Банкеръ Weekly



POLITICAL PARTIES PLATFORMS LOOK LIKE WRITTEN ON CARBON PAPER, EXPERTS SAYAre the politicians who apply for authority aware that June 25 is not the starting date for a new economic era? Do they know that the clock is ticking and the time for political rhetoric is passing? Reading electioneering programs of political parties is boring as a rule. Not only because they contain general phrases, cliches, and tricks for naive people. The main reason is they are short of realism and concrete measures in the respective fields.For example, countries with developed economies spend a lot of time thinking over their gigantic steps towards lower taxes, coordinating them with those concerned, and calculating the potential effects. On the other hand, changes in the fiscal area in Bulgaria come as a political surprise, as a gift from the rulers. That's why promises given in a hurry usually don't come true. Still, they are made after pattern and brim over with generosityThe 2005 elections campaign of the politicians is not an exception.Raising the slogan One for all and all for one, the Coalition for Bulgaria announced its Ten Commitments for Socially Responsible Ruling. The left wing forecasts an income growth by 2009, with the lowest working salary in the public sector reaching BGN270 and the average one - BGN600. Its members also promise that the working salaries in the budget sphere register one 20% increase from January 1, 2006. One of the main goals of the Bulgarian Socialist Party (BSP) is to achieve accelerated economic growth - from 6% in 2006 to 8% in 2009. The high spot in the tax policy is a zero rate for reinvested profit. Privatisation revenues are planned to be added to an investment fund that will provide an increase of the pensions.The alchemists from the red front are also considering to open at least 240,000 new jobs which will result in reducing the unemployment rate below 10 per cent. Education financing is planned to grow and reach 5.8% of the gross domestic product (GDP) by 2009. Support for the healthcare sector is expected to grow up to 6% of the GDP.Moreover, the BSP commits that the State will take up part of the household credits of young families if they already have two children during their first five years of marriage. In its platform the Coalition for Bulgaria confirms its position to immediately withdraw the Bulgarian contingent from Iraq after it wins the elections.The National Movement Simeon II (NMSII) declared Strong Economy, High Income, Safety for Everyone as its motto and generously predicted that the average working salary in the country would reach BGN500 by the end of the next mandate. The party led by Simeon Saxe-Coburg-Gotha plans an unemployment rate below 10%, an 8% growth of the GDP, and investments amounting to EUR6.3BN, by 2009.The financial experts in PM Simeon's team promise that the principles of flat tax will be introduced for incomes of individuals and the taxation scales will be reduced to three: 0, 9 and 19 per cent. The party's other commitment in this aspect is to reduce the pension insurance instalments by 3 to 5 points. Besides, NMSII proposes, up to 10% of the insurance payments to be transferred to private pension companies on the people's personal accounts. That's how the yellow pensions will reach 75% of the working salary. The money for retirement will grow further due to the establishment of a special Silver Fund, which will be supplied by revenues from privatisation deals, licence fees, budget surpluses, and the fiscal reserve.In case of winning a next ruling mandate, the NMSII promises to make EUR2BN investments in the communications sector. The money will be invested in the creation of new generation services on the mobile communications market by the end of 2006 and in the introduction of broadband INTERNET in schools and universities.The national cadastre in the agriculture will be completed and the regional and sector consolidation will be stimulated. In the healthcare sector, mobile medical aid teams will be provided for not so easily accessible mountain areas.Bulgaria - This Is You!, the United Democratic Forces (UDF) claim in their platform. They promise an 8 to 10% annual economic growth, reduction of the unemployment rate to 8%, and a real increase of the incomes by 10% a year. According to the UDF plans, the State will withdraw from the economy by reducing the redistribution through the budget to 30-35% of the GDP. That will be achieved when the State gets relieved from activities that are not typical for it in the field of transport, energy, central heating, water supply, and communications, and from the management of property. It will be occupied with jurisdiction, security, defence and foreign affairs. Thanks to the policy of economic non-interventionon the part of UDF, the business will have additionally in its hands at least BGN2BN each year for investments and opening of new working positions. Moreover, the VAT will be reduced to 18% under UDF's ruling, the personal income tax will be cut down by 5% on average, and the corporate tax - by up to 10 per cent. The 7% tax on dividends will be eliminated as well. The main trump-card in UDF's pre-election platform is the modernization of education, in which 5-6% of GDP will be invested. The party led by Nadezhda Mihailova swears it will work for calling a Grand National Assembly, which should adopt the necessary constitutional amendments and after that dissolve itself once and for all. Ivan Kostov's heavy artillery is to reach an average monthly wage of BGN600 and an average pension of BGN300. Under the motto For Strong Bulgaria in Unified Europe, Democrats for Strong Bulgaria (DSB) are promising to create conditions for personal prosperity, quick increase of incomes, and 7-8% annual economic growth. That will be achieved through a reduction of the total tax and insurance burden by at least 15%, a cut-down of the number and levels in the scale for taxation of incomes, and a decrease of VAT from 20 to 18 per cent. Moreover, DSB advance the thesis that the State should invest public funds mainly in infrastructure and they intend to eliminate the restrictions on private investments in sites of infrastructural importance. Under DSB's future ruling less than 35% of GDP will be redistributed and the expenses for bureaucratic administrative procedures will be drastically cut down. That will be achieved by maintaining strict fiscal discipline, elimination of administrative barriers in front of entrepreneurs, improvement of conditions for economic predictability, macroeconomic stability, and increase of investments. More money from the budget will be allocated for security and jurisdiction if the DSB take the helm of the state ruling. Ivan Kostov's party declares its resolution to carry out the judicial reform and pass amendments to the Constitution, connected with a reduction of the number of MPs and elimination of their immunity, a change in the structure of judicial power, appointment of the prosecutor general by Parliament, and abolition of the National Assembly. The Movement for Rights and Freedoms (MRF) sends to the electorate the message New Opportunities - New Quality of Life and stakes mainly on the continuation of harmonization of administrative regulations in Bulgarian agriculture with those in Europe with the idea of effective absorption of structural funds. MRF intends to stake on the technical renovation of the agriculture sectorand land consolidation, on the encouragement of medical herbs' growing and organic farming. In its pre-election programme MRF declares itself for integration of minorities - studying the mother tongue as a condition to maintain and develop their original culture. Development of politics for specific sectors of the economy is included in its programme, too. The intention is to make the leisure industry a priority and overcome the differences in the social and economic development of various regions in the country. An accent is laid on educational reforms and on the opportunities for Bulgarian youths to get a high educational qualification. Bulgarian People's Union (BPU) promises an average pension of BGN250 in its programme. The rightist coalition's priorities are light industry, tourism and promotion of Bulgarian construction abroadUnder the motto Bulgarians Deserve More BPU puts forward the ideas for the Bulgarian land, patriotism and revival of entrepreneurship. Maintenance of an 8% economic growth, a 3% budget deficit and an increase of the average working age to BGN680 by 2007 are projected. Moreover, BPU undertakes to reduce the trade deficit to 5% of GDP and unemployment - to 10 per cent.The medium-term target of Novoto Vreme is to reach some 8-9% economic growth on an annual basis and a reduction of unemployment to 8.5-9 per cent. The party's programme projects introduction of a flat tax rate on the incomes of natural persons and a reduction of VAT to 18 per cent. Novoto Vreme suggests that the Healthcare Ministry and the Ministry of Labour and Social Affairs should be placed under one and the same management, and an immediate structural integration of the General Staff into the Ministry of Defence. Another promise of the so-called hedgehogs is the completion of reforms in criminal law by November 2005. The adoption of a new Criminal Procedure Code should be a task of priority importance to the next Parliament.

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