„The increase in salaries in the budget sphere must be stopped. This deficit, which is coming at the end of the year, will be difficult to overcome. It will take two years to stabilize the country“. This was said in the studio of „Face to Face“ Ivan Kostov.
„Inflation is within the predictable range. There are factors that could not be accounted for as fueling inflationary expectations. This causes people to accelerate consumption. This is known in economic literature. There are also mathematical models. As for the fear, it is justified. People are entering a different system in which they have to calculate their budgets - income, expenses and savings, he added.
„It was not expected that there would be strong opposition in Bulgaria against the introduction of the euro, and from the highest position in the country - the presidency,“ Kostov emphasized.
„In the gray sector, there is a lot of unregistered income that is not in banks and for which taxes have not been paid. This income currently has to be converted into euros, which is happening at a very fast pace. There is a decline in the money supply in circulation. Many transactions are being made in real estate and cars. The holders of unregulated income are thus „parking“ their money, expecting to sell the apartment later“, commented the former prime minister.
„We are one of the countries with the largest gray sector. A pro-inflationary policy through the government is also possible. This is done through a budget with a very large deficit. The state has indexed pensions, incomes, increased wages in one sector or another. This fuels inflation and hits people, threatening them with poverty. This is an anti-social policy“.
Kostov is categorical that introducing a price ceiling is not a good practice.
„Countries have introduced a profit ceiling. The Competition Commission can start fighting monopolistic and oligopolistic structures in the country. One of the measures I wrote about is to strengthen competition in every way. Much depends on how people and households will behave in this turbulent period. They should ask for a receipt - this is the way to come to light. Companies that hire undocumented workers should be declared. The gray sector forces pro-inflationary factors“, he explained.
“There is strong tension on the labor market, and the shortage of labor forces employers to raise wages ahead of schedule. That is why it was reasonable to allow foreign workers to be hired. This is a relief. Loans that are taken to force consumption and increase wages without an increase in products and services, are bad loans“, Kostov commented.
“It is right to provide information on the implementation of the budget. These things are public. They must be transparent. Information on the cash implementation of the budget must be provided on time. The implementation of the budget for June should be released at the end of July. We saw that the implementation for April and May was delayed for a long time. They did not appear when they were supposed to. This is probably to make the situation more favorable for Bulgaria to make the decision (on the euro – ed. note),” he said.
„Bulgaria is fully ready and meets all the criteria for introducing the euro. Bulgaria is also in a much better financial condition compared to countries in the eurozone. We have been pursuing a sensible and tight financial policy for many years. Bulgaria is fully ready. I do not agree with those who invent and express their own fears. The government is borrowing at historically low interest rates. The introduction of the euro is already useful. These are the first signs of usefulness – "interest rates on the state debt are falling," the former prime minister pointed out.
The Presidential Elections and the Government
„If we talk about trust in the government in general, it is measured and it is not good. The government and the National Assembly, the rulers cannot push through reasonable measures for the recovery of the country with a deficit that has been left. There are measures that bring people out onto the streets. I give as an example the „yellow vests“ in France and the pension reform. In terms of the country's economic policy, it should be measured in a different way. They ask people and businesses how they see the prospects ahead of them in the next three years“.
„I believe that a joint presidential candidacy is possible. There are candidates who can be supported by both GERB and PP-DB. Whether an agreement can be reached is another matter. This should not be ruled out. PP-DB must also calculate this - what they will do if GERB offers them a candidacy. The Romanian option is big in Bulgaria, because Bulgaria is struck by the hybrid aggression of the Russian Federation.
According to Ivan Kostov, there are legitimate reasons for „We continue the change“ to feel repressed.