Krasimir Valchev: Situation suggests that the PB should take steps towards a sensible budget policy

The situation we are in right now suggests that "Progress Bulgaria" should take steps towards returning Bulgaria to the path of a sensible budget policy. This was stated in the program "Bulgaria, Europe and the World in Focus" with host Tsonya Sabcheva on Radio FOKUS by the GERB-SDF MP and former Minister of Education Krasimir Valchev.

According to him, the country abandoned this model five years ago.

"From 1997 to 2020 – with 2020 being an exception due to COVID – Bulgaria had a prudent budget policy, which included balanced budgets, development spending and maintaining a low tax burden,“ he said.

According to him, the change in this approach occurred with the arrival of Assen Vassilev at the head of the finance ministry.

"Then Assen Vassilev came, called this policy "the policy of stable poverty" and said that we could spend more, but he did not say that sooner or later this would lead to debts and the need to increase taxes,“ Valchev.

He emphasized that according to the party, Bulgaria should return to a policy of balanced budgets, limiting state debt and maintaining a low tax burden as the basis for long-term financial stability.

According to him, budget policy has three main characteristics – the budget deficit, the tax burden and the way in which public spending is distributed.

"One is whether you spend more than you collect. In recent years, we have been spending more than we collect. This leads to inflation and a decrease in competitiveness“, he said.

According to him, the deterioration of the current account of the balance of payments is an indicator of the weakening of the competitiveness of the economy.

According to him, the positive news is that the government is not proposing a significant increase in the tax and social security burden. "The government is not proposing an increase in the social security burden as a whole, with a few exceptions - increasing the maximum social security income, and this is the good news“, said Valchev.

The MP criticized the structure of spending in the draft budget. According to him, funds are being limited in sectors with a long-term effect on the economy.

"What we see is that the government will save on education and development spending. These are the expenses that form the potential for growth and have the highest public return", he commented.

At the same time, according to Krasimir Valchev, not enough actions are being taken to optimize expenses where there are doubts about inefficiency. As an example, he pointed to the TELK system.

"These are the expenses with the largest increase in the last five years - 12 times. You know the suspicions of abuse there, the fact that the TELKs themselves are an assessment of a diagnosis, not of functionality", he said.

According to him, the government is avoiding more serious reforms. "Obviously, the government will follow the path of least resistance and refuse to take more decisive action", he added.

Valchev admitted that all departments in recent years bear their responsibility for the state of public finances.

"Everyone in the last five years can be blamed for the state of the state. We from GERB are also jointly responsible for budget policy", he said.

According to him, in recent years there has been a lack of sufficiently strong control over fiscal policy.

"The Minister of Finance is the center of fiscal responsibility and fiscal reason. Unfortunately, we have not had one for at least three years", he commented.