Business and trade unions rejected part of the government's anti-crisis measures

In a meeting of the National Council for Tripartite Cooperation on May 30, business and trade unions rejected some of the anti-crisis measures proposed by the government.

The National Council for Tripartite Cooperation includes representatives of the government, employer organisations and the trade unions.

The government proposed reduction of VAT on heating, electricity and natural gas for households; introduction of zero VAT rate for bread, increase of pensions and support for businesses.

Both business and trade unions were firm that reducing VAT on bread will not lower its price. The business sector criticised the measures as insufficiently targeted, which is why, according to employers, they will not achieve the ultimate goals - helping businesses in the difficult situation.

"We think there are two problems - one is the high inflation, which in our country is almost twice as high as the European average. In addition, the non-compensation of enterprises makes them insufficiently competitive and this is the second problem, which is also not addressed," Vassil Velev of Bulgarian Industrial Capital Association.

According to the trade unions, the package of anti-crisis measures could be bigger and amount to BGN 3 billion instead of the planned BGN 2 billion.

These are not anti-crisis measures, these are some intentions. They will start to look like anti-crisis measures when they start to look like legal texts. I am not saying this in principle, because we know that the devil is in the details and that the current intentions, may tomorrow, when they become legal acts, start to look completely different," commented the President of "Podkrepa" Trade Union, Dimitar Manolov.

Both trade unions and employers support the introduction of a higher VAT registration ceiling and relief for families with young children.

"Overall, we are glad that most of the measures were supported by trade unions and employers. The proposal for pension indexation to take effect from 1 July and 1 October respectively was also discussed. The main package of measures, as you know, are aimed at the sources of inflation, which are linked to imported fuels - gas and oil, as well as food products, where inflation comes directly from the price of grain on international markets, which has risen three times since January, and linked to fertilizers and fodder," Deputy Prime Minister and Minister of Finance Assen Vassilev said.

The biggest controversy was caused by the size of the maximum pension, which is to be increased in two stages - from July to BGN 2,000 and from October to BGN 3,400. Both business and trade unions believe that this cannot be introduced in this way, because of the preservation of the level of the maximum threshold for social security contributions.

"If we had implemented the original option as decided - rather one of the options - 21.6% on all pensions, it would have widened the gap between older pensions, even further between smaller and larger ones. From 1 October there will be a new modified pension update, it is a new recalculation of pensions," Social Policy Minister Georgi Gokov argued.

The question remains whether people who retire after July 1 will receive a 60 BGN supplement to their pensions, which is included in the pensions of everyone else.

Images by BGNES

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