Bulgaria’s Cabinet has come up with an 82-step plan to take the economy from crisis to recovery, taking on board suggestions by business and labour – and vowing that its term of office will see the country adopting the common European currency, the euro.

The plan takes in 59 short-term measures to which a raft of anti-crisis and economic stimulus proposals put forward by employer associations and labour unions were added.
The measures are categorised into eight sections, including sustainability of the financial system, improvement of the business environment, improved infrastructure, stimulation of employment and social assistance, and efficiency in dealing with European Union funds.

The Cabinet said that sustainability of the macro-economic system meant the maintenance of a balanced Budget this year and a stepping-up of activities designed to get Bulgaria into the exchange rate mechanism (ERM-2), gateway to adoption of the euro.

Stability of the financial system, according to the plan, includes a reduction of wasteful state spending as well as mutual access of the information systems of the Customs and National Revenue Agency.

The plan foresees a campaign against tax loopholes and an intense effort against fiscal fraud, including tax evasion.

Other measures include a "mobilisation" of agricultural production.

Simeon Dyankov, Deputy Prime Minister and Finance Minister, said that the short-term economic measures would include detailed plans for infrastructure projects to be implemented, notably national road and social infrastructure but also including – for the first time – infrastructure projects in the environmental field.

With the short-term element of the plan seen as spanning nine months, the idea is to list those infrastructure projects that would be completed within this timeframe.
Other parts of the plan include stimulus of job creation, social welfare, a knowledge-based economy and better management of EU funds. Specifically, the plan envisages stamping out corruption in the use of EU funds.

The plan is to be forwarded to the National Assembly for debate, while two advisory boards are to be convened, to discuss pension reform and human resources skills planning. The plan is to be forwarded, in turn, to the European Commission.

Dyankov said that there was a disjuncture between supply and demand in Bulgaria’s labour market, and so the Government would take steps towards long-term policies on the issue.

At a September 15 meeting of the National Council for Tripartite Co-operation, which brings together government, business and labour, measures put forward included a unified national database at the National Employment Agency on supply of and demand for labour, including by publishing job vacancies while giving work-seekers the opportunity to list their vocational and professional qualifications, as well as compensation for lost income caused by reduced working hours.

A key element of the plan overall is an idea that has been mentioned frequently by Prime Minister Boiko Borissov’s ministers and that is a key issue for business people in Bulgaria, improved speed of reimbursement of value-added tax (VAT) payments.

Bulgarian media reports said that implementation of the speeded-up VAT repayments along with downsizing of the state administration were intended to take effect from September.

Other elements include, as reported by The Sofia Echo previously, a policy to discourage employment of non-EU citizens in fields such as construction.
Proposals also include increasing the minimum social security threshold to help the coffers of the National Social Security Institute and to increase the maximum benefits paid to employees of companies that have gone bankrupt.

As to euro zone entry, Dyankov told Reuters that he was optimistic that this could be achieved in the term of office of the current Government. The next scheduled elections for Parliament would be in 2013. Dyankov said that the Government was serious about implementing the reforms required to meet euro zone entry criteria. This would mean, mostly, Bulgaria substantially cutting its current account deficit, which has swelled in recent years.

Dyankov said that Bulgaria hoped to apply in November 2009 for admission to the ERM-2.

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