Calls for state spending to be distributed more efficiently rather than increased, and for the Bulgarian Government to avoid dipping deeply into the surplus because this would scare away foreign investors, were made as think-tank the Institute for Market Economics (IME) presented its "Alternative Budget" for Bulgaria in 2009.

At a news conference on November 23 2008, the IME's Dimitar Chobanov unveiled the Alternative Budget featuring a lowering of taxes. In times of crisis, expenses should be reduced and optimised, Chobanov said.

Other provisions proposed by the IME included  four key buffers against the crisis - a bigger reserve of 600 million leva, a five per cent cut in all budgetary expenditure, a surplus of three per cent of gross domestic product and an outlining of non-priority costs to be reduced, the online daily Dnevnik reported.

The IME proposed also a zero tax rate on reinvested profit, a cut to 10 per cent of the 15 per cent tax rate for sole proprietors, scrapping the five per cent dividend tax, and a reduction of the social security burden to 10 per cent from the current 33.7 per cent.

Chobanov said that additional spending by the Government to support unproductive enterprises and economic sectors would prolong the economic crisis. Measures such as these taken under pressure would be at the expense of all taxpayers, Bulgarian news agency BTA reported Chobanov as saying.

Bulgaria ranks bottom in the European Union in efficiency of public spending.

Georgi Angelov, senior economist at the Open Society Institute, told the news conference: "The Government is pushing its July budget surplus agenda of when the crisis was not as ugly. As a result, two global agencies lowered the country's rating".

Angelov said that Bulgaria could join Romania in the junk rating category if the Government did not tighten the purse strings, Dnevnik reported.