Former Prime Minister Ivan Kostov has criticized the state draft budget for next year, which is being discussed in Parliament.
"The 2021 budget bill destroys a 23-year political consensus on the country's financial stability. Let those who are doing it hear me well. The facts show that the financial stability has been achieved by the governance of the United Democratic Forces since 1997," the ex-Prime minister explained.
He reminded that the current Finance Minister Kiril Ananiev was deputy finance minister at the time and knows perfectly well what deprivations and difficulties they had overcome in order to take the country out of the financial catastrophe of Zhan Videnov's government.
"I do not know why he has now agreed to destabilize the country's budget to such an extent," Kostov told BNR.
Ivan Kostov also stressed that pandemics are one-off processes, no matter how long they last, and a one-off process is met with one-off extraordinary costs, such as the measure "60/40"."If there is an epidemic situation – there is a measure, if there is no epidemic situation – there is no measure. There is a constant increase in the budget spending – for pensions, for social. This is unacceptable as a response to the extraordinary circumstances of the epidemic. This unacceptable spending policy will lead to an excessive structural deficit. This will quickly increase the country's debt and consequently the interest service costs. The state will become weaker and with more limited opportunities", added Ivan Kostov.
His view broadly overlaps with the changes to the Public Finance Act adopted at first reading by Parliament. MPs decided that the budget deficit would be able to exceed 3% of gross domestic product in exceptional circumstances. The government fixed a budget deficit of BGN 5.2 billion (4.4% of GDP) for 2020 and a further BGN 4.9 billion (3.9% of GDP) for 2021.
The former prime minister predicts that the real reason for the planned financial destabilization is the preparation of the government for the upcoming parliamentary elections.
However, according to Finance Minister Kiril Ananiev, at a time when revenues are falling and additional costs need to be incurred to cope with the adverse effects of the crisis, it is normal to have a loosening of the fiscal position. "I see nothing populist in this budget and nothing that differs from the government's policy in the governance agenda adopted in 2017. Any government will implement the budget next year," Ananiev said.
Despite his claims, Prime Minister Boyko Borisov further bloated budget 2021 by BGN 611 million. BGN 237 million is provided for supplements to the remunerations of physicians and from January 1 to the end of 2021 doctors will receive an additional BGN 600 to their salaries, nurses – BGN 360, and orderlies – BGN 120. A 15% increase in the salaries of the employees in the system of the Ministry of Interior is envisaged, which will cost BGN 231 million, and an additional BGN 143 million are set for the abolition of the income criterion for child benefits.
