Political instability creates certain concerns among foreign investors, as there is a lack of foreign investment. On the other hand, regular elections, even destabilizing ones, show a functioning democracy in the country. The way to attract large-scale foreign investment is to withdraw the state from extraneous activities and allow private investment to take over that role.
This was commented by Nikola Yankov, managing partner at "Expat Capital", in the Bloomberg Bulgaria studio.
Bulgaria is in a stable fiscal state, there is no problem with an excess deficit, with about 5 billion leva remaining possible to withdraw before reaching the limit of 48 billion, Yankov said. The state must have a buffer for unforeseen expenses. Currently, the fiscal reserve has BGN 6 billion, of which BGN 4 billion is blocked, which does not leave much room for maneuver if needed.
Usually in Bulgaria, in the absence of state funds, the rulers stop capital expenditures, which affects GDP growth and the small number of foreign investments. The guest explained that taking out debt for social policies is not a far-sighted policy, and more investment-oriented policies should be taken.
The official government is limited in its powers by the National Assembly, and its main task is to collect the revenue. Yankov suggests that the official cabinet will continue on the path to the Eurozone and the policies aimed at meeting the criteria. Our membership of the Eurozone depends on political will, and it is still possible to happen in 2025.
„I am worried that when we talk about political will, it has been lacking in Bulgaria lately. A report of the World Bank has come out, which says that Bulgaria may possibly join the Eurozone in 2026 or later.“
He called on the Cabinet to react to these reports and to state that Bulgaria has the ambitions and is working towards membership in 2025.
„The way to attract large-scale foreign investment is to withdraw the state from extraneous activities and allow private investment to take over this role. For example – the construction of the infrastructure in Bulgaria should be given to concessions. Bulgaria does not have the necessary infrastructure of a modern country, we lag behind our partners in Europe in this respect.
Bulgaria does not have the necessary financial reserves to quickly and qualitatively build it, however, this can be done if concession procedures are carried out. This way we will have highways, we will not have budget deficits and we will have quality built roads that are serviced by the concessionaires in the future and in this way we will not have corruption in the procurement.“
Nikola Yankov does not think that there should be a change in Bulgaria's tax system, although such calls were heard from the IMF and Kristalina Georgieva. He believes that a change to the flat tax and more taxation on businesses would push more companies into the gray sector. We must pursue the gray economy and seek an increase in the tax base, not the amount of taxes.