site.btaMedia Review: December 1

OVERVIEW

All media report on the ongoing protests against the proposed state budget.

PROTESTS AGAINST THE STATE BUDGET

An op-ed by Kalin Yanakiev published by Kultura.bg reads: "Now, however, I would like to refute the falsifications by the media lackeys in connection with this protest. And I will say right away that it is not entirely accurate to describe it as a protest against the budget being prepared for vote by the so-called GERB-BSP-TISP coalition (under the unacknowledged leadership of [Movement for Rights and Freedoms - New Beginning leader Delyan] Peevski). No, in my opinion, this was not exactly an economically motivated protest, but a radical outburst (at last) against the truly self-absorbed, scandalously lawless oligarchic mafia that has taken control of virtually all state institutions. The outbreak of this political anger on Wednesday was indeed caused by the absolute outrage associated with the attempts to 'sneak through' the budget of the oligarchic circles, which people witnessed on that day (and in the days immediately preceding it)."

Yanakiev goes on to refute claims that the protests are against Bulgaria's euro adoption and that Vazrazhdane supporters were present at the protest on November 26. He is adamant that that protest was organized by the city's democratic community.

Mediapool.bg reports that protests will take place in Bulgaria's three biggest cities, Sofia, Plovdiv and Varna, on Monday under the slogan "We will not allow them to rob us."

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An article in Trud entitled "They Fill the Budget [by Moving Funds] from One Pocket to the Other" states that the government is prepared to back down on the two-point increase in pension contributions, the rise in dividend tax from 5 to 10%, and the introduction of shop management software for commercial establishments. The daily reports that automatic wage formulas are expected to be abolished, and property tax assessments are expected to be raised.

GERB leader Boyko Borissov said that pension contributions could be increased by only 1% instead of 2%, as provided for in the draft budget. He continued: "If we resort to the withdrawal option, then everything starts from scratch. The second option is to give up the dividend tax and the 2% increase in the insurance contribution, and it [the insurance contribution] will go to one [percent]. We will convince our partners. On Tuesday, everyone will make their proposals. Then the Budget Committee will meet [...]. Once it passes there, the proposals will go to the plenary hall, and we will finalize the year with an approved budget. The third option is to activate the Extended Budget Act. I prefer to have a regular fiscal framework. There is no way to make everyone happy, as the state budget is like that of a family."

Borissov did not deny the possibility of tensions between GERB and its coalition partner, the BSP - United Left, due to the latter's insistence on satisfying social demands. He added: "We have two right-wing parties and two far-left parties, and from the very beginning there has been tension and disputes within the coalition. It has been shaky since its first day, but it seems stable. It is designed to withstand shocks by being flexible."

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The President of the Confederation of Independent Trade Unions in Bulgaria (CITUB), Plamen Dimitrov, and the Executive Director of the Confederation of Employers and Industrialists in Bulgaria (KRIB), Boyan Nikolaev, said in an interview for bTV that a key tripartite meeting is expected this week, after the previous one failed to take place due to employers' refusal to accept the proposed state budget. Dialogue has been restored, and the Ministry of Finance is evaluating the proposals submitted by businesses and trade unions.

According to Dimitrov, a solution can be reached without raising dividend tax with lower growth in social security contributions.

Nikolaev reported that KRIB would not accept an increase in social security contributions even by 1 percentage point. He added: "Bulgaria does not have low taxes. Workers are already reaching their limit. That is why raising social security contributions is a no-go."

The CITUB acknowledges that the social security system needs to be stabilized in the medium term but stresses that the decision must be prepared smoothly and predictably rather than imposed suddenly. At the same time, the unions are insisting on a 10% increase in the wage bill in the public sector, as well as on equalizing incomes in the administration, where, according to them, there are serious disparities. According to the CITUB and KRIB, reserves can be found in the budget without increasing the tax burden. They listed options such as partial non-implementation of capital expenditures, which is between 35% and 40% annually, as well as updating the minimum insurance thresholds, which have been frozen for years.

Dimitrov warned that the state seizes 100% of the profits of some state-owned enterprises, which blocks their investments and makes them dependent on political decisions.

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Former deputy finance minister and Fiscal Council member Lyubomir Datsov said in an interview for Nova TV that it is unrealistic to have a state budget drafted in 10 days. He said: "The budget process begins eight months in advance. There are many procedures to go through, and 1,000 people are involved. From the Ministry of Finance alone, there are 150 to 200 people who calculate and make the estimates. If everything could be done in 10 days, then this process would be meaningless."

Datsov stated that the current draft budget contains completely contradictory political and economic goals, which requires reworking the entire document. The expert added: "The budget is like a structure that is planned to be sustainable with about 38% of GDP. I am one of the architects; we headed in this direction in 1997. If it goes to 46%, what can happen is your legs will buckle, because it will not be able to hold up. Or a new budget structure will be created, linked to tax increases, because a sustainable source of funding must be found."

The expert warned: "In our report, we already have revenues at this stage that we believe will not materialize. We are talking about EUR 3.5 to 4.7 billion. They are overestimated, similarly to 2025. Now we see that at least EUR 3.5 billion will not materialize. Something is wrong. Either the revenues are wrong, or the GDP forecasts are wrong."

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In the context of protests against the draft state budget expected to continue on Monday, with the organizers' activity on social media suggesting possible mass discontent, the former head of the National Intelligence Service (today's State Intelligence Agency) Dimo Gyaurov said in an interview for bTV that potential problems for the Cabinet can be seen on the horizon. Gyaurov said: "The black swan is this intransigence, this arrogance, the pretext for adopting the budget. It seems to me that this protest is not about numbers, it is not about the disadvantage of one social group at the expense of another, but because of the way it all happens, not just intransigence, but banging on the table with an arrogant gaze into the cameras."

Commenting on reports of possible planned clashes and arson, the former intelligence officer shared that he does not believe that employees of the Ministry of Interior would take part in such provocations. He warned, however, that "external elements" such as football hooligans and paid groups are more likely to participate in provocations.

Gyaurov praised some police officers for showing professional attitude during rallies and protests. He also criticized some of their colleagues for letting their beards grow long and wearing tattoos "up to their ears".

In the context of the ongoing protests, one of the most widely discussed topics is the planned large increase in funding for law enforcement agencies. According to Gyaurov, the increases are drastically disproportionate, and the state administration is underestimated, as there are university graduates being paid minimum wages. He described the payment system as chaotic and unreformed and added: "The public sector employs 600,000 people. With their families, that is an entire electoral army. That is how the government buys love," Gyaurov concluded.

JUSTICE

The Bulgarian National Television (BNT) and 24 Chasa report that the European Public Prosecutor's Office (EPPO) has filed an indictment against the former mayor of Varna, Ivan Portnih, and the ex-regional governor of Varna, Ivan Passev, as well as two other public officials from the Executive Agency Maritime Administration, for fraud relating to the reconstruction of a fishing port that did not exist. [The daily is likely referring to a former governor called Stoyan Passev rather than Ivan Passev.] The four are accused of forging official documents and submitting false information, in order to illegally receive EU funds for a EUR 3.4 million project, co-funded by the European Maritime and Fisheries Fund.

EPPO's investigation indicates that, in order to be able to benefit from EU funds, exclusively dedicated to the improvement of the infrastructure of existing fishing ports, the beneficiary assembled several pontoons as floating piers, with the sole purpose of registering the site as an existing harbour. In addition, the beneficiary presented false information and did not include all the documents required by the national legislation to obtain the necessary certificates. The estimated damage to the EU budget is approximately EUR 2.8 million, with an additional estimated damage to the national budget of EUR 675,475.

GAMBLING

An article by BNT reports that between 4% and 7% of Bulgarians are gambling addicts. The article tells the story of a married couple that was on the verge of divorce due to the husband's addiction, which began as betting of football matches and developed into spending in casinos. The problem became a nightmare, as the man already had borrowed thousands and had five enforcement agents chase his overdue debts. His wife shared: "The amount was around BGN 7,000, which grew into much more with court fees and interest, which he refused to pay, expecting me to pay everything because I was used to doing so." The advice she got from an addiction centre was to let him take the responsibility for all credits he had taken.

One step that helped with the issue was having the husband register with the National Revenue Agency Register of Persons Vulnerable to Gambling. More than 50,000 have submitted applications for entry in the NRA Register.