Банкеръ Weekly

Briefs

Adopted State Budget 2012 Resembles Time Bomb

Cosmetic increase of the minimum pension by 9 levs, freezing the child allowances below the poverty line and a 3.45-billion deficit will generate the budget of the State Social Security Institute (SSS) for 2013, adopted last week by the Parliament at second reading. Lawmakers from the ruling majority of GERB declined the fierce debates in plenary sessions to be directly broadcast on TV. And perhaps with good reason. Even those unfamiliar with the intricacies of insurance, unemployment and our social system would understand that before their very eyes a huge balloon is being created. It can soon burst and drag the country down.


In the language of statistics the revenue transfers to the consolidated budget of the social security come to 9.055 billion levs while expenses and other payments - reach 9.051 billion levs. The budget of the Fund Pensions expects a revenue and transfers in the amount of 5.82 billion levs, and almost the entire amount would have to come from social security contributions. Expenses are 7.53 billion lev, and for pensions will go 7.48 billion levs.


According to the Government's calculations, the social security system will end up with a deficit of 3.45 billion levs, 2 billion levs of which (the missing money for pensions) will be covered by a subsidy from the central budget. However, whether these calculations will be correct actually depend on a very optimistic forecast that the number of insured people is 2.77 million and the unemployment rate stays at 10.9 percent? Currently full-time insured are about 1.93 million, plus 190,000 self-insured. Thus, people with a full contribution to the pension system do not exceed 2.22 million. A recent Eurostat unemployment estimate at the end of the year warned of a 13% jobless rate. To implement the fairy-tale budget Finance Minister Simeon Dyankov will either have to repeat the economic miracle of Germany after World War II, or sink into debt.


Parliamentary opposition in the face of the leftist Coalition for Bulgaria proposed the social security budget to be increased by 700 million levs, from which pensions to go 221 million levs, and the rest to be invested in measures against unemployment and to support motherhood. The ruling majority, however, rejected the request.


Independent MP Georgi Terziiski proposed the lowest pension to be raised to 300 levs because the poverty threshold was raised to 214 levs. Pavel Shopov from the nationalist Ataka aksed for a minimum pension of 500 levs. Both proposals, of course, were not accepted. Instead minimum thresholds were increased for tobacco farmers and self-employed, which in this crisis are far from thriving.


The BANKER

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