site.btaEU Expects Bulgaria to Finalise Reviews of Banks, Insurance Companies, Pension Funds by End-2016

EU Expects Bulgaria to Finalise Reviews of Banks, Insurance Companies, Pension Funds by End-2016

Brussels, July 12 (BTA Correspondent Nikolay Zheliazkov) - The EU Council adopted Tuesday recommendations to the separate member states regarding their programmes for reforms.

Four recommendations have been addressed towards Bulgaria. By the end of 2016, the country should finalise the asset quality review and stress tests of the banks, the insurance companies and the review of private pension funds' assets. The country should take, as necessary, follow-up actions in all three sectors and continue to improve banking and non-banking supervision, reads the text of the recommendation.

According to the EU Council, the country should achieve an annual fiscal adjustment of 0.5 per cent of GDP towards the medium-term budgetary objective in 2016 and in 2017. The country should further improve tax collection and take measures to reduce the extent of the informal economy, including undeclared work.

The recommendation towards Bulgaria involves reinforcement and integration of social assistance, including relevant social services, and active labour market policies, in particular for the long-term unemployed and young people not in employment, education or training. Bulgaria should increase the provision of quality education for disadvantaged groups, including Roma. It should also improve the efficiency of the health system by improving access and funding, and health outcomes. In consultation with social partners it should establish guidelines and criteria for setting the minimum wage and increase the coverage and adequacy of the minimum income scheme.

The EU Council recommends to Bulgaria to reform the insolvency framework to accelerate recovery and resolution procedures and improve their effectiveness and transparency. The country should also increase the capacity of the courts regarding insolvency procedures, strengthen the capacity of the Public Procurement Agency and contracting authorities and speed up the introduction of e-procurement.

The document points out that Bulgaria made some progress in addressing last year's recommendation to make its healthcare spending more efficient. In spite of recent efforts to improve tax collection, the shadow economy remains a significant challenge affecting public revenue.

While signs of macroeconomic recovery and gradual reduction of unemployment are observed, very high 'at-risk-of-poverty or social exclusion' and inequality levels remain in Bulgaria. A better outreach to the target groups, while maintaining fiscal responsibility, would help to alleviate poverty, reads the text.

Unstable policies and lack of trust in key public institutions, such as the judiciary, constitute significant deterrents to investment in the Bulgarian economy, according to the Council. Frequent changes to the legal framework create uncertainty and affect the businesses environment. Corruption remains a significant concern and the national authorities' response to this problem continues to be hampered by weak and fragmented institutions, the document says.