Comment by Emilia Milcheva:
"Look me in the eye!". This is how Prime Minister Rosen Zhelyazkov addressed traders with an appeal not to make a fuss with prices before the introduction of the euro, and they look him honestly in the eye and are not particularly shocked, because they know that the state cannot interfere in pricing. Look, it can inspect and impose fines for other violations.
But when the Chairperson of the Consumer Protection Commission (CPC) Maria Filipova, a lawyer by education, declares that "we will not allow speculative price increases", she probably does not know that "speculation" does not exist in Bulgarian legislation. This does not prevent her from trumpeting in almost daily media appearances how the CPC employees are on the ground and will be punished mercilessly. Like Filipova, the chairman of another three-letter regulator - the Commission for the Protection of Competition (CPC) - Rosen Karadimov is also making noise about prices.
Can regulators fight "speculation"?
Neither of the two bodies, however, can prove that a price is "speculatively inflated". As long as they ask, they can establish and sanction other violations that "distort" the market, including prices - unfair and misleading commercial practices, cartel agreements, misleading advertisements. Here is the CPC starting a preliminary investigation into a cartel following a report from the Association of Industrial Capital in Bulgaria - for a drastic increase in fees for the utilization of electrical and electronic equipment, increased by over 800%, which will make the appliances more expensive. But this has nothing to do with the euro.
The chairwoman of the CPC claimed in an interview that the Law on the Introduction of the Euro gives her the right to issue orders to reduce prices - if they are unreasonably high. But in reality the law does not give her such authority. And not the CPC, but the Financial Supervision Commission will control whether during the period of dual circulation of the euro and leva, traders will not unreasonably increase prices (Art. 25, para. 5). However, the CPA can punish when the rules for currency conversion and rounding are not followed.
Are they looking at us honestly?
Is the state looking at Bulgarian citizens honestly when it assures them that its employees are on the ground, monitoring price dynamics and will seek answers if they turn out to be too high? For weeks, the chairmen of the regulators have been announcing that there will be sectoral analyses of the essential food market and inspections are being carried out in retail chains, small shops and restaurants. There are no answers so far.
Instead, the head of the National Revenue Agency Rumen Spetsov first announced that there was an increase in the prices of the 14 essential food products inspected from 5% to 40% in the period 3-17 June, and the next day - that it was not everywhere, but on a territorial basis. Did he do it to "serve" Peevski, in which he was suspected by "Yes, Bulgaria"? Or rather to scare people so that they do not notice that the Anti-Corruption Fund's revelations about the huge holding managed by energy boss Hristo Kovachki, have overtaken the NRA, which will first wait for the anti-corruption commission to check the documents distributed by the ACF.
According to Ivaylo Mirchev from DB Spetsov, who was appointed to the top of the NRA by the PP Finance Minister Asen Vassilev, "is starting to explain left and right how prices have skyrocketed so that next week Peevski can come out with the cape of the savior Superman and say that his stores will solve the price problems for the people." But the stores that were supposed to open in post offices and sell essential goods with a markup of up to 10% do not seem to be happening soon. Spetsov himself did not reveal which merchants raised prices, specifying that the highest was for specific brands of mineral water in 1.5 l packages - 40%, and cheese - 25%.
There are 50 types of mineral water on the market, said on BNR the member of the Fiscal Council Lyubomir Datsov, who advised the heads of the NRA, CPC and CZP to reduce their media appearances because they confuse people with their claims about speculative price increases. "It is not Mr. Spetsov's job to make such statements about inflation. His job is to see whether these higher prices have entered the budget as increased VAT, as well as what is happening in the energy sector (such as the huge debts of the companies associated with Kovachki - b.a.)", commented Datsov.
At the expense of the Bulgarian euro
Opponents of the euro have stepped up their rhetoric in the most sensitive area for citizens - food prices. Following the pro-Russian party "Vazrazhdane", President Radev publicly accused the government of manipulating inflation data and being helpless "in the face of unjustified price increases" - and on the day the EU Council on Economic and Financial Affairs unanimously supported Bulgaria's accession to the eurozone. As evidence, Radev referred to an article in the European edition of Politico, entitled: "Is Bulgaria manipulating inflation data to qualify for the euro?" The publication cites the daily rate for a hospital stay reduced from 5.80 leva to 1 leva as an example of a decrease in state-regulated prices. An anonymous government source and Prof. Steve Hanke - one of the prominent opponents of the euro, whom "Vazrazhdane" also uses, about the possibility of manipulated data.
The Ministry of Finance commented that they will not allow "any disinformation and rumors to undermine the authority of the institutions in Bulgaria". For May, inflation is zero, and the methodology does not include only data from the small consumer basket.
Political biographies, political parties, presidential candidate campaigns, early elections, attempts to inflate the prices of goods and services, and escalation of fears will still be written on the account of the Bulgarian euro. Having worked for a long time in the service of the powerful people of the day with nicknames, power and influence, the CPC and the CPC will have to convince the public that this time they will stand behind the citizens, not behind business interests. The Ministry of Interior will also be in the spotlight - will it be able to guarantee the security of people who will exchange levs at post offices, banks and the Bulgarian National Bank, without becoming a target for criminals?
The dual announcement of prices will begin on August 8, and the government will also rely on public control. But for this to happen, regulators must open up to citizens. Prime Minister Rosen Zhelyazkov warned that market players, whom he called "elementary robbers", will be "nipped in the bud". In a country with the largest share of the shadow economy in the EU - 34.6%, they are not elementary at all, but part of a well-oiled system of dependencies, with "umbrellas" and blindfolded control.
The transition to the euro is not an ordinary currency operation, but a stress test for the state - and a chance for citizens to get it back.