Plevneliev Brags on CNBC about Bulgaria's Fiscal Stability, Economy

Diplomacy | September 24, 2012, Monday // 20:48|  views

Bulgarian President Rosen Plevneliev during his video interview for CNBC.

Bulgarian President Rosen Plevneliev has bragged about Bulgaria's fiscal stability and the benefits of its taxation system in an interview for US TV channel CNBC.

Free market reforms and a flat tax rate have helped transform Bulgaria into an island of stability in Europe, a region under siege because of the euro zone's debt crisis.

Bulgaria's budget represents just 36% of its gross domestic product compared with 55 percent in France, Bulgaria's President Rosen Plevneliev told CNBC's "Squawk Box" on Monday.

Plevneliev, who is in New York for the United Nations General Assembly meeting of world leaders, said that his Bulgaria's policies aim to encourage private sector development over government intervention.

"We believe the private sector by it definition is more effective than the public one," Plevneliev said. "Because of that, we leave the money to the private sector," he added.

The Bulgarian economy also benefits from a competitive tax regime, the leader said. Its tax rate is a flat 10 percent on both individuals and corporations — an idea that often surfaces in the U.S. as part of tax reform discussions.

"By reducing taxes, we have improved and increased the income of the state," Plevneliev said.

CNBC points out that by comparison to other debt-laden countries, Bulgaria is in solid fiscal shape. It's debt totals USD 5 B, or 16% of GDP, and it is running a budget surplus.

Bulgaria is not a member of the 17-nation club that uses Europe's common currency, and recently suspended plans to adopt the euro by 2015.

But most importantly, Plevneliev said the economy is growing, the US channel notes. "It's 1.3, 1.5%," he said. "Next year, we're planning 2%."

Unemployment is also moving in the right direction and is on trend to reach 9% from about 11% today, the country's president said.

Bulgaria is helped by a growing technology sector that has matured since the decades it spent under Soviet domination, before the former USSR was dissolved.

"During Soviet Communist times, Bulgaria was the Silicon Valley of the Soviet Bloc," he said. "Even now we have a vibrant IT cluster and start-up culture,"

Bulgaria has also embarked on a host of tough economic reforms, including pension and education reform, among others, according to Plevneliev.

"If you are capable of taking tough decisions and you can prove that you can perform, markets will trust you and investors will do the same," he said.

Even amidst Europe's difficulties, Plevneliev described himself as firmly pro-Europe.

"Europe has a bright future. A more integrated Europe— a world economic power, but also a political power" is worth fighting for, he said.

Bulgarian President Rosen Plevneliev's video interview for CNBC can be VIEWED HERE

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Tags: fiscal stability, flat tax, Rosen Plevneliev, Bulgarian President, euro zone, Eurozone, euro adoption, euro, GDP, economic growth


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