, the Eurozone had a drop of 0.9%, and the entire European Union, the 27 countries, a drop of 0.6%. so the averages are negative. Bulgaria with this half percent growth will end up with a growth somewhere around 1%, 2012 is the year in question. This growth ranks us in fifth place in the entire EU after Estonia, Poland, Latvia, Lithuania, which is just a little ahead of us, and Bulgaria is fifth. So, on the one hand, this is a good result – in the top five of Europe. What’s worrying about the data, because the EU-wide data came out today, is that some of the small economies, I mentioned them just now, the five with the highest economic growth – Estonia, Poland, Latvia, Lithuania, Bulgaria, the sixth is Slovakia with approximately the same results as Bulgaria. On the other hand, however, the six largest economies in the EU all had negative results, with an economic decline for the fourth quarter.
Reporter: How do you explain that?
Simeon Dyankov: Starting from Spain, where it is minus 3%, Italy – minus 2.7%, the Netherlands – minus 1.7%, France, Great Britain and for the first time in a long time, Germany is also down by 0.6%. From this, in fact, comes the relatively more negative overall result for the EU. The six largest economies all posted declines for the first time since 2009. In the case of Germany, I’m already saying this based on ECOFIN analysis from earlier this week, Germany is expected to have a weak first quarter of this year as well, probably also an economic downturn, but after that things in Germany will move forward again and towards the end of the year for Germany to already have growth. While in the other five major economies – Great Britain, France, Italy, Spain, the Netherlands, the whole of 2013 will be in negative territory, which is a problem not only for these economies, but also for countries like Bulgaria, because these are our biggest trade partners. partners within the EU. And not only Bulgaria, in fact all smaller economies such as the Czech Republic, which also has quite negative data, minus 2% already for the sixth quarter. This is already beginning to affect otherwise fairly stable smaller economies such as Austria and Finland. Finland is already in a state of decline for the third quarter. Until 2011, it was, together with Sweden and Poland, the most economically stable country in the EU. Austria is still in positive territory, but it is also approaching zero.
Reporter: Protests against high electricity bills continue. At the same time, the comments of politicians and experts continue regarding the price of electricity in our country. Among them was the statement yesterday by your colleague Delyan Dobrev, the Minister of Economy, according to whom the main problem is in the so-called a mix of plants, some of which sell quite expensive electricity. What is your comment?
Simeon Dyankov: Yesterday I had the opportunity to talk with Minister Dobrev. Also, since yesterday, you know, the financial inspectorate, ADFI, is already in the State Economic and Trade Commission to check all contracts in the last 10 years. They can help the new leadership of the CEWR, Ms. Yuliana Ivanova, to quickly see if this information that Minister Dobrev submitted, namely that some who produce and sell energy in a mix, turn out not to have long-term contracts , some of Kovacki’s companies were mentioned. If that’s the case, it’s interesting for two reasons – first, because they can immediately be cut out of the mix if they’re priced high, as long as there are no long-term contracts. This is correct in my opinion. And secondly, it is proper then that the ADFI, and with time the prosecutor’s office, check who and when included them in the mix. This is the work of the previous management of DKEVR, but it will be interesting in which year they are included in the mix, because in the absence of long-term contracts, it means rather irregularity, the presence of ill will on the part of the former management of DKEVR, because this undoubtedly increases and significantly the average price of electricity. On the plus side, if it does turn out that some of the more expensive electricity sellers in the mix don’t have long-term contracts, they could be switched off and that would have a positive effect on reducing the price. However, it is equally important to check when they are included in the overall mix. Earlier, literally an hour ago, we had such a conversation with Mrs. Yuliana Ivanova and also with the inspectors from the financial inspectorate, who are already there, to check this thesis as a priority – whether this is true and if so, whether they can be quickly taken actions. This will undoubtedly bring down the cost of electricity and even within the next month or two.
Reporter: Former Energy Minister Traicho Traikov highlighted today as one of the measures to reduce the price of electricity, or rather consumption. He continues to care about energy efficiency and, in his opinion, that is where the focus should go. What do you think?
Simeon Dyankov: That’s right. Bulgaria is far behind in energy efficiency. There are already some projects under the “Kozloduy” fund, which mainly work with municipal buildings and achieve enviable energy efficiency with relatively small investments, reducing the energy dependence of this type of buildings by up to 50%. We are mainly talking about nurseries, kindergartens, community centers, theaters and etc. We have experience in the “Kozloduy” Fund, as well as some experience in the program of the Ministry of Construction and Infrastructure, where buildings are rehabilitated. There is also an average of 50% reduction in energy dependence per apartment and therefore a reduction in bills. However, this will take time. It will take 2-3 years for there to be a more massive use of both European funds and state funds. By the way, the Bulgarian Development Bank has a project where a lot of funds are given on a preferential basis, about BGN 150 million. There is currently a credit line specifically for energy efficiency.
However, as a priority now, the DCEWR and the new management and the inspectorate must check all contracts – those that are not long-term, possibly to be changed. This means that DKEVR is much more active in its talks with those entrepreneurs who sell energy, and also to check the long-term contracts – whether they are up to date. For me, this is the first and main step of the new head of the State Environmental Protection Agency. From there, something that we are also looking forward to, towards the end of this week, the first bills, the first groups of bills for January, should come out. Let’s see if these bills are lower than the December ones and by how much. From there to draw the conclusion whether December was really an exception, a long month with many days off, or whether some lasting trend is observed. If there is any lasting trend, the State Environmental Protection Agency clearly has not done its job with the times and now we are suffering both because of green energies and because of Maritsi, which were already built during Kostov’s time. But it turns out, perhaps it is so, according to the words of Minister Dobrev, that somewhere there are short-term contracts that can easily be either renegotiated or stopped altogether, which, if so, already raises serious questions for the previous leadership of DKEVR.
Reporter: It remains to be seen what the new management of the energy regulator will do. Thank you for this interview. A successful day.
Simeon Dyankov: I thank you too. All good.
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