The caretaker government was appointed and on the very next day calls for spending were (over)heard – to borrow money and to increase incomes. It is even hard to track who is making such arguments – the Bulgarian EU Commissioner, for instance, occupied the media with this proposition, and then renounced the statements. It’s a fact that such populist arguments always appear in the public debate when there’s a vacuum for ideas. In a case of a new government, a new budget law or a revision of the budget being voted, an anti-crisis program being debated or a caretaker government appointed, there is always someone to start talking about debt and spending. There are people who believe in the mantra that spending money we do not have will make us wealthier. There are also outright populists who expressed such opinions in the last couple of days.
"Economic Policy Review" Bulletin ISSN 1313 - 0544
Information about the growth of the economy for 2012 has recently been published and it shows a modest growth of 0.8% for the year. The economic performance entirely coincides with our expectations of a prolonged stagnation and slow growth around 0,7-0,8% last year. A couple of days ago the national statistics also announced that according to its final data for 2011, growth was 1.8% or 0.1 percentage points higher than first announced. Hence the economic slowdown in 2012 is even more sensible if the revised data are taken into account.
Things seem to have finally calmed down in Bulgaria. After a wave of nationwide protests, the cabinet of Boyko Borisov made way for an interim government, headed by the former Bulgarian ambassador to Paris, Marin Raykov. To the outsider it might seem as if these protests were a lot like the ones that are taking place throughout the rest of Europe. “The Economist” even cited “falling wages” and “severe austerity” as a driving factor of people’s discontent. This conclusion, however, has nothing to do with the reality on the ground, or the facts that surround it.
... All the above is to say that limiting competition for rents cannot happen in any of the currently proposed ways. The only good option for limiting poverty is widening end user’s choice, curbing economic powers of the government, limiting their expenditure and the possibilities to make choices for the people. After all, the economic foundations of such a development are well-elaborated. The fact that they are not known and not discussed presently in Bulgaria is a very big issue.
The recent social unrest in Bulgaria was accompanied by numerous commentaries. There are certain inaccurate arguments that can be heard in Bulgaria, as well as abroad, which can severely alter the nature of the public debate and conceal the very substance of the protests. Such are, for instance, the comments that Bulgaria is another victim of austerity measures throughout Europe and that the people are populists since they want a new constitution which is supposed somehow to pay their bills and give them a better standard of living. These two statements are completely false.