Finance Minister Plamen Oresharski refused an increase in the minimum wage in 2007, as proposed by the Labour and Social Policy Ministry.

On June 20 Oresharski met Labour and Social Policy Minister Emilia Maslarova to discuss the income strategy for the period from 2007 to 2009.

One of the strategy suggestions was a 10 per cent annual increase of wages and a seven per cent increase of pensions, mediapool.bg said. According to the strategy the minimum wage will increase to 219 leva a month.

Oreshaski said that if the minimum monthly payment exceeded 170 leva, many companies will go bankrupt after Bulgaria's EU accession.

Plamen Dimitrov from KNSB labour union said that the strategy contradicted the agreement with the International Monetary Fund (IMF), which stated that the minimum wage should be 170 leva a month.

Employers objected to the Labour Ministry's concept that inflation should be a major factor in calculating the salary increase in the private sector.

Oresharski said that such formula would result in income decrease in the long-run. Similar process took place during the economic crisis from 1996 to 1997, Oresharski said.