11.02.2014

We strive after setting a broader base for economic growth. This is what Minister of Finance Petar Chobanov said at the National Government - Business Forum organised at the initiative of the Prime Minister Plamen Oresharski. He added that the Governments aimed at including the country's regions in this growth which should not be generated in several cities only. The key factors that could be mentioned here are the Public Investment Programme and the initiatives to be undertaken together with local authorities, Mr. Chobanov pointed out. As to consumption, the Minister of Finance said it went through several stages. First, the business climate must improve, the expectations of the business and the households must increase and new jobs must be created. The social measures of the Government aimed at those groups that are isolated and are unable to join the consumption are also a growth-galvanising factor. Mr. Chobanov said that the philosophy behind fiscal and economic policies is to address growth in all its forms.

During the panel of question and answers with business representatives the Minister of Finance also commented on a proposal to remove the currency board. Minister Chobanov said that at the start of the crisis the fears for Bulgaria had been that the neighbouring countries would gain competitive advantage due to the devaluation of their currencies. In practice, however, this did not happen. Taking account that these were a number of small countries with foreign-currency loans, this burdened the business in terms of national-currency debt, and it did not become easier for companies to export and realise profit; on the contrary, it became more difficult for them to pay their liabilities, he highlighted. Due to the fixed rate in Bulgaria, exports recovered most quickly than the other GDP components and this proved that the currency board was the arrangement to be kept until joining the euro area.

Minister Chobanov said that the process of reindustrialisation is a complex one and the individual cases could not be generalised. Everything depends on the difficulties a given company has encountered. The Minister gave as an example the existence of large tax liabilities that could not be served and the options for them were either to be rescheduled or the state to become a shareholder in the company in the form of debt against ownership. "It is not necessary for the state to participate directly in this process by providing budget resources", he specified and added that there were a number of state-owned enterprises that could acquire shares, thus avoiding the use of public resources. Mr. Chobanov said that there proposals from the business to participate in the revival of enterprises the production of which could be resumed and profitable.