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Bulgaria’s government takes emergency social and economic measures against coronavirus crisis

Photo: БГНЕС

The new state of emergency act adopted by Bulgaria’s National Assembly entered into force On Monday. On the same day this country’s government announced a package of emergency social and economic rescue measures to the tune of EUR 2.3 billion.

EUR 250 will be spent on healthcare and defense and allotted to the Bulgarian Ministry of Interior. The state authorities raised the capital of the state-owned Bulgarian Development Bank with EUR 250 million. Thus, it will guarantee loans extended to the local business amounting to nearly EUR 1 billion. Moreover, each person in unpaid leave will be able to borrow quick, interest-free consumer loans up to EUR 760 (1,500 BGN) if they keep their job and are not made redundant. The government will provide a total of EUR 100 million for this measure. Payments of corporate taxes will be delayed until the end of June which means that the state budget will lose during this period another EUR 300 million. The cabinet will again spend EUR 25 million on Easter bonuses for all Bulgarian pensioners whose pensions are below the poverty line.

The state will pay 60% of the salary of people employed in sectors affected by the ongoing coronavirus crisis, if they are not made redundant by their employers, Bulgaria’s Premier Boyko Borissov said at an extraordinary press conference on March 24 adding that this measure will cost hundreds of millions of Euros. The government is guided by the principle that the lives of the seniors are saved and the jobs of the young people are protected, Premier Borissov underlined.

Most observers contend that the measures undertaken by the Bulgarian authorities are correct and correspond to the current situation. However, some of them are quite skeptical of the results of these measures. According to the Director of the prestigious Institute for Market Economy Krassen Stanchev, these measures will work for three months only.

Bulgaria’s tourism which is among the most effected sectors by the coronavirus crisis has enough reserves, Boyko Borissov explained. We are now thinking what to do with the forthcoming summer tourist season, Premier Borissov added. Let’s not panic, Premier Borissov said and added that the business and the citizens keep billions of Euros in the banks. So far, we don’t need to borrow new loans. We have enough money to go through the next two months, Premier Boyko Borissov went on to say.

Meanwhile, the Bulgarian Chamber of Commerce and Industry published its own analysis about the economic situation of the country. According to this analysis, 12% of the Bulgarian companies stopped functioning and the state will pay 60% of the salaries of 100,000 people. 96% of the Bulgarian companies contend that the most significant and necessary measure the countries must take is to guarantee the movement of goods and raw materials along the trans-European corridors which will guarantee imports and exports. This is an extremely important measure which will allow the country’s economy to function smoothly, BCCI further contends.

Experts estimate that the Bulgarian authorities can rely on a financial reserve amounting to a total of EUR 3.6 billion. They can use this reserve to support the local business if necessary. Perhaps, this money will not be enough to deal with the crisis and the state authorities may need to borrow new loans on the international money markets. However, this perspective does not look that dangerous against the backdrop of the current low levels of government debts. However, everything depends on how long and deep the coronavirus crisis will be and the experts are now unable to make any concrete forecasts. For now, the measures of the state authorities seem reasonable and in the right direction.

 

English version: Kostadin Atanasov


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