Peevski's Controversial Proposal for State-Owned Grocery Stores Passes in Bulgaria's Parliament

Politics | March 21, 2025, Friday // 10:23
Bulgaria: Peevski's Controversial Proposal for State-Owned Grocery Stores Passes in Bulgaria's Parliament

Bulgaria's Parliament has approved the creation of a state-owned chain of grocery stores in post offices across the country, based on a proposal by Delyan Peevski, sanctioned by the Magnitsky Act, leader of the "DPS-New Beginning" party. The idea aims to offer products exclusively from Bulgarian producers, with a maximum markup of 10%. The new enterprise will fall under the Ministry of Agriculture and Food, and the government must take steps to establish it within a month. The initiative is seen by critics as an effort to control voting in rural areas, particularly targeting small settlements.

The decision was made during the debate on the 2025 state budget, which also saw the continuation of discussions about fiscal policies. The budget proposal includes a plan for private companies to contribute to the public budget through donations to support infrastructure development. The expected revenue from these donations is projected to be between 50 and 80 million leva. Despite calls from the restaurant industry to reduce the VAT rate to 9%, the MPs did not engage in discussions on the matter, and the VAT rate remains at 20%.

During the lengthy parliamentary debates, Finance Minister Temenuzhka Petkova defended the budget proposal, addressing concerns from the opposition. She pointed out that the donations from private businesses were a tax incentive discussed with corporate sectors. However, opposition parties, including "We Continue the Change" and "Revival," criticized the proposal to lower the VAT registration threshold from 166,000 to 100,000 leva, warning that it would negatively impact small businesses. Furthermore, the opposition questioned the creation of a state-owned grocery chain, with some arguing that it represents a "non-market approach" and could lead to inflation, similar to other failed state initiatives.

The controversial budget also includes a provision allowing Bulgaria to incur new debt of up to 18.9 billion leva for 2025. Petkova explained that this figure reflects the financial situation inherited from the previous government. However, opposition figures such as Asen Vassilev and Martin Dimitrov argued that reducing the debt limit would free up funds to cover the budget deficit and refinance existing obligations.

In addition, several other amendments were proposed during the marathon session, which lasted nearly 24 hours. Some lawmakers, including Lyuben Dilov from GERB, suggested reallocating funds within the Ministry of Culture’s budget, reducing spending on performing arts in favor of archaeology. Meanwhile, Toshko Yordanov from TISP proposed reducing the Constitutional Court's budget to increase funding for education and health care services. However, these proposals were rejected by the majority.

The parliamentary session also saw protests from public sector workers organized by the Confederation of Bulgarian Trade Unions (CITUB), demanding higher wages. The protestors gathered outside the Parliament building as lawmakers continued their budget discussions.

As the session concluded, Minister Petkova acknowledged that the 2025 budget could have been improved under better circumstances but expressed hope that future efforts would lead to a more robust budget in 2026, particularly as Bulgaria strives to meet the criteria for entering the eurozone. Despite the long and contentious debates, the majority of the proposed amendments were not adopted, and the budget for 2025 was passed in its current form.

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Tags: Peevski, grocery stores, budget

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