Council of Ministers Approves Plan for Economic Recovery

Council of Ministers Approves Plan for Economic Recovery

The Council of Ministers approved an economic recovery package for the period between July 27, 2009 and April 27, 2010, the government information service said on Wednesday.

The aim is to achieve quick, real, sustainable results for eliminating the consequences of the global crisis, as well as economic recovery in the first nine months of the government's term.


The government sets out to:

- Achieve a stable macroeconomic system by maintaining the currency board arrangement and the fixed euro-lev exchange rate until the country joins the Eurozone, and stepping up work to join the Exchange Rate Mechanism (ERM-2);

- Ensure a balanced budget and conduct a continued daily fight against fiscal fraud and tax evasion;

- Achieve a stable financial system by cutting ineffective expenditures in the 2009 budget by 15 per cent and a second reduction at the end of 2010;

- Keep the 20 per cent VAT rate unchanged as at January 2010;

- Stamp down on corruption in the absorption of EU funding;

- Improve the financial management and control systems;

- Develop the system for financing and raising of funds for health care and voluntary health insurance funds;

- Introduce fiscal meters for turnover readings at filling stations.


The government will do the following to improve the business environment:

- Reduce the start-up capital of commercial corporations to 2 leva (which has already been done);

- Ensure fast VAT recovery;

- Reduce social insurance contributions by 2 per cent in 2010 and by 1 per cent each of the next three years to a total of 5 per cent during the government's term;

- Have new provisions adopted in the Public Procurement Act;

- Ensure control of the money made available by the Bulgarian Development Bank to commercial banks with a view to the effective use of business loans;

- Speed up bankruptcy proceedings;

- Amend the Regulation of Economic Activity Act to introduce transparent, unambiguous, categorical rules for authorization and registration requirements.


The package includes the following measures to step up agricultural production:

- Putting an end to forest swaps and changes in the uses of forests (which has been done);

- Urgent accreditation of the animal identification system;

- Adequate supplementing of the incomes of agricultural producers through strict application of the Single Area Payment System;

- Tapping the potential of the State Land Stock to provide land to agricultural producers.


The infrastructure is to improve through the following steps:

- Assessment of the cost effectiveness of the Belene nuclear power plant and of the need for new energy capacity in the Balkans;

- Transformation of the state-owned energy companies into public corporations and listing 15 per cent of their shares on the Stock Exchange;

- Accelerated implementation of the large-scale infrastructure projects under Operational Programmes Transport and Environment.


With a view to improve the employment rate and social assistance, the government is planning to:

- Increase the minimum contributory income for self-insured persons to 420 leva;

- Shift the emphasis of programmes from temporary employment to stable employment of disadvantaged groups in the real economy;

- Build a single information system for vacancies, training and retraining.


A knowledge economy will be built through:

- Systems for career development and introduction of academic performance-related bonus schemes;

- Support for the launch and development of research-based start-up innovative companies with financing from the Scientific Research Fund;

- An effective launch of the student loan system.


To ensure effective management of EU money, the government will:

- Simplify the process and documents for reporting of physical and financial project implementation;

- Decentralize the evaluation and control of small projects;

- Build and maintain an adequate capacity of the Audit Authority of the EU Cohesion Fund and Structural Funds;

- Ensure a steady financial flow to the beneficiaries, using EU money and national co-financing;

- Accelerate the processing of, and payments for, projects waiting to be processed;

- Optimize the operation of the FLAG Fund and increase its funding for preparation of projects.

The approved government measures have been discussed with the MPs, with the international financial institutions and the social partners, Deputy Finance Minister Ana Mihailova told journalists.

Source: BTA

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