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Bulgarian government redirects funds to help the poor

Reuters Translate This Article
28 March 2013

SOFIA (Reuters) - Bulgaria's interim government, installed after the previous administration was toppled by large-scale protests about poverty, will create new jobs and help the poorest with their energy bills ahead of elections.

The government said on Thursday it would find the money by redirecting 41 million levs ($27 million) from day-to-day expenditure by ministries and spending on new highways.

However, it ruled out more borrowing so as not to risk its currency peg to the euro, the centrepiece of the country's economic policy.

The moves are the latest attempt by the caretaker administration to placate the public before they go to the polls in May, but the inhabitants the European Union's poorest country are still angry at high utility bills and rampant corruption....

Although demonstrations eased after the interim government was appointed in mid-March, they could but could erupt again if it fails to deliver on people's demands for better incomes and stricter controls over energy monopolies.

'The bulk of the money will go to existing government employment programmes, so that people can quickly benefit from them,' interim Labour Minister Deana Kostadinova told reporters.

The measures are unlikely to significantly ease the economic hardship in the Balkan country, where the economic crisis has erased 400,000 jobs since 2009.

Bulgaria is targeting a fiscal deficit of 1.3 percent of gross domestic product in 2013, one of the smallest in the EU, which protects the country's finances but comes at the expense of living standards that are less than half of the EU's average.

Unemployment rate jumped to an 8-year high in February to 12 percent with business saying that the actual rate was over 18 percent as some have been discouraged from looking for work.

Kostadinova did not say how many new jobs will be created but officials have suggested the plan was to help 25,000 low skilled workers who were hit hardest after a construction and real estate bubble burst in 2009.

Financial aid to help cover energy bills will be extended to about 36,000 families in the country of 7.3 million people as well as to disabled children.

Kostadinova said she hoped the first payments can be made in early May.

Bulgaria has already cut electricity prices by 7 percent from March and has asked the European Commission to help it carry out a survey in the energy sector to boost transparency and advise it how to speed up the liberalisation of the market.

($1 = 1.5302 Bulgarian levs)

(Reporting by Tsvetelia Tsolova; Editing by Toby Chopra)

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