Although 2020 ended less than a week ago, the consequences of the Covid-19 crisis that marked it, will have a long effect on the mental, emotional and especially the financial well-being of Bulgarians and of all other nations in the world. We must not forget that coronavirus remains among us and despite the vaccination, it is still unpredictable and dangerous. Another event that will have effect on everything that awaits us this year is the official separation of Great Britain from the EU. Not coincidentally, in an interview with the BNR Horizont program, former Finance Minister Simeon Djankov predicted that 2021 would be a year of uncertainty.

"I know that last year was difficult for many businesses and sectors and people are probably tired of it. In reality, however, the coming months will be like the previous, because on the one hand there are difficulties with redistribution of the vaccine, and on the other - investments in Bulgaria have shrunk by about 60% and I do not think there are any buffers left in the business. So far, thanks to them, as well as to the successful policy of the BNB in terms of resources in the banking system, most bankruptcies have been avoided. There are several more difficult months ahead for all sectors, because our major trading partners (in Germany, Great Britain, etc.) are closing again one by one.

The former Minister of Finance in the first cabinet of Prime Minister Boyko Borissov still praised the fact that Bulgaria was the country with the lowest deficit in Europe and assessed highly the measures implemented and jobs preserved in some sectors, but said that funds should not be stopped, because the situation of Bulgarian business would remain difficult until the autumn.

According to him, the next government would face the need to update the budget in April or May.

"We hoped that this would only apply to 2020, but we see that the fight against the virus continues. The update in April or May will focus on sector policies, although some of the current state aid mechanisms are already working.”

When it comes to taxes, Djankov is firm that a serious tax reform and changes are forthcoming:

"At the moment when the pension policy changes, a change in the tax policy is inevitable. I do not believe that the next government would start with such a difficult task, but in the next 2 years I expect a serious change in terms of more and higher taxes. It is possible for VAT to change and jump by 2-3%. "

This is a completely possible scenario, as VAT revenues account for 60 - 65% of all tax revenues.

The effects of Brexit will also have their impact. Our compatriots who live and work in the UK are about 300,000 people. Simeon Djankov expressed confidence that some of them would return to Bulgaria, which would create difficulties in the beginning both in the budget and in finding new jobs. However, he believes that with their knowledge and skills, Bulgarians who return will quickly begin to support the economy and this will be visible soon.

Editor: Yoan Kolev /based on an interview by Snezhana Ivanova, BNR- "Horizont"/

English: Alexander Markov