Bulgaria is bottom of the list as one of the “bad boys” of the EU, and alongside Croatia, France, Italy and Portugal falls into the category of countries with excessive imbalances that require vigorous political action and specific monitoring. This is, essentially, what the country-specific recommendations in the European Commission report, presented in Brussels at the end of last week, boil down to.
These are recommendations to the 28 member countries for attaining economic growth and raising the incomes of the population by pursuing a judicious fiscal policy. In other words, “to feed the wolf and keep the sheep”, as we Bulgarians say. Recommendations are made every spring as an element of the European semester – an EU mechanism of coordinating the member countries’ economic policies.
This latest EC Bulgaria country report is not entirely negative, though it is not as positive as could have been expected either. It takes note of the progress made, though it is not enough to dispel doubts that the country is a potential risk factor to the EU. So, a long list of points on which criticism has been dished out is now being added to the “traditional” EC monitoring on the judicial system and high-level corruption. Starting with fiscal policy and ending with the pension system. The document has not omitted to make mention of the financial sector turbulence in 2014 with the bankruptcy of the fourth largest bank in the country, the Corporate Commercial Bank, pointing to the shortcomings in financial sector supervisory practices and oversights in Bulgaria. The report also targets the fiscal policy, as the measures to keep the deficit at 2.8% of GDP in 2015 do not seem to be specified with sufficient precision.
Tax compliance continues to be a major challenge in Bulgaria, the report reads, as there is no comprehensive tax compliance strategy. The Bulgarian healthcare system faces several major challenges, including poor health outcomes and low funding. Brussels notes that structural unemployment in Bulgaria is deepening especially among the young. The low quality of the education and training systems and their limited relevance to the labour market hamper the supply of a suitably skilled labour force to the economy. Criticism also focuses on the pension system, noting that 1.2 million pensioners receive pensions below the national poverty line.
We should perhaps take solace in the words of Pierre Moscovici, Commissioner for economic and financial affairs, taxation and customs union who said that no member country can be said to be perfect and that is the reason why no country is omitted when the recommendations are made.
But if we take a look at the document from a different angle, we shall see that Brussels is in fact saying the same things over and over again about Bulgaria’s flaws ever since the country joined the EU in 2007. Bulgaria was and is the poorest country in the Union. In Bulgaria there was and is a handful of oligarchs who have, in the years of EU membership, perfected their methods of draining society’s vital resources. In Bulgaria there was and is high-level corruption.
And finally, one more area of criticism. The EC report on Bulgaria notes that poverty and social exclusion among the Roma population remain a concern, with the majority of young Roma being neither in employment nor in education or training. A statement that is the epitome of bureaucratic hypocrisy or ignorance – it would be difficult to find another EU country where the Roma are tolerated to such an extent as not to be paying their electricity bills or for health insurance for example, yet using these services.
But let us go back to Brussels. The country-specific recommendations of the European Commission will be discussed at a ministerial level in June after which they will be approved at the summit in Brussels on June 25 and 26. Then the EU members will begin to implement them in their policies and national budgets over 2015 and 2016.