site.btaDeputy PM Pekanov Warns of Critical Inflation, Urges Stronger Government Regulation

Inflation is currently the main challenge for all Bulgarian citizens, according to Deputy Prime Minister Atanas Pekanov, who is responsible for EU funds in the new Bulgarian government. "We see that in April Bulgaria had the highest inflation in the eurozone. This is extremely worrying, and it is no coincidence that the first task of the new cabinet of Prime Minister Rumen Radev was to take steps in this direction," Pekanov said on Friday, speaking on the "Panorama" weekly political talk show of Bulgarian National Television.

Pekanov said: "Legislative proposals were submitted to strengthen the regulators – not initiatives that are anti-market, but ones that will strengthen the role of the government so that the market does not become a jungle, as has so often been the case in Bulgaria. Yes, we accept that the invisible hand of the market is important, it has to be safeguarded, but we must recognize that when the invisible hand of the market is not controlled in some way and when there are no rules, it may slap some people and take from others, and this is precisely where the government must intervene – to regulate and to provide transparency in the way that happens in Western countries." 

The Deputy PM added that the regulators have strong analytical capacity, and consumers have sufficient information to understand what is happening. "We will work to halt the rise in prices, to calm this inflation," he stressed.

Pekanov noted: "We are not promising miracles, because many different factors lie behind inflation and it is difficult to say how much each one has contributed."

"Fiscal consolidation will most likely be necessary as well," he went on to reason. "The pumping up of consumption in recent years through the constant increase of debt is not something that can be maintained permanently. Sooner or later the bill has to be paid. Yes, incomes needed to rise, but this went beyond sustainable levels a long time ago."

Regarding the euro, Pekanov stated that the single currency is not the only factor behind rising prices, but it has created possibilities for unfair practices. In his words, traders should not speculate with this process and should not do what many people feared – raise prices excessively. "The worst scenario materialized for us, because the government was not where it should have been," Atanas Pekanov commented.

According to him, the situation with the Recovery and Resilience Plan is critical. In the five years since this European Union mechanism has been functioning, Bulgaria has received 53% of the funds. The other half must be received within three months. Other EU countries have received around 70%. "In no way do I deny that a lot of work has been done. Dozens of projects must be finalized. It is not certain that all the money will be taken, and the most difficult reforms have been left for last, Pekanov said.