EKIP– Expert Club for Economics and Politics A Different Opinion
Yesterday, the more left-wing of the two major unions – the Confederation of Bulgarian Trade Unions – brought its members to parliament to protest against changes to the pension system and a number of other elements of the budget that they disagree with. Of course, the aim of the union pressure is to give more money to a certain group of workers, which will be paid by the rest of society. Let’s look at the details of the declaration point by point for a more in-depth look at the demands:
1. Restoration of the forfeited right to receive back the tax paid to workers with incomes equal to the minimum wage for the country;
This is a rather good idea – the fewer people who have to become tax serfs of the state, the better. The problem comes from the fact that at the same time many of the recipients of the credit willingly use various “social” privileges that the rest of us pay for. So let there be a tax credit, but let it not come with a free lunch.
2. Immediate adoption of the legal norm criminalizing the evasion of social security contributions in order to increase guarantees for workers' rights and secure additional financial resources of 200 million leva.
Absolutely terrible idea! Making it a crime that a large number of people are aware of how their insurance is going into a bottomless pit and therefore refuse to pay is extremely stupid. Back in 2009, Krasen Stanchev called for us to be able to exit the system – neither to pay it nor to receive its “services”. Each individual should be free to decide for themselves whether to suggest themselves and how, and not be obliged to pay for the eternally deficit budget of the NHIF. And in the heads of the CITUB activists, prison is spinning as a solution…
3. Introduction of the financial transaction tax, which will generate additional budget revenues of 200 million leva to support spending policies with a social purpose - underfunded measures in education and employment.
This proposal is an old red classic – hit all the people who use banking services to finance redistribution to your electorate/lobby center. Not to mention the burden on companies who will have to pay yet another tax – thank you unions for making sure ( once again) that people have jobs and that businesses create value.
Moreover, there is no way that 200 million leva can be seized in a year from transactions that average less than 1 million leva per day. A more realistic figure would be 1-2 million leva, i.e. about 200 times less than the authors of the proposal indicate. In this case, the unions are clearly using deception in an attempt to manipulate public opinion with bombastic, unrealistic figures.
4. Cancellation of the increase in the retirement age in 2015. Development of comprehensive and long-term measures for the development of the pension reform, supported by the maximum possible public and political consensus.
Such a repeal can only lead to one thing – even greater deficits in the pension system, which in reality is absolutely bankrupt – the hole for the last four years has already cost 20 billion leva. And if you look at the state social security expenditures (a significant part of which is for pensions), you will see a constant growth in the deficit .
Fig. 1: Financial status of the Public Service Organization, 2009-2013
Източник: Доклад на НОИ 2014 г.
5. Гарантиране правото, условията и механизмите на ранното пенсиониране, чрез удължаване срока на действие на § 4 от ПЗР на КСО поне до края на 2015г., с цел намиране на справедливо, дълготрайно и поносимо решение.
The reasoning from the previous point applies here . It is evident that the unions aim protection of specific groups (mainly in the public sector) at the expense of the progressive deterioration of the situation with budget finances and the transfer of debts to the younger and working people.
6. Refusal to cut the financial resources for the maintenance and effective functioning of institutions with control functions and working on the "field", which provide services and/or social protection to citizens and companies.
This proposal sounds like "there should be something for us too", because who else but the unions could socially protect citizens and companies. How would you even work without the unions receiving millions (either from EU funds or in other ways) ?
As the president of the CITUB himself mentioned, the protests are not aimed at bringing down the cabinet. They are simply flexing their muscles in an attempt to pressure the politicians from the quadruple coalition. The great danger comes from the fact that if the ruling party listens to them once, they will put public finances on the debt slide, which we have actually already started (next year we will hit state debts of 30% of the gross domestic product). And this scenario is great for any union: a crisis in which they can unite the working masses… which they themselves have brought into the crisis. Just look at Greece.
