The topic of the week - aid from the state for business and consumers due to higher fuel prices and all the repercussions on our economy of the war in the Middle East. The official authorities announced that they will support the affected sectors with 100 million euros.
Where does the money come from and who will pay the price of this aid - the topic was commented on by economist and former Deputy Prime Minister and Minister of Economy Nikolay Vassilev.
„As a representative of Bulgarian business, because I also deal with this, I don't need such support from the state. Now, however, I will not speak for myself, but for millions of Bulgarian citizens. I am not a fan of what is happening. First, how many days or weeks does the government only deal with this and finally the mountain gives birth to a mouse.“
When asked whether the state should provide assistance, Vassilev replied:
„I don't think the state should do anything at all.“
Vassilev also recalled the historical context:
„There were times with a euro and 80 cents. I remember the very distant year 2008, when incomes were probably 4 times lower than now, and fuel was more expensive than now. And what happened? If, for example, fuel costs 3-4-5 euros for 6 months in a row, then the state should start giving out money. At the moment - nothing.“
When asked about the actions of the caretaker government, he said:
„The government, in my opinion, is in an election campaign and is participating in it. The last 5 years, with something like 7 caretaker governments and 3 short regular ones, these 5 years merge into one whole for me. In a general chaos. The state did not do much or almost nothing. We entered Schengen and the eurozone. Bravo! This is almost the only thing I remember.“
About the help for small businesses and compensations, he said:
“If there is single-digit inflation, as it has been so far, the government does not need to do anything. Caretaker governments are not reformers, they do almost nothing and basically hand out money, which is illegal. They should not deal with social policy and mass changes“.
Vassilev also explained how business can protect itself through financial instruments:
“Whoever buys oil, such as the refinery, the carriers and the rest, can buy futures, forwards or options. It means buying cheaper oil in advance. If prices reach $200, which I don't think they will, you've already bought cheap oil. That's what the government should have done.“
Regarding concerns about price increases for the end consumer, he added:
“All this is a storm in a teacup and an unnecessary waste of public energy on unimportant issues.“
“But you and I, until we retire, will the state pay for the electricity of the business? That is, in a market economy, the state will always pay the electricity bills. Why? If the new electricity price is the new normal, the private sector, if it likes, can adapt, reduce its electricity consumption, use a night tariff, and become more energy efficient,” he added.
In conclusion, Vassilev outlined the framework within which the state should intervene:
„First, the caretaker government should not deal with things that are none of its business. Nothing special has happened at the moment.“
And more:
„A surplus budget. The state should stop being a communist breadwinner, pay everything to everyone, create conditions for investments, economic growth, job creation, and wake up to demographic problems.“
Finally, regarding the business demands for more assistance, Vassilev said:
„I respect Bulgarian business and I am part of it. And I have always supported policies that protect business, but not these. Bulgaria is not a poor country. How do you run a business if the price of gasoline has gone up a little for a few weeks and you are already screaming that you will go bankrupt if someone doesn't pay you everything? What is this business?“