THE newly sworn-in socialist-led Government has appointed two men to shape its economic policy, Minister of Economy and Energy Rumen Ovcharov and Minister of Finance Plamen Oresharski.
The appointment’s effects are not clear, but both men have been known to adopt controversial positions in the past. 
As minister of energy and energy resources in Zhan Videnov’s socialist government, which brought the worst economic crisis of the transition period in 1995-1996, Ovcharov has never been considered much of a genius. His appointment to head the newly created Ministry of Economy and Energy comes as a surprise. Now he will have to display a talent for something more than just political rhetoric. 
Ovcharov has always been the strongest defender of the Bulgarian Socialist Party’s (BSP) more extreme ideas, such as opposing the early closure of units three and four of Kozlodui nuclear power plant, one of the conditions for Bulgaria’s European Union (EU) accession.
Now, he is facing the difficult task of committing to the reactors while keeping the country on track to join the EU on January 1 2007.  
Ovcharov will also have to shape a new face for the economy ministry, which has not actively participated in the country’s economic policy in past years, mostly focusing on dealing with the Privatisation Agency and issuing licenses.   
After four years as deputy finance minister in Ivan Kostov’s United Democratic Forces (UDF) government (1997-2001), Oresharski resigned after the National Movement Simeon II (NMSII) won elections four years ago in spite of former minister of finance Milen Velchev’s attempts to keep him. Oresharski’s nomination by the UDF for the Sofia mayoral election in 2003, which ended in a total fiasco, left many assuming he would quit politics. Oresharski made his comeback in July when he was included in the BSP’s first draft cabinet.
Oresharski, a professor of finance at the University of National and World Economy in Sofia, is considered a more conservative financial expert than Velchev. He was one of the strongest adversaries of the global bonds issued by the NMSII Government and claimed that they had lost the State half a billion euro.  
Velchev could respond with figures for foreign debt reduction and savings on Brady bond principals, which Bulgaria would be obliged to make if it had not swopped them. Oresharski would say that global bonds do not compensate the payment of principals, but simply delay it until 2013, when the State will have to pay 835.5 million euro in one lump sum on the first global bonds issue, which were used to replace the Brady bonds, and until 2015, when it will pay $1.3 billion on the second issue.
Oresharski also opposes differentiated value added tax (VAT) rates, the introduction of which was part of BSP’s election programme.
Differentiated VAT rates have never generated positive results, he has said, which is why the EU is working for the elimination of the differentiated VAT as of next year.
He has also said that he was ready to support the reduction of the current 20 per cent VAT rate.