Kristalina Georgieva: Bulgaria Is Having Unprecedented EU Funding at Disposal
European Commission Vice President for Budget and Human Resources, has been nominated in the "Politics" category of Novinite's 2014 Personalities in the News poll. Alongside all other nominees, she had been asked to answer three general questions before the poll closed.
Hours before the deadline, Novinite is publishing her answers.
Ms Georgieva, which was in your opinion the main event of 2014?
For Bulgaria, it was the formation of a new government. This was not easy given a year of political instability which hurt the economy and deepened confrontation in society. Regardless of the complex configuration in Parliament, Bulgaria has today a working government. Parties in the cabinet realize the need of stable governance, they have joined hands for the well-being of Bulgaria and aware working to solve long-standing problems. It is very important they they continue in the same fashion to make up for the time that was lost. They should set out priorities and work for them. They should also carry out the reforms that push the country forwards - judiciary, healthcare, pension, educational reforms. The European Commission is here to provide assistance to Bulgaria so that these reforms are successful and lead to positive changes in people's lives.
From a more general European perspective, I would point out the new EU Commission with President Jean-Claude Juncker taking over and the new European Parliament's role in electing the Commission's President. The new team came with the energy to make changes and the decisiveness to face one of Europe's problems that have gathered head: the lack of investment and growth. Within an unprecedentedly short period we unveiled the Investment Plan for Europe, whose purpose is to wake up the money in banks to pour it into the economy and push it forward after the long years of stagnation. For me it is an honor to be part of this team.
Taking over a new position within the EU Commission, what was the biggest challenge for you?
The biggest challenge for me is to have each euro from the EU budget spent in the best way for citizens. We live in in times of restrictions and this directly affects the European budget. Money is not enough - today the union's budget is 3.4% smaller than in previous years, and the need of European financing is bigger as a result of the crisis. The only way to cope with these new conditions is to boost the efficiency of the programs we support.
We already began directing the budget to projects with a bigger multiplicative effect which could lead to better results. An example is the Investment Plan, also known as the "Juncker Plan". With its help we direct EUR 16 B from the EU's budget and EUR 5 B from the European Investment Bank to the European Fund for Strategic Investments [EFSI]. The aim is to mobilize EUR 315 B of fresh resources which could stimulate growth in the EU.
In Bulgaria we have successful examples of efficient use of EU financing. Such a project is the Sofia Metro - it creates jobs, allows employees to move more easily across the city, it is environmentally friendly. At the same time companies working on its realization gather valuable experience which makes them competitive while carrying out such projects both at home and abroad. Well in the beginning of my term I would like to point to such projects across Europe and encourage member states to direct their effort to similar initiatives.
It is very important that we preserve the European budget from abuse. Much work has already been done in that sense - estimates of the independent audit suggest as little as 0.2% of our budget fall victim to fraud. But this is still 0.2% beyond what we can afford, because this is money Europeans pay with their work - they work four days on the average to get them. We should do everything to make sure 100% of their money contribute to growth, employment and a better life.
Will this year be successful in economic terms?
The EU Commission's economic forecast, which we published recently, foresees growth in all economic policies in this and the next year. This is the first entirely positive perspective for growth from 2007 and is definitely good news to us.
But the forecast growth is still relatively low - 1.7% for EU28 and 1.3% for the Eurozone in 2015, and 2.1%/1.9%, respectively, in 2016. A few positive factors have their impact on these expectations, for example low oil prices and a low currency exchange rate for the euro. However, we also see serious economic and political risks - deflation, the situation in Greece, the war in Ukraine and a number of conflicts close to Europe which are a source of concern.
One of the most worrisome factors is that we are still failing to see substantial and lasting decrease in unemployment. This means that, apart from stimulating growth, we have to mobilize to a full extent the social systems in EU states in the fight against unemployment and growing poverty. To this end, we are relocating funds from the EU budget. For instance, last year we decided to boost the refinancing of the youth employment program to EUR 1 B, up from less than EUR 33.5 M.
For Bulgaria, growth expectations are more modest - 0.8% for 2015 and 1.0% for 2015. They go hand in hand with an expected drop in investment, fewer employed people, low (and even negative) inflation rates for 2015. This has its explanation. The country's economy has suffered from political instability, besides it is narrowly linked with economies of the other member states - it is necessary that they start working if the effect is to be felt here.
Within this complicated context Bulgaria has to do everything to make maximum use of EU funds. Currently the country has access to a historic amount - a total of EUR 9 B from the previous program period in 2007-2013 and EUR 32 B for the time up to 2020. This is money for social programs to help the needy, for youth employment, for transport infrastructure, for science and education, for municipal projects, for agriculture, to support entrepreneurship.
Bulgaria holds a huge interest in actively participating in the Juncker Investment Plan. The country could make use of the combination of investment financing - money and project preparation - and expertise to identify and remove obstacles for investors. I am looking forward for tight cooperation between public institutions and the private sector so that part of these EUR 315 B could be drawn onto Bulgarian soil. I also hope we will see results like higher employment and higher income for as many Bulgarians as possible.
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