The changes in the Euro Law are extremely harmful and will cause a price shock on the Bulgarian economy, economist Georgi Ganev said in an interview with BNR. The former MP from "Democratic Bulgaria" warned that due to the legislative changes, prices will be higher than they would be without them.
"It is not about inflation, but about a price shock, a one-time price shock on all prices because of the stupidity of the state," Ganev explained in the "12+3" program.
According to the economist, the reaction of traders will be to raise prices preventively. "The reaction of traders would be such that by October we would expect much faster price increases before the draconian measures envisaged by the latest changes to the law come into force", he predicted.
Ganev explained that traders will take insurance for fear of violating the new regulations. "Because they will want to take insurance that later, if they decide to raise a price, a bat will come to them", the economist pointed out.
He also warned of a second wave of price increases. "In a year, because the law will be in effect for a year, there will be a new price shock", Ganev said.
In his words, an economically justified price is the one at which you can sell. "There is no market logic in the changes to the Euro Law! If prices are rising, it is because of this law, and not because of anything else," the economist is categorical.
In the same interview, Ganev also sharply commented on the government-created state-owned company "Shops for the People." "It is impossible to open even a small shop for 10 million leva. This is the capital of this company," he said.
According to the economist, the funds will be spent only on salaries. "This capital will serve to pay salaries for several years, until it closes, to some people who were hired yesterday. This is what the whole story with this great "Shop for the People" looks like," Ganev pointed out.
Last week, the government approved the creation of a sole proprietorship with a state participation in the capital of 10 million leva. The headquarters of "Shop for the People" is in Sofia, owned by the Ministry of Agriculture and Food.
The first store in the chain is expected to open in September in the Plovdiv region. The goal is to sell Bulgarian products with a minimal markup.