“Early Parliamentary elections would not influence negatively the Bulgarian economy. Moreover, the caretaker cabinets usually do a better job”, commented several days ago economic expert and Chairman of the Institute for Market Economics Krassen Stanchev for a Bulgarian newspaper. In his view, the early elections have to be held as early as possible, because expectations of such date back to June 14, 2014 when the dubious appointment of Delyan Peevski to head the State Agency for National Security caused massive street protests. How political crisis and instability influences the Bulgarian economy and how governments could affect economy? Here is more from economic analyst from Industry Watch consulting company Lachezar Bogdanov.

“Unfortunately, last year we failed to form a stable government and the political space was divided. Therefore, the current cabinet lacked strong and clear support. It had to make some economic reforms after the global economic crisis, in order to improve the business climate, the investment climate and create proper conditions for new jobs. However, it happens quite difficult in the absence of economic stability. This is the huge challenge and the government did little over the past year.”

Bulgaria again faces early elections. This country again witnessed new waves of protests soon after it shook off the massive protests against the high electricity bills which led to the resignation of GERB cabinet. The cabinet headed by Premier Plamen Oresharski has been under street pressure for over 300 days now. The elections on May 25 which had to send Bulgarian representatives to the European Parliament have actually put an end to the Bulgarian National Assembly. The election results have again restructured the political map and the early Parliamentary elections became topical.

“Apparently we have to look for a solution. Currently the country is in a standstill”, says Mr Bogdanov. “Everyone is waiting to see what will happen. There are many serious problems in the healthcare system, the power engineering field, the pension system and the economy as a whole such as issues regarding the lack of foreign investments, new jobs, etc. However, the current government can not act, because it lacks support.”

The National Assembly decided to issue a new state debt to the tune of EUR 1.493 billion. Will this new debt threaten the economic and the budget perspective of this country in the nearest future? The economic expert from Industry Watch does not share similar fears, because this loan was calculated in the state budget in advance. In this sense, we can not speak of a new debt, because we have been all aware of it since end 2013 when the 2014 state budget was adopted. In his view, Bulgaria could face problems, if financial stability deteriorates, the cabinet is weak, the state fails to collect enough revenues, the state administration is weak and the budget deficit is high.

When foreign media talk about Bulgaria, this country is often described as the poorest EU member state. What should Bulgaria do to get rid of this humiliating image?

“This is a problem of the media which always look for impressive headings and usually finds them in European rankings. The difference between Bulgaria and Romania is practically very small and if we use different criteria, it may turn out that Romania places after Bulgaria in the rankings. At the end of the day, the latter is used mainly as a label. The only way to remove such labels is to make brave reforms which would lead to a better economic development”, concludes Lachezar Bogdanov.

Mr Bogdanov does not rule out the possibility of another unstable and fragmented government after the forthcoming early elections.

English version: Kostadin Atanasov