Shortage of social sphere funds in 2010 draft budget

published on 10/27/09 1:43 PM

Plamen Dimitrov: "Fiscal restrictions in the making are not in line with what other European countries are doing in this context."

Photo: BGNES

The experts from the Confederation of Independent Trade Unions in Bulgaria have drawn up a stand concerning the 2010 draft budget. According to the trade unions in the context of the global crisis Bulgaria is trying to distribute less financing through the national budget, a policy contrary to the practice in other EU countries. With budget austerity in the offing a range of activities in the social sphere are faced with shortage of funds. In trade union forecasts the spring of 2010 will see unemployment levels reaching 15-16%, given the current 8%. The trade unions however are convinced that there are ways to find enough cash for social sphere programs. CITUB Deputy Chairman Plamen Dimitrov says more:

“We still think that fiscal restrictions in the making are not in line with what other European countries are doing in this context. They are not synchronized with the World Bank recommendations either. In its May report the World Bank advises European countries to provide solid support for their social systems in a bid to prevent impoverishment and isolation of certain social groups. If the draft budget gets approved, this is what will happen to some categories of Bulgarians.”

CITUB experts think that adequate financing of social activities can become possible at the cost of a small budget deficit – not more than 1.5%, since Bulgaria cannot afford a larger one under the currency board arrangement introduced in the country in 1997. With a fiscal reserve worth close to EUR 4 billion, Bulgaria can afford spending 1 billion to fund the social sphere in 2010, the CITUB is convinced. In the draft budget however social benefits and compensations are funded with just EUR 400 million, while the needed amount is in fact EUR 600 million.

The shortage of funds is likely to affect pensions, sick leave and other payments, and eventually threaten the whole social system, trade unions fear. Budget 2010 envisages a more than twofold cut in funding of active policies on the labor market needed for the re-qualification of registered unemployed. Under such a budget the country might go back to 2003 when the jobless were 550,000, CITUB warned.

As far as the income policy is concerned, trade union experts disagree with putting the minimal monthly salary in the freeze at just EUR 120, as well as the salaries of those employed in the public sector. Both CITUB and Podkrepa Labor Confederation believe that the move of the government for cutting social security contributions by 2% from next year is good and is likely to encourage businesses to keep jobs. The measure of raising the monthly social security minimum from 130 to 210 euro has been hailed by the trade unions too, as a way to crack down on the gray economy. CITUB however suggests the introduction of further tax relief for supplementary social security contributions against unemployment and for qualification worth 5% of the income of every Bulgarian.

English version: Daniela Konstantinova

По публикацията работи: Milka Dimitrova

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