Bulgarian EU Commissioner: Politics, Retirement Fund Don't Mix

Bulgaria's EU Commissioner for International Cooperation, Humanitarian Aid and Crisis Response, Kristalina Georgieva. Photo by bGNES

Bulgaria's cabinet must seek professional advice for the management of the Silver Fund which is part of the fiscal reserve, according to the country's EU Commissioner for International Cooperation, Humanitarian Aid and Crisis Response, Kristalina Georgieva.

Speaking for Darik radio Saturday, Georgieva stressed that the Fund must be managed by people, who are independent from political decisions, and with the help of experts. She proposed to the cabinet to benefit from the experience of the World Bank where the retirement fund is overseen by independent experts in such aggressive way that there is plenty of money for everyone over the age of 50 to retire.

The EU Commissioner further pointer out the need to look for larger diversification of the resources in the Silver Fund, such as some of them being invested in State securities and having an aggressive and a conservative portion in the portfolio.

"We must be very careful to not put all our eggs in one basket. The aggressive part must be divided with great care – wealthy people all over the world are now very attentive when they invest," she said, adding that regardless of Bulgaria's good credit rating, the country is dependent on what is happening in Europe.

Regarding the thorny issue with bonuses for State servants, Georgieva stated that in successful administrations employees earn good money, but they work to the max and there is no need of additional incentives.

According to the Commissioner, the bonus scandal would end up being beneficial if it leads to acceleration of the retirement reform.

Bulgaria's Deputy Prime Minister and Finance Minister, Simeon Djankov recently proposed changes to the governance of the Silver (Retirement) Fund that would enable a more active management of the collected funds and the investment of up to 70% of it in government securities.