Continued reforms was the key message of Deputy Prime Minister and Finance Minister Simeon Dyankov’s address to the fourth annual meeting of Government and business organised by Kapital weekly and the Confederation of Employers and Industrialists in Bulgaria on November 3.

Work in that sense would have to be done on several fronts, but the immediate priority was to adopt a balanced Budget for 2010 and balancing the books on this year’s Budget.
Increased revenue and spending cuts generated a Budget surplus in October, which served as proof of the political will to pursue prudent policies, he said.

"This gives me reason to believe that this successful fiscal policy will give Parliament reason to adopt the 2010 Budget as quickly as possible and would give a clear sign to Bulgarian and foreign businesses, as well as the European Commission and the International Monetary Fund, that Bulgaria is pursuing the most stable fiscal policy not only in Central and Eastern Europe, but also the safest policy in the European Union," he said.

It was an ongoing process that would take more than just the next 100 days, Dyankov said, but the ultimate goal was to join the eurozone as soon as possible.

The October surplus was the first result of increased revenue collection that followed the linking of the databases of the National Revenue Agency and the Customs Agency. But smuggling in Bulgaria was "huge" and another ongoing struggle that the Cabinet would pursue relentlessly throughout its term.

"We would need more than 100 days to root out smuggling in Bulgaria, but we must make it clear to the people involved in this illegal business that they will either have to come clean or they will have to drop out," Dyankov said.

Public administration reforms would continue beyond the 15 per cent cut in personnel, he said. The focus will be on "functional analysis", meant to identify areas that needed strengthening, such as auditing and EU funds management, but also which institutions were redundant or could be merged to increase efficiency, he said.

One area of immediate concern was the Post-privatisation Control Agency, which was not working properly and should be either merged with the Privatisation Agency or restructured in some other way.

"It should not be just the business that feels the impact of the crisis, the state administration must feel it too and become more responsible with the way it spends taxpayers’ money," Dyankov said.

Another area in need of a complete overhaul was the management of state property, given that the state has not shown itself to be a good manager so far, he said. Worse, often the state hampered the private sector, as was the case of public tenders won by state-owned firms – the Finance Ministry-owned firm Information Services winning a tender called by the ministry, for instance.

A radical solution would be transferring most state-owned companies to a newly-set-up agency to eliminate conflicts of interest, although no decision had been made about this. "We talked a lot about different cases over the past 100 days but now we must think of a complete overhaul, rather than address it using a case-by-case approach," Dyankov said.

The Public Procurement Act, which has often come under criticism for numerous loopholes, would be amended, with a bill to be presented to Parliament within the next 100 days. It would include provisions that would make it easier for small firms to bid in public tenders.

The way that the previous government spent taxpayers’ money was far from transparent and some contracts, including privatisation and concession, were not available for review by the National Audit Office. Increased transparency would be pursued by making more information available to the public, starting with the Finance Ministry, Dyankov said.

Beyond reducing the mandatory social security contributions by two percentage points next year, the ministry was working on proposals to further reduce the burden on businesses and had no plans to increase taxes.

These proposals included the quicker ammortisation of certain types of assets, such as computers and buildings, and a "golden register" of firms that would enjoy faster value-added tax refunds.

The Cabinet would seek new funding for infrastructure projects, including in the environmental sector, where Bulgaria was lagging behind its neighbours, in addition to the road infrastructure, which Borissov identified as one of the priority areas of his government.

Health care reform was another area where the Cabinet had little to show for its work, but within the next 100 days the Cabinet would table its amendments to the existing legislative framework, Dyankov said.