"In order to catch up with the developed countries of the European Union and have a knowledge-based economy, we need reforms of a new generation in education, development and the labour market," Prime Minister Sergei Stanishev said Wednesday at the opening of the Annual Meeting of Business and Government on Second Decade of Growth - Risks and Opportunities, BTA reported.

The forum is organized by the "Capital" economic weekly and the "Handelsblatt" German business daily in partnership with the Confederation of Employers and Industrialists in Bulgaria.

"The time of the euphoria after Bulgaria's accession to the EU passed. Bulgaria should affirm itself and seek its profile and ensure competitiveness power of the nation," Stanishev stated. The world has become mutually dependent and this applies to Bulgaria as well, he observed.
This forum provides an opportunity for a real and serious discussion of what has been achieved and of the new challenges and hardships, Stanishev also said.

The public attitudes are totally different now because it has become clear that it was worth to suffer privations in the past 17 years given the country's accession to the EU. Bulgaria has been undergoing fast economic development, which is evident from the statistics and the realities. Yet, people have higher expectations and this is also a reality, the Prime Minister said.

There is consensus in Bulgaria in regards to the significance ofthe currency board. Now the goal is to join the Eurozone and then many of the current structural problems would not entail such a risk as is the case at present. The fulfillment of the criteria requires sustained financial stability, reasonable increase of salaries and many other components, the Prime Minister stressed.

The forecasts for a record-high current account deficit of 18 per cent for the present year is a serious signal for tightening the fiscal policy in the next few years, Finance Minister Plamen Oresharski said addressing the forum. He quoted figures showing the January-July deficit equalled 11.4 per cent.

Economic growth in the second quarter of the year was 6.6 per cent and the average one since the beginning of the year - 6.4 per cent. According to the Finance Minister, this tendency could be preserved.

Dwelling on the outcomes of an internal discussion on the 2008 budget, Oresjarski said that 2008 will be more difficult than 2007 but easier than 2009.

The Finance Minister said that keeping the current growth rates will be at the expense of higher inflation. He said the causes for this as the world prices of farm produce, the sharper increase in earnings, mainly in the private sector, which is in turn connected with difficulties in finding workers and the low unemployment rate.

Currently the unemployment rate is 6.8 per cent, which is slightly below the European average, he said.

The period when salaries will catch up with the European levels will be a long one and not rosy at all, Oresharski said.

Labor and Social Policy Minister Emilia Maslarova dwelled on certain challenges before achieving flexibility of the Bulgarian labor market. In the 2001-2006 period only 1.2 - 1.3 per cent of the population, aged 25 - 64, took part in training courses which compares to an average of 9.6 per cent for the EU, said she. Bulgarian entrepreneurs still count on low labor costs as a factor of competitiveness, Maslarova stated.