The Bulgarian Socialist Party (BSP), the majority partner in the current governing coalition, launched a raft of promises in its proposed social and economic programme unveiled on April 16.
The programme, released just a month before Bulgarias May 20 elections for the European Parliament, is meant to cover the next two years.
Predictably, given that older people make up a significant part of its electorate and that there has been a series of protests by pensioners, most of the BSPs promises were about higher pensions and improved benefits for public sector employees. Earnings in Bulgarias public sector should grow at least 10 per cent annually until 2009, and pensions should be increased by 10 per cent in 2007, according to the BSP programme. The BSP was careful not to name an exact date for an increase in pensions.
In early February, the BSP caused a lot of excitement within the ruling coalition it shares with the National Movement Simeon II (NMSII) and Movement for Rights and Freedoms (MRF), by proposing that pensions go up by 10 per cent as of July, even though the three parties had previously agreed on an 8.5 per cent increase.
It appeared that the regular protests held by groups of pensioners since February have had an effect on BSP thinking. With the other promises, BSP offered a timeline, starting at the the beginning of 2008. As of January next year, the minimum wage should be 200 leva, which means a 20 leva increase. Also the poverty line should be 170 leva. One of the most interesting promises is that public sector salaries increase annually by 10 per cent from July 1. Again the document did not say whether these salaries should increase this year or the next. The programme envisages that there should be part-time positions in every sector of Bulgarias economy without specifying any further what exactly this means.
Taxes were the other major point on April 16. A day before the deadline for submitting annual income tax declarations, the BSP promised to reduce taxes. If possible was the key word. Economy and Energy Minister and BSP deputy chair Roumen Ovcharov said that, if possible, the social and health insurance burden should be reduced to 20 per cent. Tax cuts for the lowest personal income groups are among other suggestions. According to the BSP, an income of one average salary should be taxed at 16 per cent while an income of two average salaries should be taxed at 20 per cent and the rest at 24 per cent. National Statistical Institute data show that for 2006 the average salary was 355 leva. On the basis of the BSP proposal, if this rises to 400 leva, people with low incomes will gain no more than five leva while people with higher incomes of up to 800 leva will gain from 23 leva to 25 leva.
According to Ovcharov, this, together with the increase in pensions, will cost Bulgaria between 300 million leva to 400 million leva annually.
Another promise was to reduce employment below eight per cent in 2008. Again the party did not say how it would achieve this. Eight turned to be the BSPs favourite number because the programme said that health insurance contribution rate should increase gradually to eight per cent. This however should not lead to an increase in the overall health and social insurance burden for the insured or their employers.
Currently, the health insurance contribution rate is six per cent and it still yet to be seen how the two per cent planned increase will not affect both employees and employers. Some light on the subject was shed by Health Minister Radoslav Gaidarski, who said that depending on the rate of the average salary, the rate go easily go up by two per cent. However this could mean that the ratio between salaries and health contributions could remain the same as the present. Gaidarski proposed that the BSP legitimise a negative process that has become a tradition in the countrys health care. At present, every hospital acts as a commercial company and gets its money from the National Health Insurance Fund (NHIF) depending on the number of patients treated. The NHIF, on the other hand, get its money from health insurance contributions. The system has proven inadequate for Bulgaria because the money given by the NHIF to hospitals is insufficient for their needs, and every year the state budget surplus is used to stave off hospitals going bankrupt. Although Gaidarski said that the principle of Bulgarian health care is money to follow the patient from what he suggested on April 16 it turns out that the BSPs principle is more like if you can beat them, then join them. Gaidarski simply suggested that hospitals be turned from commercial companies into public companies. That means that part of hospitals funding could come from the state or municipal budgets, as has been the case for years.
The BSP sent a strong message to male Bulgarians. The party proposed a 15-day paternity leave for fathers, and promotion of a two-child family model by increasing the one-time benefit for a first child from 200 leva to 250 leva and the benefit for a second child from 200 leva to 600 leva.
At the end the socialists put in a note for the countrys infrastructure. The programme said that two nuclear reactors at Belene would be built, as well the two oil pipelines, Bourgas-Alexandroupolis and Bourgas-Vlore. Another goal is to construct 130km of highways.
From the title of the programme one can assume that these goals should be achieved by 2009. Ovcharov himself described the programme as realistic, reasonable and feasible.
The BSPs programme made the first pages of most of the Bulgarian-language dailies. BSP eyes new term said Douma, a daily closely aligned to the BSP, said on April 16, a reference to parliamentary elections scheduled for 2009. BSP promises to increase incomes and reduce taxes, said Zemya, which also is close to the BSP.
Indeed the BSP promised a lot in its programme but there is one question that remains without an answer. Who will pay for all this and where the money will come from? According to BSP MP Yanaki Stoilov, some of the money could come from the grey sector of the economy. How BSP will find the 400 million leva remain unclear, but in general the programme follows the maxim: low taxes increased budget expenditures. By April 18, there had been no clear reaction from the NMSII and the MRF, without whom the BSP does not have a majority in Parliament. Without the support of the other two coalition partners, all the BSPs promises will remain no more than promises.
