Bulgarian Press Review September 15, 2009

Press Review
Sofia, September 15 (BTA)

THE HOME SCENE

The Monday meeting of the Consultative Council on National Security (CCNS) which President Georgi Purvanov convoked to discuss Bulgaria's progress in the reforms in justice and home affairs, and the measures to improve the absorption of EU funding, is at the focus of the attention of the Tuesday press. "Troud" says in a headline that the President and the Prime Minister agreed on how the utilization of EU funding should proceed. The newspaper notes the sharp exchange of words - as seen by Prime Minister Boyko Borissov, and the total consensus on the measures about the absorption of EU funding, counteracting corruption and organized crime - as seen by President Purvanov, which marked the first meeting of the CCNS after the new government took office. The press highlights the problems in the utilization of European funding as listed in a report to the CCNS by Finance Minister Simeon Djankov: little or almost none absorption of funding, poor administrative capacity, absence of an information system.

The dailies also list the priority tasks of the Justice Ministry, such as legal amendments to ban cash payments of transactions involving corporeal immovables, enhancing the fight against illegally acquired riches and reforming the penal procedure. Interior Minister Tsvetan Tsvetanov presented an action plan about the effective utilization of EU funding under the Schengen Facility.

The dailies quote the statement of the President at the end of the meeting who said that "the forum is an expression of a clear political will of all institutions and all parties represented in Parliament to implement the recommendations in the latest report on Bulgaria's progress by the European Commission". Boyko Borissov called the opinion adopted by the Consultative Council "a very good document". It gives all Bulgarians a chance to see that the party leaders, the President, the Council of Ministers and the National Assembly can put the national interest before partisan and personal interests, he said, quoted in the Tuesday dailies.

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The other leading topic in the September 15 newspapers is the start of the new school year. Minister of Education, Youth and Science Yordanka Fandakova confirms in a "Troud" interview that there is not a requirement laid down by the ministry "to measure the length of skirts of schoolgirls". Her statement is prompted by outcries against a recent regulation requiring school principals to issue rules for the proper apparel of students coming to school. Fandakova also dwells on the work of the Ministry saying that a main priority in it consists of a national programme for teacher qualifications.

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"Sega" interviews Prosecutor General Boris Velchev who says that it is ridiculous for the state to create the freedom and conditions for the perpetration of corruption crimes and then take to task the prosecuting magistracy for failing to halt them. Velchev stressed the importance of uncovering corruption crimes but notes that this is the job of the prosecuting magistracy only in part. The Bulgarian law admits provocations to the perpetration of crimes. One such example is the so-called controlled drug deal. However, such an approach is banned with regard to corruption, he says. Velchev suggests making the provocation to bribery a special surveillance means performed after court control.
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"You'd Better be Able to Find Ministers to Take to Court" warns former regional development minister Asen Gagouzov in an interview to "24 Chassa". He says that in a state where the law rules the categorical statements coming from the powers that be about pending convictions of ministers, rather than ministers' being pressed charges and taken to court, do not sound good. The extreme suspicion and revengefulness will benefit no one, Gagaouzov says. He describes as undignified hints and implications against him on the part of the new cabinet.

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Social analyst Anatolii Gulubov projects in "Monitor" that the November 15 mayoral by-elections in Sofia will strengthen the trust in GERB. He notes that the political stakes at the local elections in Sofia have always had national significance. However, this time the elections will determine the direction in which the relations in the parliamentary majority supporting GERB will develop. Gulubov argues that the by-election could distance the political parties supporting the incumbents without this endangering the stability of the parliamentary majority. More tangible changes are possible in the relations between the local structures and national leaderships of the Blue Coalition and of the Bulgarian Socialist Party beyond which a new political picture will start to emerge which will acquire reality in the next two years, Gulubov says.

ECONOMY

"Economic Report Commissioned by President Sparks Row among Economists" caps a report in "Pari" which dwells on the fourth economic report prepared for President Georgi Purvanov and entitled, "The Global Financial and Economic Crisis and Bulgaria". The report, commissioned to a team of scientists and experts from the academic community, is to be presented on September 18 within the Bulgarian Debates forum at the National Palace of Culture in Sofia. "Pari" writes that even before the official launching of the document, economists voiced a stand against the idea to scrap the flat income tax and return the progressive income tax. The experts took a more favourable stand for reducing the Value Added Tax. Nevertheless, many of the analysts are of the opinion that at a time of crisis direct taxes should be reduced and indirect taxes increased, instead of the other way round as proposes by the report. "Pari" quotes Finance Minister Simeon Djankov as saying that the idea to scrap the flat personal income tax is "imbecile, it is not just ill-considered or incompetent". The report authors propose a zero tax rate on monthly incomes up to 1,000 leva, 10 per cent tax on the income bracket between 1,000 leva and 3,000 leva, and 20 per cent on incomes above 3,000 leva. The current tax rate is 10 per cent on all incomes. Djankov said that it is impossible to make the tax threshold 1,000 leva. The Finance Minister also said that cutting VAT will have adverse effects. He once again explained that changing the tax policy at a time of crisis will be contrary to all logic. The proposals for anti-crisis reforms in the report were rejected even by members of the team who authored it, "Pari" notes.

In an interview to "Standart News" Djankov once again repeats that during crisis it is dangerous to tinker with taxes. At a time of crisis tax legislation is delayed for some time because otherwise big asymmetrical effects will emerge. He argues that sharp tax changes only increase the grey economy. The Finance Minister once again says that all tax ideas in the report commissioned by the President are ill-advised, imbecile and should not a will not be effected.

"Standart News" run the arguments in favour of scrapping the flat tax of one of the authors of the report, Senior Research Associate Gancho Ganchev. He argues that as a result of the flat tax, the actual tax burden was shifted towards people with lower incomes. Secondly, all leading countries with developed market economy not only retained the progressive taxation at a time of crisis, but strengthened it, he says. The serious reduction of production in Bulgaria, which reached 30 per cent, affects especially strongly the people with low incomes and makes them insolvent. They cannot increase their consumption and thus revive the economy, Ganchev says.

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"Dnevnik" interviews Economy, Energy and Tourism Minister Traicho Traikov who says that a draft energy strategy until 2020 is in the making. Traikov says also that how much electricity Bulgaria is able to produce is not that important as the price at which it sells and the market for it. The strategy will include energy efficiency measures, opportunities for the construction of new generating facilities, and increasing power generation from renewable sources, he says.

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"Economic Strategists Gripped by Populism Strain" caps a comment in "Troud" by former finance minister in the Simeon Saxe-Coburg-Gotha cabinet Milen Velchev. According to him, calls for "a new strategy" are heard always when the water becomes murky and it is not clear who and how will carry out the economic policy in the next couple of years. Velchev notes on the yet missing programme of governance of GERB. He too takes a stand against scrapping the flat tax. Velchev says that not a single country which has introduced the flat tax rate has given up on it.

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The dailies report in detail on the restructuring plan for the National Revenue Agency (NRA) presented Monday by Finance Minister Simeon Djankov. Most of the reports highlight that 263 tax chiefs will be laid off as of January 1, 2010 and that 29 of NRA's territorial directorates will be closed and replaced by five regional directorates. The new directorates will be located in Veliko Turnovo, Varna, Bourgas, Plovdiv and Sofia. A special directorate will be set up to work with major tax-payers countrywide.

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"24 Chassa" writes that judging by the cabinet programme for road construction, in the spring of 2013, months before the next regular general elections will be due, ribbon-cutting ceremonies will be held for almost all motorway sections which are at the moment unfinished. The road construction programme was presented Monday by Prime Minister Boyko Borissov, the ministers of transport and of regional development, Aleksandar Tsvetkov and Rosen Plevneliev, and Antonio Tajani, European Commission Vice-President and Commissioner for Transport. The first to be finished will be the section of the Trakia motorway between Stara Zagora and Nova Zagora in Southern Bulgaria, now a big bottleneck of traffic between Sofia and Bourgas. "24 Chassa" reminds that Bulgaria is one of the two countries in Europe without a single finished motorway.

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Former economy minister in the Simeon Saxe-Coburg-Gotha cabinet Lydia Shouleva says in an analysis contributed to "24 Chassa" that she is in favour of lifting the ceiling of new pensions, while that of current ones be increased by the end of the year, as discussed by the experts of the financial and social ministries. Shouleva says that such a step will increase people's motivation to pay social insurance contributions on the maximum contributory income.

Links to some Bulgarian info websites in English:

• http://www.bta.bg/site/en/indexe.shtml
• http://www.novinite.com/index.php
• http://www.focus-fen.net/


Most discussed topics of the day – September 15, 2009

• The Sofia City Prosecutor, Nikolay Kokinov, has received a huge amount of tax evasion evidence against Bulgaria energy tycoon, Hristo Kovachki. He therefore signed Tuesday the indictment of the City prosecutor to officially charge Kovachki with tax crimes amounting to BGN 16 millions.

• Currently the only nomination for Sofia mayor is mine: Georgi Kadiev. It is theoretically possible to appear another BSP candidate for mayor of Sofia. Sergey Stanishev can also run. In that moment I am the only candidate, Georgi Kadiev from Bulgarian Socialist Party (BSP) said for bTV


• Bulgaria marks first day of new school year. 59 596 first graders have entered classrooms on their official first day. The school year opened in 2667 schools. "We have every assurance that the organization has been made to ensure the proper functioning of the educational process," Education Minister Yordanka Fandakova stated.

• Three of Macedonians that took part in rescuing Bulgarian tourists during the incident in Ohrid Lake will receive Bulgarian citizenship. This is what Minister for Bulgarians in Abroad Bozhidar Dimitrov said.