Economic Policy Review ISSN 1313 - 0544

“New Deal for Bulgaria”

Author: Veliko Dimitrov / 27.09.2007
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In the course of the week (19.09.07), at an organized press conference, the relatively new political party CEDB (Citizens for European Development of Bulgaria)[1] revealed its complete economic program - the vision how Bulgaria is to be governed if the party wins enough seats at the next parliamentary elections. Since the very foundation of the party, more or less acquainted with the topic groups has been arguing if it is left, right or with whatever other affiliations party. I will attempt to answer this question only assessing the economic program[2].

Division in politics between left and right is made on the basis of the understanding of liberty that each party has. There are two types of liberty in general (some interrelation between the two is always present) - individual and economic liberty. More individual freedom means more liberal understanding upon questions like abortions, people with non-traditional sexual orientation, immigration, light drugs, prostitution, etc. Usually these standpoints are presented by left-oriented politicians and parties. More economic freedom means less government intervention in the economic life of people in general - as consumers, producers, investors, etc. This in turn means less regulations, lower taxes, less state-owned enterprises, less subsidies and bureaucracy. This view is usually shared by right-oriented politicians and political parties.

Measuring these two freedoms on one scale is obviously impossible and to a certain extent unnecessary. Conventional division of left and right may be presented also well if we take just the attitude toward economic liberty because first, exactly these policies always attract attention and second, because they have the greatest weight in determining future economic development.

Which are the main ideas of CEDB?

  • - Lower government expenditures - reducing the redistribution through the budget to 30% of GDP (now it is around 40% varying slightly if measured using revenues or expenditures);
  • - Introduction of a high (in the case of Bulgarian average income) non-taxable income level of 1000 levs (1 lev = 0,5 euro) and a lower VAT rate of 15% (currently 20%);
  • - Abolishment of the heritage and donations taxes;
  • - Widening and deepening of the fiscal decentralization - municipalities shall rely to a lower degree on the central budget and on the decisions of the central government;
  • - Repayment of state debt;
  • - School autonomy, voucher system and major shift of the barrier toward the end of the educational period - instead of having accession exams, those would take place before graduation;
  • - Autonomy of universities and change ion the way how the are financed - no more direct state subsidies;
  • - Equal treatment of state and private health funds - they have to compete;
  • - Reduction of the mandatory pension contribution from 23% to 10%; the whole payment goes to a private pension fund chosen by everyone;
  • - Less government regulations in terms of licensing; introduction of the principle of "silence consent";
  • - Less power for the sector regulators; abrogation of all delegated in the past rights to organizations outside the state for the introduction of compulsory membership, fees, quasi-licensing, etc.

The listed above measures as well as many others included in the economic program of the new party guarantee more economic freedom. In this sense, at least at this stage, the political party CEDB could and should not be deemed as other than right.

I hope that these good ideas will be put in practice. Then the newly established party will prove that it is right in practical terms as well.


 


[1] GERB in Bulgarian - Grazdani za Evropejsko Razvitie na Bulgaria

[2] Accessible at: http://gerb-bg.com/Gerb_Program_logo.doc (only Bulgarian)