The failure of the political class in the process for Bulgaria's accession to the Eurozone is categorical. Fornearly 10 years, we fulfilled all the accession criteria, especially the level of the budget deficit and the level of inflation.
This is the assessment of economic analyst Mihail Krastev, expressed to BNR.
"In the last 4 years, which were key for the fiscal policy, the last regular cabinet of GERB, as well as the following governments, conducted a fiscal policy that was pro-inflationary. Inflation levels in Bulgaria are high enough, so at this stage we cannot join the Eurozone," he predicted.
According to him, an attempt will be made to achieve a price stability mechanism by the end of 2024 with the aim of joining the Eurozone in 2025, "but this is an overwhelming task, because in the middle of the year it would cause tax chaos - in within the framework of the tax campaign to switch to currency conversion?".
"The realistic date for joining the Eurozone is January 2026, provided we meet all the criteria,", claims Mihail Krastev.
And he explained that he is not of the same opinion as the governor of the BNB and the Minister of Economy, who claim that Bulgaria can fulfill the conditions for joining the eurozone by the end of this year.
"The concerns are that we may be taking a back reporting period. If we want to join in the middle of 2025 or the beginning of 2026, we will look at the budget deficit not for 2023, but for 2024. And the budget for 2024, I will not name who it is supported by - more than 180 deputies , the absolute maximum of a budget deficit of 3% is set. We have defaults on the revenue part of the budget and, accordingly, fears that an excess deficit may be reached. "We are closer to an excessive deficit procedure by the EC than to meeting the criteria for joining the eurozone," the economic analyst warned.
And recommended:
"Bulgaria's fiscal policy must be conservative, without a deficit, one can even talk about surpluses, but not large ones. And large surpluses are not good because they show that the budget has not been considered properly. Pro-inflationary policies should not be pursued and consumption should not be subsidized."
The overpricing of bread described it as "it is schizophrenic to relieve the sector by canceling VAT and then to impose a surcharge": Apparently, in the heads of politicians, the economy becomes a politically controlled tool according to their moods. In this spirit, I would recommend them to nationalize the bakery industry and set their markup.
Krastev commented on pensions:
"The crisis with money for pensions is embedded in the model for pension insurance, which we cannot bypass, since we are a welfare state, but it is taking on an apocalyptic character because of the political decisions during these 4 years - shockingly increasing money for pensions. The budget of NOI for 2019 was about BGN 10 billion, and at the moment it is BGN 20 billion.
But Bulgarian pensioners have not become doubly rich, naturally because of inflation, which eats up these increases. We are getting to the point where 1% of the increase is calculated at over BGN 100 million. The budget swelled so much, without taking into account the real growth of the economy. And politicians are wondering how to get around something they created themselves."