The European Commission has compiled a grey list containing 12 countries from the European Union that are considered to be the most vulnerable in terms of macroeconomic and social factors. In other words, the indicators on certain parameters are seen by Brussels as borderline and potentially risky for the economic stability of the EU. The countries on this list are subject to special monitoring by the European Commission. According to Brussels, the economic state of these countries needs a further analysis in order to assess the risks that each country is faced with. Ten key economic indicators are used, with the goal of the EC being to come out with recommendations to each of the countries on concrete measures and actions in their respective economies. This is a new procedure in Brussels for early warning in the event of macroeconomic unbalance in EU members.
Bulgaria is one of the countries included in this list of 12 EU member states. The rest are Belgium, UK, Denmark, Finland, France, Italy, Hungary, Spain, Sweden, Slovenia, and Cyprus.
The European Commission has also compiled a “black list” of those EU countries most threatened by economic concussions. These are Greece, Ireland, Portugal, and Romania. These countries will be analyzed via special programs for stabilizing of their economies and they will receive financial assistance under EU and IMF programs. The remaining 11 countries do not need to change their economic policy for the time being.
The Bulgarian Finance Ministry has reacted sharply to this assessment from Brussels and has distributed a document with Bulgaria’s macroeconomic indicators. According to the Finance Ministry, these are within the framework of the EU requirements whereas the data included in the analyses of Brussels are outdated and do not take into consideration the most recent developments in this country.
Why has the EC placed Bulgaria on the list of countries with economic risk?
One of the reasons to be on the grey list is the high deficit in 2008, but it has not been taken into account that last year Bulgaria has seen a significant surplus. This is one of Brussel’s criteria. According to data of the Bulgarian Central Bank, the country’s budget has a positive balance of 1.15 billion euro.
How have these calculations been made?
The data from the National Statistical Institute shows that Bulgaria has rather high revenues from the European funds and from money transfers made by Bulgarians living abroad. Thus, the total balance shows that in 2011 we have a serious surplus. The European experts however have shown us in an unfavorable light as they have based their analysis on data from 2008, 2009, and 2010.
What is more, Bulgaria is the second countries in EU with the lowest state debt for the third quarter of 2011. And this is data from Eurostat, not from Bulgarian statistical agencies. So, under the criterion of “public debt as a percentage of the GDP”, Bulgaria should not be on the grey list of Brussels. The other indicators related to the debt of the private sector as a percentage of the GDP also sound unconvincing for Bulgaria since EU experts have not considered a tiny detail: and namely that the debt of the private sector is based mainly on the indebtedness between foreign companies and their subsidiaries in Bulgaria.
As a conclusion, the analysis of Brussels on Bulgaria is based on mechanically compiled outdated figures without taking into account the economic trends and policies of the country over the past year. Thus, the report of Brussels that places Bulgaria in this grey list also casts a dark shadow on the country’s reputation. And this could lead to unfavorable economic developments.
Translated by: Rossitsa Petcova
