15.03.2021

An interview between Yavor Stamatov, Radosvet Radev, and Krasen Stanchev on "Sunday 150"

"We lost 8% in exports. Imports fell by 10%. Unemployment is on the rise - around 170,000 effectively lost jobs. What is worrying - investments have been abandoned and consumption has been declining. The whole world is in debt - global debt is about 350% of Bulgaria's GDP. The growth of foreign debt in Bulgaria is 2.3 billion leva", Radosvet Radev, President of the Bulgarian Industrial Association, summarized for the National Radio.

Krasen Stanchev, founder of the Institute for Market Economics and Associate Professor at the Sofia University, also commented on the topic. According to him, it is important to focus on what lies ahead.

"Bulgaria has accumulated good fiscal reserves, which slowly and untimely did soften the blow ... The decline in GDP is shorter by half a percent due to the limitations of government spending specifically for wages. This partly explains the good behavior of taxes. We still don't know how many companies will go bankrupt. We know there has been a delay in what was promised. About 1.4 million people are not included in any measure at all."

Radev also pointed out that it would've been helpful if the measures were reduced of bureaucracy.

"The Bulgarian market consumption missed the Bulgarian guest workers' money. The fact that there is an increase in household deposits is indicative. The crisis forced people to be extremely cautious. Some of the measures were designed in such a manner that they were only available to 10% of the businesses the country ".

Stanchev added that a percentage of the fiscal reserve could have been used to temporarily suspend the payment of direct taxes.

"Nothing has been done to improve healthcare spending ... Luxembourg is fiscally better than Bulgaria, but handed out new loans that serve the most politically affected sectors. We have quasi-taxes and we could have saved money. "

Radosvet Radev stressed that new economies, standards, and processes are created in times of crisis "but our country does not have the ability to spot opportunities or the courage to support them."

"The influx of super liquidity in the global economy is the beginning of an extremely dangerous process of inflation and revaluation of all assets in the world. Managers' priorities must be set on how to create adequate rules so that the business can achieve its economic result. We must put efforts into bringing those failed investments to Bulgaria. "

Both agreed on the effectiveness of the credit moratorium measure. However, Radev asked what is about to happen in early April, when the credit "vacation" was over.

"There will be a queue of cascading bankrupt companies."

According to Krasen Stanchev, it is strange how Bulgaria loses investments compared to neighboring countries with similar experiences.

"There is absolutely nothing innovative and of added value that Bulgaria has in its recovery and sustainability plan which could generate profit. The energy field is just a simple example. According to him, the private sector is being pushed out of the economy which is a big problem.

 

Date: 15.03.2021

Source: BNRBulgarian National Radio

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