The shadow of the debt spiral is haunting us. This was said in the program "From the Day" on BNT by the member of the Governing Council of the Bulgarian National Bank Lyubomir Karimanski, quoted by novini.bg.
Everyone is worried about the government's financial policy, in particular, how expenses are growing at a very fast pace, and on the other hand we are generating debt at a much faster rate than countries like Greece and Croatia. What we generate in the expenditure side in the public sector is dangerous, said Karimanski.
The expenditure side in the public sector is increasing many times over the previous decades. This is worrying because through the budget we cannot impose any restrictive measures to prevent these expenses from growing procyclically. This procyclicality increases the entire cost of living in the public sector. The average salary in the private sector lags behind the average salary in the public sector, he added.
We must be realistic about revenues and learn our lessons that we cannot bet unrealistic revenues on the budget, especially from VAT and taxes in general. We must realize that there is no way to cover the expenditure part through accounting tricks and always make the deficit 3%, the member of the BNB Governing Council pointed out.
In his words, there must be a comprehensive reform in the pension system in order to make it possible to reduce transfers from the state budget to the system.
According to him, the maximum social security income should not be abolished suddenly, but step by step., with prior attention to expenditure policy.
Taxes must be adjusted where they are not working effectively at the moment. There needs to be a comprehensive review of the tax system from the perspective of centralization and decentralization, noted Lyubomir Karimanski.
We must view entering the eurozone as an opportunity for our economy to transform towards more competitive products. The productivity of the public sector should also be more effective, Karimanski also said.