BUSINESS: IT’S THE SPEED RATHER THAN THE SIZE, THAT HIDERS STATE SUPPORT

In the critical situation in which the COVID-19 pandemic put the world, governments have pulled out an arsenal of measures. Since the rich could afford to be more generous, differences were inevitable. But how did countries like Bulgaria distribute their more modest savings? Did the government invest in common sense and help the "wounded" by the two (so far) partial lockdowns, the decline in consumption and the loss of jobs?

To answer all these and other current questions, Dir.bg sought the four largest employers' organizations in the country: the Association of Industrial Capital in Bulgaria (BICA), the Bulgarian Chamber of Commerce and Industry (BCCI), the Bulgarian Industrial Association (BIA) and the Confederation of Employers and Industrialists in Bulgaria (CEIBG).

Lack of "speed"

In crisis situations, such as the current one, the speed with which the governmental aid reaches those who need it is of utmost importance. According to BIA, however, the measures started slowly, with difficulties and with severe "birth pain".

"In most cases, the state acted reactively to alleviate a certain problem. They rejected our proposal from the very beginning of the state of emergency to create an economic headquarter which could suggest proper economic measures," the Bulgarian Industrial Association explained. As a consequence, the experts add that many months were lost in trying out various compensation mechanisms.

However, we cannot deny that the government is not trying to help business and entrepreneurs in any way during this complicated and difficult situation that has been going on for about ten months now, BICA believes. And they add that like any government, this government has had its achievements, successes and failures.

Why do some benefit and others don’t?

Support for micro and small enterprises from BGN 3,000 to 10,000 reached 21,000 companies or BGN 173 million; by the measure 60/40 or 80/20 nearly BGN 750 million have been paid; 111 million reached 26 thousand individuals and self-insured people; 10 million were handed out to tour operators and others.

The fact is, however, that a large number of companies remained outside the scope of the measures for one reason or another.

"First of all, the slow procedures – there are in fact, companies that have not received the grants for which they applied for in March during the first lockdown. Then we have the conditions due to which some companies fall outside the scope of specific measures. Lastly, the considerable paperwork- documents that can be collected automatically by administrative order ", the BCCI pointed out.

BICA has repeatedly pointed out the ineffectiveness of the notorious 55th decree of the Council of Ministers in its original form - the so-called "60/40" measure. However, they also underlined the much better results of the 151st decree of the Council of Ministers.

In the case of the 55th decree, the failure could have been avoided, but the executive officials were relutant to listen to us. Aterwards, with the adoption of the 151st, they clearly realized that our criticisms were well-intentioned. They approached another philosophy with this decree. The good results were not late ", added BICA.

All these things are already old by months. In the meantime, many consultations were held, special meetings of the National Council for Tripartite Cooperation, positions and measures were agreed. The problems are already moving more towards the technical side of the implementation of both measures and deadlines.

For us, the main conclusion is that when "constructing" such measures, greatest attention should be paid to the way they are going to be applied. The measures should be designed so that they could be applied automatically, so that there is no need for any official assessments. In the databases of the National Revenue Agency and the National Social Security Institute there is information on the basis of which it can be automatically assessed whether you meet the requirement to apply a certain measure," the Association of Industrial Capital explained. According to them, the procedure should be accessible via electronic applications, assessed automatically (no artificial intelligence is needed for this, a relatively simple algorithm is enough) and the funds should be disbursed as quickly as possible by bank transfer.

It is hardly possible to talk about universal measures, BIA clarifies. They added that one could think, however, of a comprehensive approach for economic support, applied to all companies that have suffered a certain decline in turnover.

"We have long insisted on a more comprehensive, predictable, lasting and maximally non-bureaucratic compensation process. Regardless of the design of the measures, the most important thing for business is the speed with which support reaches the affected companies. This is more important even than the size of the provided funds ", BIA states firmly.

Notifications are unlikely to be delayed

Usually the process of obtaining a "yes" from the European Commission for the payment of funds under the various measures takes about 2-3 weeks.

"The process is slow in reaching requests for notification. In most cases, the payment of funds begins after obtaining the approval of the EC. Of course, this does not hinder the process of applying and evaluating project proposals. With good planning by the administration, the two processes can be carried out simultaneously and so the delays in payments to businesses would be minimal, "said BIA.

BICA adds that with the exception of the saga around the so-called "American headquarters" (which are a special case), the administration in Brussels is much more adequate than the Bulgarian one and often treats Bulgarian issues with more concern than our own administration.

Measures through the business prism

BCCI continues to insist on the removal of the payment of the first three days of sick leave by the employer and instead to switch to social security, especially in the current situation, because this further worsens his condition, given the pandemic situation.

"Under measure 60/40 we have repeatedly objected that there is no possibility to appeal to the decisions. The best solution for economic measures is for them to reach the respondents of this aid within a week or two, because any delay costs the economic life of one or another company. This cannot be done, however, without a single electronic connection, through which to automatically check the completed data, and not to require documents for which information can be taken from other agencies," the Court added. According to the organization, opportunities should be provided to companies for interest-free or low-interest lending and their pre-pandemic results should be taken into account.

We remind you that the BCCI insisted at the beginning of the pandemic that the 60/40 measure be in 80/20 or 80/0 format.

It's not the pandemic alone that is to blame

However, some of the most requested measures by business are not directly related to the pandemic and have not been "detonated" by it.

CEIBG pointed out that energy is among the most serious problems for Bulgarian business.

"Unfortunately, last year we failed to finalize the much-needed reform in the sector and in 2021 we will continue to insist on its implementation. Energy is among our main priorities, as it plays a key role in increasing the competitiveness of the Bulgarian economy." , said the CEIBG.

The Confederation demands the preparation and signing of a National Agreement for Ensuring Liquidity on the Electricity Market on the Day Ahead Market, which will include the producers from the group of the Bulgarian Energy Holding, the Ministry of Energy, the Ministry of Economy, the Ministry of Finance and the national representatives, trade unions and employers' organizations.

OPIC is also a problem

We should also note two practical problems that we face severely and painfully, explained BICA. Both are related to the Operational Program "Innovation and Competitiveness" (OPIC). They think:

"One problem is that instead of using OPIC funds to encourage investments, they are moving in another direction - to support liquidity in the context of the coronavirus crisis. We are not saying that liquidity should not be supported, but not in such a total redirection. In the medium term, the economy is deprived of support for competitiveness with European funds, so there is nothing short of support for Bulgarian funds, so this approach is short-sighted in the medium term.

The approach had to be the opposite - budgetary resources had to be channeled to support liquidity and to fight the coronavirus, and no one would object to this, nor would there be grounds for such objections. OPIC funds were supposed to be reserved to support competitiveness, but this was not accepted.

The second problem is that we are facing elections and the natural reaction of all political players, including those in power, is to address the widest possible audience, the majority of the electorate with the most understandable and tempting offers. Simply put – promises of "income growth", wage increases. However, none of the promisers explained that in order for this to happen, investments are needed first, and the development of industries and agricultural production is needed. "Both the ruling party and the opposition have been silent about this, and at the end, nothing has been done in recent years to encourage and support investment."

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