The extended budget with which Bulgaria enters the new year and the process of joining the eurozone is not a problem in itself, but the result of political decisions and a deficit of managerial vision.
This was stated by Lyubomir Datsov, a member of the Fiscal Council and former Deputy Minister of Finance, on BTV.
According to him, the law explicitly provides for the possibility of an extended budget and Bulgaria has serious experience with similar situations. "Other things being equal, it is better to have a regular budget, but when two projects are submitted that are difficult to define as normal budgets professionally, the extended option turns out to be the lesser evil", commented Datsov.
However, he criticized the way in which this extended budget was "modified in Bulgarian", including through increases in income in the public sector. According to him, the inflation used does not meet economic principles, since the inflation at the end of the year was taken into account, and not the average annual rate, as good practice requires. "In this area, all basic economic rules were violated", Datsov emphasized.
He also identified the allocation of funds to municipalities through the Bulgarian Development Bank (BDB), which, in his words, acted not as a credit institution, but as a disbursing agent on behalf of the state budget, as particularly problematic. "This has no practical logic and is of no use from the perspective of the deficit", he said, specifying that it is between 800 and 900 million leva.
According to Datsov, the big problem is not only in the budget, but in the overall political behavior and the lack of interest on the part of society. "People are not interested in the elections, nor in the party programs, nor in the budget. This leads to decisions that are economically inexplicable, for example, a deficit in a year with over 3% economic growth and overheating of the labor market," he said.
The former deputy minister warned that the ongoing budget deficits and political instability could turn into a real economic risk. He drew a parallel with the 1996-1997 crisis, emphasizing that although the situation today is not directly comparable due to Bulgaria's membership in the EU and the eurozone, similar trends in managerial behavior are noticeable. "History shows that even countries with low debt can default if trust is lost", Datsov warned.
In his words, public debt is often used as a political illusion. "Debt is deferred consumption. It allows politicians to mask their mistakes and pass the cost on to future generations," he said.
On the topic of the eurozone, Datsov stressed that it does not automatically make countries richer. "The eurozone provides opportunities, but everything depends on us, on the knowledge, will and courage to make reforms. If governance is bad, we can sleep through the positive effects," he said.
In conclusion, the economist called for a higher financial culture in society and for the introduction of systematic financial education in schools. "Everyone should know what credit, interest, budget and taxes are. "Ignorance always works in favor of those who want to take advantage of people," emphasized Lyubomir Datsov.