The recovery and sustainability plan has also drawn criticism. The Confederation of Independent Trade Unions of Bulgaria warns that the reforms agreed with Brussels will raise the electricity bill of the Bulgarian almost 4 times. And within the next one year. Against this background, the BSP is proposing new economic measures from July 1, including a ceiling on certain prices or taxation of the excess profits of some energy companies in our country.
Two of the reforms included in the Recovery Plan are of concern to CITUB. One of them envisages many of the Bulgarian household consumers of electricity to get out of the regulated free market of electricity, which means that our bills will jump dramatically.
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“They are formed by a mix of production from Bulgarian power plants, which is regulated by the EWRC and is very little influenced by free market prices. Even if it is twice – we are already talking about a significant jump, which households are not ready to accept, “said Anton Ivanov, who is an energy adviser to CITUB.
On the free market, however, the price of electricity is up to 4 times higher than that of the regulated market. In order to prevent such a blow to our pockets, the CITUB wants to talk to the government.
“We insist to the maximum extent that the electricity produced at Kozloduy NPP, as well as in other Bulgarian power plants, be the basis for setting prices for the Bulgarian market for household consumers,” the CITUB said.
And in order to reduce the effect of all the blows on the pocket of the Bulgarian, the BSP proposes that the state impose a ceiling on certain prices.
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“Meat products, milk, oil, which is in short supply, and the most important thing for Bulgarians will be, of course, electricity and heating,” said Rumen Gechev of the BSP.
If the coalition unites around such a measure, the state will have to pay the difference between the ceiling and real market prices. According to BSP estimates, nearly BGN 3 billion can be allocated for this with the July 1 budget update. However, economist Stoyan Panchev does not think this will benefit consumers.
“Price ceilings have one big disadvantage and that is that if they are imposed, the goods start to disappear from the shelves in stores. “These goods are beginning to be traded on an alternative black market, where they reach even higher than their real price,” the economist warned.
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Another idea of the socialists is the introduction of differentiated VAT, which already exists throughout Europe except Bulgaria and Denmark.
According to Panchev, of all the ideas of the BSP, the one for the differentiated VAT can work out the fastest and easiest, although he expects great resistance from the Ministry of Finance. However, CITUB opposes the reduction of the rate only for certain products. According to them, the better measure is for VAT on all goods and services to fall from 20 to 15%.
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