Two things have happened in recent days that contradict GERB's stated intentions for accelerated membership in the eurozone. What are the reasons for the illogical behavior of the "Zhelyazkov" cabinet?
Two things have happened in recent days that contradict GERB's stated intentions for accelerated membership in the eurozone. First, the "Zhelyazkov" government refused to request an extraordinary convergence report that would establish that we meet the inflation requirement for the common currency. Formally, the country deviates from the reference value by 0.1%, but only if no country with a lower than average inflation rate is excluded in its calculation. However, with each admission of a new member state, at least one country deviating from the general trends has always been excluded. So even now Bulgaria would meet the criterion if it were calculated on the basis of established practice. All experts agree that Bulgaria will meet the criterion without removing a country from the account within a month - i.e. the extraordinary report, if requested now, would take into account this trend, since its preparation would take at least about a month. Even more worrying is that Minister Petkova did not give a clear date for requesting the report - she tied it to the preparation of a draft budget and financial framework for the next three years. All things that are neither required for a new convergence report nor are they clearly located in time.
Secondly, GERB continues to spread the propaganda thesis about some "hole in the budget", which is now expanding, then shrinking. Now a deficit for January has been added to it, which is not clear whether it is part of it or complements it. The mythical hole also has a mathematical value - 18 billion, which comes from adding up all the cherished dreams of the ministries for spending during the year.
There is no "hole" in the budget or any real problem with it. Temenuzhka Petkova herself actually admits this, saying that she will solve the task by meeting the 3% budget deficit, without raising taxes, without taking additional loans and without reducing spending on salaries and pensions. Capital expenditures will also not be reduced compared to previous levels, but they will not increase by as much as they have requested in the relevant departments. If all this is true, there is simply no problem with the budget. And Petkova is considering even maintaining certain financial privileges - such as the unjustified tax relief for restaurants and bakeries, as well as the drastic increase in salaries in the Ministry of Internal Affairs and the services. With the entry into Schengen, you see, their work has increased, and so far they have worked less.
If all this is true, the consequence is that there is simply no problem with the budget, but unreasonably inflated expenses by individual ministries must be reduced - a routine, not heroic job for a finance minister. The question then is why GERB is so elegiac-heroic about the budget and beats the drum about non-existent problems. After all, this drumbeat is heard in Brussels and Frankfurt, and there someone may wonder what is happening in Bulgaria. In any case, this is strange behavior for a minister who wants to accelerate the country's membership in the eurozone or strengthen trust in it.
The explanations for GERB's illogical behavior are the following:
The simplest thing is that the beating of the drum is aimed at accumulating some political points against PP-DB. To spin the (easily refuted) argument that the budgets "of Assen Vassilev" are to blame for the problem. This "problem", as it became clear, does not exist. But even if it existed, it would be at least half a problem of GERB, who voted in parliament at least some of the budgets and burdened them with additional and unjustified expenses despite the will of Vassilev and PP-DB. But with media persistence and outright untruth, it can take on an almost credible appearance;
The second explanation is that signals have come from the EC and the ECB to postpone the convergence report by a month and GERB is trying to justify itself by blaming the delay on the PP-DB again. This explanation is half-hearted, however, because it is not clear why the country's finance minister is actively undermining confidence in financial policy by creating myths about a non-existent "hole";
The behavior of Petkova and GERB may be aimed at concealing and covering up an inconvenient fact: that in fact they will continue Asen Vassilev's policy of budgets that increase people's incomes - pensions and salaries. This will not be revised, and this is actually a rejection of Simeon Dyankov's "lean pizza" from 2009-2013. The new policy is better, but it also has one defect for GERB - the money goes to many people, not to selected companies at the end of the year;
Petkova's fiscal elegy may also be a message to GERB's clientele to lower their expectations for generous government orders according to the Borisov-Peevski model from the period 2016-2021. In fact, the inflated government spending in the budget submitted by the caretaker government is due precisely to such gifts for infrastructure projects and other needs of the administration, which will ultimately reach client networks. That is, the problem with the budget "hole" is a reality for GERB, because if such expenses are not committed, it will disappoint many of their business clients. But this is a problem for GERB, not the country – it will be a problem for the country if these expenses are nevertheless committed;
The worst explanation for Bulgaria's strange behavior of GERB is that their coalition partners are threatening to overthrow the government if it boldly and decisively moves towards the eurozone. This option, alas, cannot be ruled out, despite the text of the governing agreement. Therefore, a coalition with PP-DB was theoretically a better option for the country, but it turned out to be impossible due to GERB's unwillingness to at least verbally isolate Peevski from the government.
Explanations 3, 4 and 5 are quite logical and the onus is on GERB to reject them. Borisov's departure across the country is also strange in view of the urgent task of entering the eurozone. Unless he convinces people village by village of the correctness of his strategic choice. Whether that will be the case remains to be seen. Interesting months await us, in which both the euro and the Atlanticism in the Euro-Atlanticism of our politicians will be tested.
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This comment expresses the author's personal opinion and may not coincide with the positions of the Bulgarian editorial office and the State Gazette as a whole.