"Potential problems related to fiscal policy caused this political confusion. There is an awareness among some of the ruling party, certainly in the ranks of GERB, that it will be extremely difficult to make a budget with acceptable parameters - i.e. with a low deficit, without making less than desirable political decisions".
This was explained to the Bulgarian National Radio by Lachezar Bogdanov, chief economist at the Institute for Market Economics.
The first budget in euros must be submitted by the end of October.
"The Public Finance Act has a deadline for submitting a draft law from the Council of Ministers to the National Assembly, and it is October 31. Before that, there must be a discussion in the Council for Tripartite Cooperation. It is usually uploaded for a few days and for public discussion. Tax laws are adopted before the budget.
So far, we do not have such bills, which makes us think that there is still no agreement on the main parameters of fiscal policy for next year.
The IMF indicated last month that the country is heading towards a serious expansion of the deficit if it does not make some changes, explained Lachezar Bogdanov on the program "Nedelya 150".
"The earlier measures are taken for fiscal consolidation, more reasonable spending and a smaller deficit, the less painful they will be. If they play with postponement now, the price will come perhaps next year. The question again is who will be to blame. A way is being sought for everyone to be on board so that, if a problem arises, they cannot blame each other for causing it, and that right before the presidential elections.
The economy is developing more or less well this year, we have a fairly good implementation of the revenue side of the budget. The problem is in the expenditure side.
For next year, there will have to be a prioritization of spending. But this has a certain political price. However, there is such a price in the other option - if you bring the country to an excessive deficit and debt crisis, then the fate of Zhan Videnov awaits you. The third option is to raise taxes, which is contrary to the election promises.
The increase in salaries in the public sector over the past six years is the highest in the entire EU. The question is whether the fiscal system can withstand this outpacing growth for a long time. In my opinion, no, it will lead to a budget crisis. Something needs to change in this trajectory".
There are two things that perhaps someone has misled politicians about, the economist also noted.
"One is that when you enter the eurozone and do not have a Currency Board, you can spend as much as you want. This is not the case. The ability to borrow is not unlimited in order to be able to spend.
The second thing that should be clear is that if you enter an excessive deficit procedure, there are real consequences. One of them is that there is a risk of freezing access to EU funds.
There are very real threats if you disrupt budgetary stability, regardless of whether in the first or second year after joining the eurozone.
There is a serious risk for next year if something does not change in the current trajectory. Either taxes should be raised or spending should be limited. We are not cutting, we are simply growing more slowly. It is also important that the country has a good business and investment climate.
These things are certainly known in the Ministry of Finance and by the economists in the ruling majority. They should lead to some political solution in order to arrive at reasonable budget planning for next year".
He described the possible scenarios under which things could develop.
"One is for someone to throw in the towel and say that they will not take any more responsibility. If we enter a budget crisis, the responsibility will be blurred. The problem is thrown forward and it is not clear to whom.
The other option is some consolidation of the government and a clear account of what to do. Then there will be solutions that will not be popular.
I don't think there is any reason for them to commit ritual suicide and plunge the country into a severe debt and budget crisis or to sharply raise taxes this year, instead of taking a more reasonable approach and sharing responsibility for some unpopular measures.
We are in a situation where there can be more reasonable budget planning, without imposing serious savings and sacrifices, but if adjustments are not made now, in two years there will have to be major ones. It is better to have a little pain and reason now than in two years - a very serious problem and debt crisis.