Bulgarian Ethnic Turkish Party 'Pessimist' on Fiscal Stability Pact

Finance | June 1, 2011, Wednesday // 20:40|  views

Movement of Rights and Freedoms front bench MP Aliosman Imamov. Photo by BGNES

The Bulgarian ethnic Turkish party - the Movement for Rights and Freedoms - might not back the so-called "Financial Stability Pact" proposed by the cabinet over what it sees as severe drawbacks.

Wednesday the liberal party MP Aliosman Imamov stated his parliamentary group is deeply "pessimistic" about the proposal, but has not yet formulated its final position.

The program, involving constitutional amendments to cement the country's fiscal policy, is set for plenary debate Wednesday amid speculations whether it will garner the 3/4 majority needed to change Bulgaria's constitution.

The Stability Pact previews introducing the requirement of 2/3 majority in parliament for changing taxes in Bulgaria, introducing a limit to the budget deficit (2%), as well as restricting the power of the state to redistribute public funds (40% of GDP).

Wednesday the Movement's Imamov argued that enshrining this in the constitution will severely tie the hands of Bulgaria's governments in reacting to the viccisitudes of a changing economic situation.

"The amendment eliminates the role of tax policy as a regulator of economic processes at times of crisis," stated the MP.

"Our second fundamental worry is that, combined with a currency board, the Pact will adversely affect Bulgaria's prospect for growth," explained the liberal MP.

Imamov recalled that the Movement for Rights and Freedoms extensively participated in consultations carried out by the Pact's mastermind, FinMin Simeon Djankov, but did not take part in its final formulation.

"Given our deep misgivings, we are rather pessimistic about the Financial Stability Pact, but have not yet chosen our final stance," stated Imamov.

With 35 MPs, the Movement is the third-largest political group in Parliament. The second-largest, opposition Bulgarian Socialist Party (40 MPs) has already stated it will vote "against" the proposal.

The rightist Blue Coalition are divided as to their support, with 9 UDF MPs likely to second the motion, and the remaining 5 DSB MPs likely to oppose.

Apart from its 117 MPs, the center-right GERB ruling party can rely on at least some of the 17 non-aligned MPs. The support of the 17 nationalists from Ataka is more problematic.

The Bulgarian Constitution requires a 3/4 qualified majority to be amended, meaning 180 MPs out of 240. Thus 61 MPs are sufficient to block the motion.

In the event of the Socialists and DSB voting against (45 MPs total), the position of the Movement of Rights and Freedoms will be crucial for the fate of the Financial Stability Pact.

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Tags: Bulgarian Parliament, Simeon Djankov, Financial Stability Pact, Bulgarian Constitution, Bulgarian Socialist Party, UDF, DSB, GERB, Blue Coalition, Ataka, Aliosman Imamov, Movement for Rights and Freedoms, currency board, growth, taxes, fiscal policy, tax policy, budget deficit


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