Bulgarian PM Insists in Berlin on EU Benefits for Fiscal Discipline

German Chancellor Angela Merkel (CDU) welcomes Bulgarian Prime Minister Boiko Borisov (L) at the Federal Chancellery in Berlin, Germany, 18 January 2012. EPA/BGNES

The EU does not stimulate in any way the fiscally responsible countries such as Bulgaria, Bulgarian Prime Minister Boyko Borisov complained before German businesspeople at a meeting with the German Committee on Eastern European Economic Relations.

Borisov, who went to Berlin for talks with German Chancellor Angela Merkel Wednesday, has reiterated his earlier complaint by stressing that EU member states who failed to obey the Union's fiscal requirements have been entitled to much smaller share of co-financing for EU funded projects, while Bulgaria, which has the lowest GDP per capita and is fiscally responsible, has to co-finance a lot more.

"You are not stimulating us to be financially disciplined," Borisov told the German Committee on Eastern European Economic Relations, stressing that he will insist before Merkel that Bulgaria too is entitled to co-finance EU funded projects with only 5% like Greece, and Portugal, and not with 20%, as it is at present.

"What am I supposed to tell the opposition when they ask me why we need to obey strict fiscal discipline? Bulgaria is one of three countries in the EU with the best fiscal discipline. In spite of that, it turns out that it's better to have a high public debt and budget deficit because they you get support," Borisov complained in Berlin, as cited by Focus.

"Your comments will be very interesting for me. I am in a tough spot with my opposition. We don't demand any additional money, just equal conditions in EU funding for the most disciplined states and the most troubled states," he explained.

"Because it turns out it is better to be a populist, to raise the debts and deficit, instead of keeping the requirements," he added.

According to Borisov, if Bulgaria is allowed to co-finance EU funded projects with only 5% of the total sum, that will allow the Bulgarian government to redirect about BGN 500 M to other spheres.

Borisov's meeting with the German Committee on Eastern Economic Relations also focused on investments, green energy, and e-government, among other topics.

As early as December 2011, there were reports that Bulgaria, the poorest EU member state, feels cheated as the EU institutions were to approve a new policy allowing six other member states, which are struggling financially, to be able to co-fund projects with much less money.

 

The European Commission proposed last summer to increase the EU co-financing in cohesion, fisheries and rural development policies for countries that have received financial assistance under the balance of payments support mechanism - Romania, Latvia and Hungary - or under the European Financial Stability Facility - Greece, Ireland and Portugal.

For example, the EC will provide a maximum of 95% project financing in the case of Greece – from a previous 78% .

The Greek government would not need to provide the 15% usually requested to member states, but only up to 5% of the cost of a project.

Although Bulgaria is the poorest EU country, it is excluded from the beneficiaries because its macroeconomic indicators are stable.

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