12.04.2012

The MoF has sent to the European Commission the 2012 update of the National Reform Programme implementing Europe 2020 Strategy and the Convergence Programme (2012-2015). Thus the Government has observed the requirements of the European semester for enhanced economic policy coordination, under which EU Member States should send those programmes by mid April of the relevant year.

Both Programmes - the National Reform Programme (NRP) and the Convergence Programme (CP) - were adopted by the Council of Ministers on 11 April 2012, together with the approval of the basic assumptions and the 2013-2015 budget forecast and the adoption of FLSU (municipalities excluded) 2013-2015 expenditure ceilings. That confirms the Government commitment to follow prudent and growth-friendly fiscal policy in line with the guidelines contained in the 2012 annual growth survey. The thus ensured consistence between the two Programmes allows to directly address Bulgaria's commitments under the Euro + Pact for enhancing competitiveness, employment and public finance sustainability.

The NRP 2012 update identifies the measures addressing the recommendations of the Council of the European Union of 12 July 2011 for the national objectives and sustainable economic growth factors achievement. The national objectives defined in the 2011-2015 NRP have been maintained in the present update. Improving the infrastructure, attracting investments, competitive youth, favourable business environment and raising the confidence in state institutions continue to be priorities of the economic policy.

The Convergence Programme (2012-2015) has been drafted in accordance with the provisions of the Treaty on the Functioning of the European Union regarding the requirements ensuing from the multilateral fiscal surveillance within the framework of macroeconomic policies coordination in the EU. It addresses the parameters of fiscal policy sustainability in accordance with the Stability and Growth Pact prescriptions, and at the same time outlines the path towards achievement of the Maastricht criteria for Euro area membership.

The CP focuses on the main macroeconomic policy parameters with key priorities - implementing conservative and disciplined fiscal policy, ensuring long-term stability of public finances and allocating the public expenditures to activities aimed at stimulating and accelerating the economic growth. The main fiscal policy objective is not only to maintain the general government deficit below the threshold of 3% of GDP during the programme period, but also to balance the budget by 2015.

Important elements of the economic policy are also implementation of reforms in the pension and social security system, which will ensure long-term stability of public finances in an environment of an aging population; ensuring that wage growth better reflects developments in labour productivity; implementation of administrative reform, including through the introduction of new performance-based remuneration of public servants; unchanged tax policy.

The documents have been drafted by the Ministry of Finance in close cooperation with line ministries and state agencies, and the Bulgarian National Bank, and in constant consultation with EC representatives. The social partners, academia and non-governmental sector representatives have also participated in the NRP drafting. Their comments and recommendations expressed during the public consultation on 27 March 2012 have been reflected in the Programme.