Money against money. State against banks, and now also governor against finance minister. At the center of the dispute is the tax on excess profit.
The state wants more revenue, banks warn of the consequences on lending.
One word is especially important - interest. Because when the state takes more, someone can pay more. Against this background, economist Georgi Ganev commented on the program "Denyat ON AIR" the dispute over tax, loans, interest rates and relations between institutions.
"When finance ministers start wagging their fingers and adopting a harsh tone towards central banks, I get extremely nervous, because for me this is a signal that something is wrong somewhere. In this case, these are the desperate attempts of the authorities to seek more revenue", said Ganev.
According to him, foreign-owned banks will gradually direct fewer resources to Bulgaria. This, he said, will automatically mean fewer resources available for lending to Bulgarian companies and households in the long run. Ganev points out that such a development would lead to an increase in the price of credit. The big question, however, is to what extent this will happen.
The economist also questions the very concept of "excess profit", defining it as the arbitrariness of the government over the tax base.
According to Ganev, the entire profit of the banking sector by the end of August this year was 1.6 billion euros. He expects it to reach a little over 2 billion euros by the end of the year.
Ganev points to fuel companies and refineries as temporary cyclical winners, as well as various traders, resellers and sellers of fuel. "Normal profit is the profit that the market has given, that customers are willing to pay for. The concept of "excess" is meaningless, it cannot be measured and cannot be monitored", the economist told Bulgaria ON AIR.
According to him, defining a given profit as "excess" does not provide a clear measurable criterion by which it can be monitored.
Ganev also commented on the situation with fuel prices and the impact of the war on the market.
"It would be best if this stupid war ended. Unfortunately, such prospects are not visible. The other option that could push prices down is increasing supply by releasing some reserves." Ganev warns that the option of a diesel shortage cannot be ruled out. Therefore, it is necessary to think in advance about what policies can be taken in the event of such a development.
Over the past 10 days, prices have fallen, but according to Ganev, the values remain extremely unpleasant for Bulgarian households and companies.