The proposed Budget 2026 does not bring surprises, as it reflects the development of public finances in the first half of the year and should ensure financing until the end of this year. This was stated in the program “Offensive with Lyubo Ognyanov“ on NOVA NEWS by the former Deputy Prime Minister and current Director of the European Foundation for the Improvement of Living and Working Conditions Ivaylo Kalfin.
“I am not surprised by the parameters, because we are in the middle of the year. This is a budget that should reflect what happened in the first half of the year and ensure funding until the end of it. It is unlikely that any government will have the freedom to implement the policies it considers necessary. The problem is that we are now paying the price for several years of absolutely irresponsible or incompetent management of state finances“, he stressed.
According to him, no new policies can be expected in the current budget, as they must first be prepared through legislative changes. “The second half of the year begins. Policies must first be prepared, legislative changes must be adopted and then they must be reflected in the budget. The opposite cannot happen. The next budgets of this government will be much more interesting - they will show what it really wants to change“, Kalfin pointed out.
Commenting on the expected budget deficit, he admitted that its size is worrying, but not surprising. “Naturally, this amount is shocking, but again it is not surprising. New debts were incurred in previous years as well. What the government is doing now is to bring to light the so-called hidden deficits. This is probably the right approach, because it has a four-year mandate ahead of it and does not want to bear the burden of previous administrations“, he said.
And he gave an example of unpaid debts for road construction and to municipalities, which, according to him, are now being brought to light. He also stressed that this year is the last opportunity for Bulgaria to absorb a significant part of the funds under European programs and the PVP.
Regarding the EC's initiated excessive deficit procedure, Kalfin said that it is in the country's interest: “Just as the currency board imposed financial discipline on us for years, so now the EC will expect us to bring the deficit back below 3%. In my opinion, we can even set a more ambitious goal. We need to strengthen the budget and not enter a risky zone of indebtedness“.
According to him, increasing the maximum social security income is a normal measure when incomes in the economy grow. “The maximum social security income should move along with income growth. Holding it back is not in the interest of those insured, because higher social security contributions subsequently mean higher pension rights. Previous governments held back this change rather for populist reasons“, the former deputy prime minister pointed out.
He also commented on the mechanism for determining the minimum wage: “It is best to have a formula that includes the average wage, but also takes into account other economic indicators. I expect the unions and employers to reach an agreement, because such decisions are best made by consensus, and not imposed unilaterally“.