The “Anti-Speculation” Law aims to prevent speculative increases in the prices of basic food products and essential goods. It also gives the control institutions a tool to sanction violators. What else does it include… Maya Manolova, chairwoman of the civic platform “Stand Up.BG” speaks to FACTI.
- Ms. Manolova, was President Rumen Radev right that in the time before we officially adopt the euro, speculation could occur on the market and there could be price increases?
- We have been sounding the alarm for a year about people's fears about the rise in the cost of living. You can see for yourself that there is a continuous increase in the prices of basic food products and essential goods. For a year now, we have been saying that an “Anti-speculation“ Law is needed to calm people down and show them that the state is thinking about them, that it will not leave them to fend for themselves in the conditions of high inflation and serious impoverishment. So both President Radev and all responsible politicians have admitted that actions are needed by the state, through the control bodies, to stabilize prices and support people.
- You have submitted an “Anti-speculation“ law to the parliament. What do you aim for with it, what measures are envisaged so that there is no unjustified increase in prices?
- Bulgaria is currently the only country in the European Union that has absolutely no legislation, no regulatory documents that would effectively protect consumers against price increases. We - from “Izpravda se.BG“, we first conducted a legislative study on the experience of European countries. Including and especially those that are members of the eurozone, examining the periods before and after the adoption of the euro. What we found is that most of the countries have taken measures against price increases. We mostly applied the experience of Croatia – the last country to adopt the euro as its currency – in 2023. We got to know and borrowed from the work of the Croatian government and the decisions of the parliament there. In connection with joining the eurozone, they adopted a wide range of measures to protect consumers – from maximum prices and marginal surcharges, up to a ceiling on electricity and natural gas prices for households.
The “Antispeculation“ law that we propose is not some unique native Bulgarian option. On the contrary, this law builds on European experience and is a response to the need to protect Bulgarian citizens from the state.
- What are the measures you propose?
- We propose measures that have worked in various European countries - setting maximum prices, setting marginal mark-ups, an obligation to announce all prices on the online websites of traders, returning prices to a previous period, indicating the current price in a previous period on the label together with the current price, a ban on introducing new fees and increasing existing ones by banks and mobile operators. These measures relate to the sectors that are of greatest importance for the standard of living of Bulgarian citizens. In addition to basic food products and essential goods, we propose measures in the sectors of medicines, fuel, bank fees and commissions, mobile services, etc. We also left the possibility for the government, if uncontrolled price increases begin in other sectors, to be able to react immediately in order to protect consumers.
- One of the things that was widely discussed in Croatia, when there was adopted the euro, was to have a ceiling on electricity and natural gas prices, because this affects everyone. How do you see it as a solution?
- From “Izpra se.BG“ we were once again the only ones who defended the citizens at the last open meeting of the KEVR, where the increases in electricity and heating prices were discussed. We were the only ones who, at the end of last year - in December, submitted a proposal to impose a moratorium on the prices of electricity, heating, natural gas and water. Unfortunately, within the regulatory period, which begins on July 1 and ends on June 30 next year, the price of electricity was increased twice - completely unprecedented. From January 1 of this year, in the middle of the heating season, the KEVR adopted a decision that increases the price of electricity by 9% due to the justification of higher consumption - despite the significantly warmer than the previous winter.
Now the regulator is misleading citizens that the price increase from July 1 will be only 5%.
The real increase is 14%, because within a year we have two increases. During the public discussion, the KEWR said that the increase is 6.5% on average according to some mathematical system of theirs, after they spread it over the entire regulatory period. This is simply absurd. It is elementary - once you have a 9% increase, and now there will be a second one of 5%. So the electricity bill from August 1 will be plus 14%. No matter how they add it, no matter how they subtract it. The bad thing is that it is already too late to take any measures to combat this increase in electricity. Moreover, according to Bulgarian legislation, the only ones who can appeal the KEWR decisions to increase the price of electricity, heating, water and natural gas are the companies themselves. They, of course, have no interest in doing this, after their demands for high prices are met. The prosecutor's office can also intervene here, because we have already notified them before, and they have filed such complaints and have won cases regarding the increase in the price of water.
The situation is similar with heating, which is increasing in price by 5% from July 1. Although since 2023 the price of natural gas has fallen by 25%, carbon emissions by 20% (together they represent 70% of the cost of heat production), and inflation for 2 years is 5%. However, instead of KEVR reducing the price of heating and hot water, they are increasing it by 5%.
- Another serious issue is fuels. What do you expect with them?
- Fuels are also one of the main problems and this was seen after their avalanche-like increase in price in Croatia upon entering the eurozone. There they made it so that every two weeks the cabinet determines the maximum price of fuels by a formula. In our draft of the "Anti-speculation" Law, we reproduce this formula, which is the average stock exchange price for the last two weeks plus a surcharge of 10 euro cents (in our country now - 20 stotinki). In the law, we leave it to the government to decide what the surcharges at gas stations should be. We simply introduce a rule that fuels for a period of six months before and one year after the adoption of the euro should be regulated by maximum prices. With regard to basic food products, because we are witnessing the dispute between the institutions about how much inflation is and what the consumer price index is, that even for April there was a decrease in price of -0.8% according to the NSI, we want strict monitoring. We see that prices in the food chains are going up, and that is why we are introducing an obligation for the government to determine a list of basic food products and essential goods every 3 months, which will have maximum prices.
When Croatia adopted the euro, there were 70 basic food products with maximum prices, plus non-food essential goods.
So we are proposing a set of measures as a toolkit for the executive branch, but also for the control bodies, so that they can really be kept under control and prices can be brought under control. So far, we are witnessing understanding and serious activity on the part of the CPC, CZP, NRA and CRC. But we are also aware that despite their threats, prices are actually going up. NRA commented that a product has increased in price by 40%, but what can it do at the moment? It can be checked whether they have paid their taxes on this increase. What else will they do? However, if there are marginal mark-ups, as we propose, and someone does not comply with them, then the sanctions are already large - 3% of turnover, and in case of a repeated violation, already 7%. In addition, in the name of publicity and transparency, we propose introducing a “black list“ - “wall of shame“, where all companies that violate pricing and speculative price inflation would be entered. This would be good for citizens to know which companies are trying to rip them off.
- You also launched a platform Antispekula.bg. What information can it provide to people?
- It is extremely important that this “Antispeculation “ Law is quickly adopted by the Bulgarian Parliament. BSP and MECH signed it, and the other parliamentary parties are currently considering it. I hope that after they make their comments, they will also sign it. It is right for MPs from all parties to stand behind this law to show that institutions can unite and protect citizens. The most justified fear for people right now is how they will cover their basic expenses. So our hope is that this law will be introduced, supported and adopted with consensus by all parties.
In addition to this parliamentary support, we also offer another parallel line – through the “Antispekula.bg“ application. It is a mobile application,
through which every citizen can participate in the “civil patrol“ and monitor prices in stores, pharmacies, gas stations, banks, etc.
Any user can take a photo of an irregularity, unfair trade practice or inflated price and file a report with a single click of a button – within seconds. We already have a lot of reports, but it would be good if people who file reports leave their email address so that they can later receive a response from the institutions, because we will forward their reports, guaranteeing the complete anonymity of the person who submitted them. So let people get acquainted with the application and join the citizen monitoring. Let citizens really show what the situation is in the food and non-food trade, fuel, banks, mobile services, medicines, etc. sector. Let us really make the institutions take action by arming them with tools to prevent speculation.