site.btaCabinet's Governance Programme Fails to Prioritize Consumption as Growth Driver, Trade Union Says

The Radev cabinet's programme for governance of Bulgaria until 2030 does not provide for the necessary level of consumption as a key driver of growth, said Plamen Dimitrov, President of the Confederation of Independent Trade Unions in Bulgaria (CITUB), at a press conference on Friday, presenting CITUB's assessment of the government's recently announced programme.

"There is an ambitious programme that sets the right direction for development but does not establish the social contract necessary for its implementation," Dimitrov commented, adding that there are some very worrying omissions.

"Investment and exports must also be further encouraged as drivers of growth in order for gross domestic product to increase and for us to make progress towards convergence [with more developed EU economies]," he explained.

"There is no income policy," the trade union leader also said. He noted that in the more than 200-page programme, the intentions regarding incomes remain unclear.

"A lack of investment in people and in overall household consumption can be expected, which will have a negative impact on growth in such a difficult environment, in which there are conditions for prices to continue rising," Dimitrov said.

There are still conditions for prices to continue rising, driven mainly by external factors, the CITUB president explained. "We have already seen an unexpectedly high increase in inflation in August. Stimulating consumption is an imperative," he said.

"We are concerned about fiscal consolidation that is steeper than what is possible and necessary, which would cool the economy and create a risk to growth," Dimitrov explained. In his words, this creates risks of recession.

"We are cutting spending across the entire budget too quickly, and that means having a negative impact on consumption at the macro level through government spending," he added. Excessive and ill-considered fiscal consolidation in order to bring the deficit down to 3% wil lead to serious social and economic disruption, he explained.

The trade union believes that a fundamental problem with the programme is the mismatch between the scale of the stated objectives and the specificity of the mechanisms and measures envisaged, as well as the insufficient inclusion of labour as a full-fledged participant in the economic and technological transformation.

According to CITUB, the government programme sets the right direction for Bulgaria in terms of restoring industrial potential, technological modernization and comprehensive measures to curb the grey economy. It also includes commitments to developing education and making healthcare more accessible. The use of the "cost-benefit" method when implementing nationally funded public investments is another positive aspect, Plamen Dimitrov said, with capital expenditure offering high added value being prioritised. He added that the intention to complete the programming period for funding under the European Union's cohesion policy by the end of next year could also be viewed positively.

"We will insist that the national industrial strategy be adopted no later than the beginning of next year, so that we have a clear idea of how it will develop," CITUB vice-president Ognyan Atanasov said. In his words, it should go hand in hand with a national energy strategy in order to ensure predictability.

"We will propose a mechanism to support businesses and will insist that it be included in the programme," he added. "As regards new plants and technologies, we see a serious investment programme that is extremely modern, but it is a long way off. It is important to have interim deadlines for its implementation," Atanasov said.

According to Lyuboslav Kostov, Director of CITUB's Institute for Social and Trade Union Research, the programme lacks target values for indicators. "Usually, when a government programme is drafted, targets are set," he explained.

"The government programme contains no stated direction for improving the regulatory framework governing overtime work," CITUB Vice-President Todor Kapitanov said.