A Letter from Sofia

Economic News

22 Jul 2010
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As Europe's only monarch-turned-prime minister, Simeon Saxe-Coburg's political career has been anything but conventional. It should therefore have come as little surprise to find him stepping outside common practice once again last week, when he took up several pages in a leading daily newspaper to explain his vision of Bulgaria. In his "Open Letter to the People", he set out his government's successes and failures, concluding that "an improved reality is no longer a dream". The letter caused much debate among politicians and public, while also serving as a useful trigger for a wider assessment of the ruling New Movement Simeon II (NMSII)'s three-year record. Whether this assessment turns out as Simeon intended, however, seems a little doubtful.



The letter, published in Trud on July 17, made a number of promises. One of these was the removal of the prime minister's name from the title of the ruling party. A sign of changed ambition perhaps, reinforced by another announcement that he had no intention of running for president. He will, however, be looking for a second term in office at next year's general elections - though without some of those who came with him in 2001.



"Particularly with reference to next year's elections," he wrote, "I would like to assure you that thanks to experience gained, I will exercise personal control over the allocation of the future party tickets. People who place their personal interests before those of the country, as well as political chameleons, will be removed from the lists. You can be assured that I am fully aware of the qualities and shortcomings of those whom I trusted three years ago."



The prime minister also promised to boost wealth creation, fight unemployment, corruption and poverty, and improve education and health care. In short, it was a list of priorities aimed straight at the ordinary Bulgarian voter, rather than at the International Monetary Fund or the market. And, as many commentators pointed out, the populace was an unsurprising target, given the spectacular unpopularity of the NMSII since its swept into office in 2001.



It has often been lamented by the prime minister's supporters that while his government has implemented many of the kind of reforms that win praise from international financial institutions and market makers, Bulgarians themselves have been far more damning of the administration's record. Well aware of this, the opposition parties were not about to give the prime minister an easy time over his letter either.



In fact, Nadezhda Mihailova, leader of the Union of Democratic Forces (UDF), accused the prime minister of using the letter to avoid a real debate in parliament on his record.



Meanwhile, Rumen Ovcharov, deputy leader of the Bulgarian Socialist Party (BSP) and the parliamentary Coalition for Bulgaria, called Saxe-Coburg "the founder of a new trend in political demagogy - naive or primitive populism".



So, where does the record stand? In his letter, the prime minister could point to a number of noteworthy achievements. Sustainable economic growth has continued since 2001 and is one of the highest in Europe. The unemployment rate has fallen from 19.3% in 2001 to 12.6% in 2004, with Sofia now possessing one of the lowest jobless rates in the continent, at 3.6%.



Meanwhile, purchasing power has also grown, according to the premier. "In the last five months alone," he wrote, "consumption has increased by 18%." As an example, "the number of imported cars has increased by 40% in the period 2001-2003!"



Saxe-Coburg also pointed to the stable financial position of the country, saying that the budget deficit had been brought under control. An active process of land consolidation and co-operation with farmers had begun, while the minimum salary had risen 75% since 2001, from Lv85 to Lv150 a month this year. Pensions have also gone up 30%, he said, since he took office.



At the same time, Bulgaria has also closed all the chapters on European Union accession, and is well on course to join in 2007. It has also joined NATO and achieved significant rapprochement with its neighbours. Privatisation has been slow, but is at least happening, while economic restructuring continues to spread.



However, the opposition, naturally enough, disputes this commendable picture. The UDF's Mihailova told parliament on July 23 that the real wage increase over the last three years was just 13%, of which only 3% was due to annual adjustment, while the remaining 10% had come via Christmas bonuses.



The UDF leader also claimed that per capita GDP growth remained low, while 14% of Bulgarians live below the poverty line - a proportion which has remained unchanged since 2001, Mihailova said. She then accused the government of abandoning small- and medium-sized businesses.



Simeon was, however, in confessional mood when it came to the poor state of many Bulgarians' finances.



"It is still hard for many Bulgarians to find a job and still some of them leave the country," he wrote. "I am painfully aware that pensioners in particular can barely afford their needs for medicines and heating, let alone other essentials."



The BSP saw such concern as clearly an attempt to set a left-wing tone to the government's rhetoric in an effort to undercut support for the socialists. This was seen by them as evidence that Simeon is clearly worried he will be cast aside by the BSP when it comes to next year's ballot.



Meanwhile, the Democrats for a Strong Bulgaria (DSB) opposition party, led by former Prime Minister Ivan Kostov, used the opportunity presented by the debate to attack the government's "irresponsible" environmental policy, which, the DSB stated, could end up causing difficulties for the country's final EU accession.



All of which was largely dismissed by NMSII party floor managers, with group leader Stanimir Ilchev calling opposition remarks an indicator of the absence of any constructive criticism in parliament.



Certainly, many ordinary Bulgarians are yet to really feel or appreciate the developments that NMSII has brought to their country, and remain frustrated and occasionally angry about this. On the other hand, the markets scarcely blinked during the debate over the open letter. Saxe-Coburg has shown that he is aware of the problems of the less well off, but he still has a tough task ahead of him in persuading this large group of citizens that it is worth their while waiting for his changes to bring wider benefits.

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