However, the disappointment of the economic achievements in 2014 is due to other phenomena and trends. They are connected mainly with the public finances and the economic policy carried out by all three cabinets which have been in charge of the country this year.

The year started under the government of the center-left coalition cabinet of Premier Plamen Oresharski who is known for his expert potential in economics. His cabinet led a purely populist economic and social policy and had set quite unrealistic and optimistic targets in the country’s state budget. When the Oresharski cabinet announced its economic parameters for 2014, the former opposition at the 42^nd National Assembly, along with many economic experts and competent international institutions warned the former cabinet that it was too optimistic. The economic reality was slightly different and later came disappointment. After the resignation of the Oresharski cabinet the caretaker cabinet started to draw a very alarming and negative picture of the national economy.

The previous illusions and promises about a 3% growth of the country’s GDP in 2014, about a future increase of the social payments and benefits, a better absorption of the EU funds, export invasion of Bulgaria’s business, a growth in the state revenues by over EUR 500 million and an overall improvement of the living standard of the Bulgarian citizens collided with sober and impartial analyses and estimates of the experts from the interim cabinet which was appointed by Bulgaria’s President Plevneliev. We must admit that the leftist cabinet had perhaps felt upon the end of its mandate the first signs of a forthcoming crisis and unwillingly agreed with a slight amendment of the budget of the National Health Insurance Fund. Suddenly, the country was hit by a banking crisis against the backdrop of the calming assurances of the Bulgarian National Bank that the credit institutions in this country were flourishing and were quite stable. Then, the cabinet started to combat the lack of finance in the state budget. However, the National Assembly was already dissolved and the cabinet had little possibilities to respond to this crisis. Later the European Commission suspended the payments under the Regional Development Programme due to omissions regarding the absorption of the money allotted under this programme. The payments under the Environment Programme which were suspended back in 2013 were again resumed at the end of 2014. However, most of the projects under these two EU programmes were already paid for by the state budget. Thus, the deficit in the country’s budget rose significantly.

The economic picture of this country has become even clearer during the government of the current rightist cabinet which does not believe itself that it would finish its mandate. The economic forecasts were revised downward at the end of 2014 and the new cabinet was immediately forced to amend the state budget and boost the deficit to 3.7% of the GDP. Perhaps, this move would not be excused by Brussels which has been over-exacting towards Sofia with regard to the country’s budget deficit. The excessive deficit must be financed with money which could only come from the issuance of new debt which will exceed EUR 2.3 billion.

This financial agony inevitably affected the local business, the small and the large companies which operate in this country. The brightest example, which had biggest negative consequences for the whole state, is the bankruptcy of the Corporate Commercial Bank. This institution was merely robbed and devastated before the eyes of several Bulgarian cabinets. It was caused by the collaboration between big politics and the large business. The management mistakes and the inadequate behavior of the supervisory body of the Bulgarian National Bank would cost some EUR 1.5 billion to this country, as this money went directly to the Bulgarian Deposit Insurance Fund which has to reimburse all guaranteed bank deposits to the citizens and the companies who kept their money in CCB.

Bulgaria’s economy witnessed few things which bring satisfaction and optimism about the future. The national economy indeed marked a modest growth, but the problems accumulated during the year remain unsolved and would sooner or later explode, provided the political instability continues in the future. The situation should improve after the change of three cabinets in one year only, some optimists say. However, the positive signals are too weak. On the other hand, the pessimists are forecasting that the situation will get even worse.  High representatives of the current cabinet are warning that the EU money, which is one of the main driving forces of the national economy, could be fully suspended in 2015, which would bring catastrophic consequences to the whole state.

English version: Kostadin Atanasov