site.btaUPDATED Finance Minister: Support for Businesses, End-Consumers Should be Strictly Targeted

In an interview for Bulgarian National Radio, caretaker Finance Minister Rositsa Velkova said that taking into account the European Commission, international organizations and the expert opinion at her Ministry, support measures for businesses and end-consumers should be strictly targeted. 

All the measures taken to tackle inflation with this year's update will continue to operate in 2023 through the state budget extension bill, Velkova said. Measures to support businesses from high electricity prices will continue.

The fuel discount of BGN 0.25 per litre will continue to be untargeted until the end of 2022 but will be targeted in 2023. The aid will continue, but not in the form it is currently provided, Rositsa Velkova explained. She pointed out that if the amendments to the proposals in the Corporate Income Tax Act are adopted, by the end of 2022 the ministers of labour and social policy and the economy will propose targeted fuel aid for public transport users and citizens based on income criteria. Electricity price support should also be targeted, Velkova noted. She said that the specific design of the aid schemes is yet to be worked out.

Velkova explained why the caretaker government has not submitted a new budget for 2023. The budget is a financial plan of policies and we are a caretaker government which should not be implementing policies, Velkova said. We do not think it is right for a caretaker government, which is appointed by the president, not elected by parliament, which does not have a parliamentary majority, to propose to the National Assembly policies that will have an impact in a three-year period, the finance minister said, adding that this should be done by a regular government. Velkova said that the extension bill preserves the policies adopted by parliament with the last update on July 1, 2022, of the current budget.  

According to Velkova, the proposal for a minimum monthly wage of BGN 850 as of 2023, is an extremely high increase. The budget balance deteriorates by BGN 50 million for every BGN 10 increase in the minimum wage, she noted. Velkova said that there has never been such a drastic increase in the minimum wage. There should definitely be an increase in the minimum wage, but not that steep, she added. 

Commenting on the strike by employees at the Ministry of Foreign Affairs demanding higher salaries, Velkova said the lack of a unified income policy in 2022 was creating tension in all other budget organisations where there had been no increase. Those working in the Foreign Ministry have a point, Velkova said, but added that a demand for a 100% pay increase is too high. 

She said that Bulgaria's entry into the euro area is an absolute priority in the country's policy. According to her, January 1, 2024 is a realistic deadline for joining the euro area if the country put in maximum effort. If this deadline is missed and Bulgaria fails to meet it, Velkova does not see another window in the near future. She mentioned an opinion poll on people’s and businesses’ attitudes toward the eurozone membership, the results of which will be presented on December 8. There is some scepticism in people's attitudes, but in practical terms, there is a positive perception, Velkova said.