Businesses, Trade Unions Clash over Bulgaria's Draft Budget 2014

Hasan Ademov, Bulgaria's Minister of Labor and Social Policy, photo by BGNES

The proposal to increase the monthly minimum wage as of 2014 caused division among trade unions and employers at Tuesday's sitting of National Council for Tripartite Cooperation.

The meeting was devoted to the draft state budget and the budgets of the National Health Insurance Fund (NHIF) and the budget for public social insurance in 2014, according to reports of investor.bg.

Representatives of employers' associations opposed the proposal of the government for an increase in the minimum wage from BGN 310 to BGN 340 as of January 1, 2014, while trade unions backed the idea.

The two sides also failed to reach agreement on the proposal to increase the maximum insurable earnings to BGN 2400 as of July 1, thereby increasing the maximum pension from BGN 770 to BGN 840, with employers opposing the step and trade unions describing it as "timid."

Konstantin Trenchev, President of the Podkrepa Labor Confederation, noted that trade unions backed the idea to increase the minimum wage as of 2014 but insisted that a mechanism had to be prepared so that the minimum wage could be calculated automatically on an annual basis instead of the amount depending on ministerial and partisan vows and attitudes.

Meanwhile, representatives of employers' associations expressed fears that the step would give a boost to grey businesses just at the point when the efforts to stem illegal businesses were yielding results.

Bulgaria's Labor Minister Hasan Ademov, as cited by dnevnik.bg, made clear that the budget of the Ministry of Labor and Social Policy for 2014 was the biggest for the past 23 years at BGN 1.061 B, and emphasized that all social payments had been guaranteed.

Ademov described state budget 2014 as a budget which was to guarantee the disbursement of social payments which had been frozen over the past four years and which would ensure a higher level of social protection of Bulgarian citizens.

As regards criticism over the lack of a mechanism for calculating the minimum wage, Ademov explained that the Ministry had developed a mechanism a long time ago but it had not been backed by employers or the Finance Ministry.

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