Prime Minister Sergei Stanishev and representatives of labour unions and business organisations signed a pact on economic and social development until 2007.

The pact was a social contract between the Cabinet and its partners listing priorities and policies for economic and social development, said Stanishev. These were going to aid Bulgaria's European integration and economic competitiveness, said he.

Representatives of various organisations said that the signing of the document showed the willingness of Bulgaria's government to accept the European social model.

Talks over the pact have been ongoing for more than six months, Bulgarian news agency BTA reported. Union representatives said that these negotiations led to balance of interest in the  approved version.

Union representatives said that the minimal monthly income should increase to 180 leva in 2007. Minimal income should reach at least 50 per cent of the average monthly salary, unions said.

Decrease in direct taxation, alleviated regulations, taxation stimuli for investors and development of human capital are among the priorities listed in the pact.

Social pension would reach 40 per cent of the poverty line and the minimal work pension would be half of the minimal monthly wage.

Union representatives said that next year health and social security burden should be distributed between employers and employees at a ratio of 65 to 35 per cent.