Bulgaria’s support for increased payments to next EU budget: interpretations

Vladislav goranov (left) and Gunter Oettinger
Photo: BGNES

Some people might have been surprised as Finance Minister Vladislav Goranov declared these days during a Sofia-held European meeting on the Multiannual Financial Framework post 2020 that Bulgaria was ready to uphold increased payments to the EU budget. Minister Goranov said that a 10% increase of the current budget was achievable and acceptable for Bulgaria.

In fact the statement of Goranov is not a surprise, but testifies on dynamic development of Sofia’s stance on the issue. In early February the financial ministry refuted allegations that Bulgaria agreed on payments increased up to 1.1% of Gross National Income for member-states, to be introduced ensuing Britain’s exit from the EU. In the end of February PM Borissov said that a raise of that kind would be profitable for Bulgaria. Over the first ten days of March the financial minister only added that this understanding was due to the will for the cohesion and agricultural policies of the EU to be kept up. Obviously, Sofia’s position on the issue is not unconditional and we could expect that in the coming months Bulgaria to act, led by that argument, including in its capacity of rotational presiding country of the Council of the EU.

Sofia formed its stance in the second month after taking over the rotational presidency and at a moment when the community members are parted on this matter. Austria for instance opposes the increased payments and insists on the cutting of several programs, mostly related to payments for the Eastern European countries. At the same time the Baltic States support the idea for increased installments after 2020. The EC is expected to make an official proposal for the Multiannual Financial Framework in May. Until then the problem will be tackled on different levels and formats. According to the Borissov cabinet currently all options for overcoming the Brexit challenge are open and the major goal of the Bulgarian Presidency should be smooth negotiations on the EU budget.

In this regard Foreign Minister Ekaterina Zaharieva commented that according to the Bulgarian government the determining of the priorities and policies to be funded was essential prior to the clarification of the EU budget’s size. The forthcoming Brexit and 2019 European polls make the preparation of the Multiannual Financial Framework look harder than ever. The Bulgarian Presidency of the Council will try to provide balance between the new policies on security, migration and innovation issues and the traditional EU policies within this quite complicated situation.

Great Britain’s leavin the EU will open this gap of some 12% in the funding of the member-states to the budget, as the country is among the largest net contributors. EU Budget Commissioner Guenther Oettinger has recently offered the new expenses of the EU, evaluated to some EUR 10 bln. per year to be covered 20% via economies and 80% via fresh money. Mr. Oettinger himself offered before, that the missing EUR 13 bln. per year after Brexit to be provided 50% per expense shrinking and 50% via additional payments on the part of member-states. The 50/50 balance would be much more negative for Bulgaria, experts say. At the moment for each euro Bulgaria gives to the European budget, Brussels reimburses some six and any cut of the European subsidies will be seriously felt.

According to Financial Minister Vladislav Goranov the eventual restriction of the cohesion policy and its focusing on the poorest regions will only reduce the interest of the big countries towards it. It is a risk to the cohesion policy itself. The forthcoming months will reveal the balance that will be achieved between all these complicated ideas. Today Minister Goranov is optimistic that the EU is in an economic upturn with this improving situation on the labor market and funding. In his opinion the challenges will be overcome within this situation with moderate and constructive political ambition. Thus an overall financial stability will be guaranteed and long-term growth of economy, employment and incomes will be achieved.

English version: Zhivko Stanchev 

More from category

Brussels removes Bulgaria from excessive macroeconomic imbalances categories, high growth of GDP expected

Last week Bulgaria was taken out of the EU ‘black list’ of states with excessive economic imbalances and the Central Bank announced preliminary data on the GDP growth in 2017. Obviously the first event is positive, while the second only..

published on 3/12/18 2:38 PM
The until recently almost unknown company Inercom and owner Ginka Varbakova’s participation in the deal with CEZ-Bulgaria puts forth many questions.

CEZ Bulgaria: True privatization or forced renationalization?

The electricity distribution in Bulgaria is in the hands of private foreign companies. The Czech state-owned company CEZ is the largest foreign company distributing power to over 3 million Bulgarians in Western Bulgaria, including the capital..

published on 3/6/18 1:46 PM

27-year-old Bulgarian places in Forbes’ Social Entrepreneurs rankings

A young Bulgarian decided that he liked the idea of a better world through social entrepreneurship, helping people to solve their issues and make a career. For eighteen months now Alexander Naydenov has been making easier the scientific..

published on 3/1/18 2:31 PM