The National Movement Simeon II (NMSII), a member of the tripartite ruling coalition, was discussing proposing a possible 15 to 20 per cent increase in pensions, NMSII MP Plamen Panayotov said on February 12.

Panayotov made the statement 10 days after the majority partner in the coalition, the Bulgarian Socialist Party, said that it wanted pensions to go up by 10 per cent as of July 1 as opposed to the previously agreed 8.5 per cent.

Panayotov said that the NMSII’s main concern was not the actual increase in pensions but the way that the BSP had announced its decision. As part of the coalition agreement between the BSP, NMSII and Movement for Rights and Freedoms (MRF), every party can make suggestions but these must first be discussed in the coalition council and only then announced to the public, a procedure that the BSP had not followed.

This had made the BSP’s promise to pensioners dependent on the NMSII and the MRF for its fulfilment, opening the BSP to accusations of populism.

Most Bulgarian pensioners receive pensions in the range of 85 leva to 100 leva. This meant that the BSP proposal for a 10 per cent increase would add only between 1.26 leva and 1.50 leva to their pensions, Panayotov said.

The MRF did not welcome the BSP proposal. Speaking on private Nova Televisia on February 11, Yordan Tsonev, an MRF MP and head of Parliament’s committee on the budget, said that it was too early to say if pensions could be increased.

“We are at the beginning of 2007 and we still do not know how spending is proceeding. By March or April we might have some view whether the budget could sustain an increase of more than the projected 8.5 per cent. We at the MRF support any increase as long as it is not as a result of inflation or other populist reasons,” Tsonev said. 

In an interview with Bulgarian-language daily Sega, Hasan Ademov, the chairperson of Parliament’s committee on social policy, said that increasing pensions would open the door to further demands, which would lead to higher spending from the budget, for which there was no revenue. He hinted that teachers and medics might also demand higher pay.

NMSII MP and former social policy minister Lydia Shouleva told Bulgarian-language 24 Chassa that the pension reform started seven years ago had not produced the expected results. “The principle of solidarity in social security has not become a reality and has not led to the desired end,” she said.

Another former social policy minister, Ivan Neikov, told Sega that the practice of using money from VAT to pay pensions was incorrect.

“VAT revenue partly comes from the pensioners themselves, who are the most compliant VAT payers. Furthermore, the practice undermines the autonomy of the National Social Security Institute (NSSI),” Neikov said.

The right-wing Democrats for a Strong Bulgaria said that because the BSP proposal would mean only an insignificant increase, from March 1 all pensions should be recalculated on the basis of the average income in Bulgaria. This would mean that the basis for pensions would go up and pensioners could receive an increase of up to 40 per cent.

According to NSSI data, the average income in December 2006 was 404 leva.