DEUTSCHE BANK: KING SHOULD EXPLAIN CONTROVERSIAL POINTS IN THE PROGRAM
that Bulgaria's new government will present a new economic program,
cleared of the controversies laid in the pre-election edition, Pari Daily reported.
One of the major controversies, according to Deutsche Bank, is the
goal of achieving balanced budget by cutting taxes, on the one hand,
and simultaneously increasing the social payments, on the other.
These policies cannot be conducted in parallel, the bank says.
Another discrepancy is the willingness to reduce the role of the
state on the one hand, and to deliver preferential credits to
municipalities, on the other. The bank expects the economic team of the Simeon II National Movement /SNM/, which won a landslide victory on June 17, to
reconsider and clarify these controversies. The upcoming
negotiations with the IMF and the World Bank will be an important
indication of the new government's resolve to continue the economic
reforms. Important steps are ahead, including unpopular structural
reforms, which are unlikely to receive a strong political support.
Among these steps the bank lists the upcoming deregulation of the
energy sector, which will lead to a rise in the prices of
electricity, and the privatization of the monopolies, which will
cause an increase in unemployment. The parliamentary group of the SNM is heterogeneous and that may delay the speed of reforms in the first few months after the new parliament convenes, Deutsche Bank points out.
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