The Chairman of the Board of the Industrial Capital Association in Bulgaria (AIKB), Vasil Velev, has suggested a freeze on pensions and salaries for a year. Speaking to BNR, Velev stated that AIKB is firmly against tax increases and instead advocates for wage freezes and layoffs.

The Tripartite Council is meeting today to discuss the minimum wage for 2025, which, after years of negotiations among businesses, unions, and the government, is now set as a percentage of the national average wage. An increase of 15.4% is anticipated, meaning the minimum wage could rise from the current 933 leva to 1,077 leva starting January 1. AIKB is not expected to back the government's proposal.

Velev criticized the continuous rise in public sector salaries, which he said have been increasing for years, diverging significantly from those in the private sector, where revenue generation occurs. He also highlighted that Bulgaria's population is declining, its workforce is shrinking, and the public administration is expanding despite the billions invested in e-governance.

He stated that AIKB supports a one-year freeze on pensions, acknowledging it as an unpopular measure. Velev pointed to the net replacement ratio, which represents the proportion of a person’s salary received as a pension after retiring. In Bulgaria, this ratio is 70%, compared to the EU and OECD average of 64%.

“In the current situation, our pensions are quite generous. I understand this may sound controversial given their actual amounts. Pensions should reflect insurance contributions; otherwise, it leads to unfairness. We are confusing pensions with social assistance,” Velev said.

AIKB also opposes raising the minimum wage. Velev criticized the formula in the Labor Code, calling it flawed and in violation of international standards. He suggested that if it were challenged in the Constitutional Court, it would likely be overturned.

Velev further warned that nearly half of the workforce might earn the minimum wage next year, stating: “Whether someone has worked or not, is qualified or not, in the end, the income remains the same.”