site.bta Finance Minister Suggests Two-step Increase in Minimum Wage in 2015

108 ECONOMY - FINANCE MINISTER - MINIMUM WAGE

Finance Minister Suggests Two-step Increase in Minimum Wage in 2015


Sofia, November 30 (BTA) - Finance Minister Vladislav Goranov
(GERB) said in an interview with Bulgarian National Radio on
Sunday he would propose an increase in the minimum monthly wage
in 2015 in two steps, from the current 340 leva to 380 leva.

Goranov is concerned that a sharp increase in the minimum wage
will exert pressure on the labour market. However, the trade
unions and some employers did not show understanding for this
view.

Until now Goranov insisted that the minimum wage should remain
unchanged in 2015, while Labour and Social Policy Minister
Ivailo Kalfin (ABV party) wanted it to increase to 380 leva from
January.

Goranov said he was ready to accept an increase, first by 20
leva from January, and then by another 20 leva from July if
nothing disastrous happens, to 380 leva as suggested by the
trade unions and the caretaker government.

Vladimir Karolev, advisor to Economy Minister Bozhidar Loukarski
(Reformist Bloc) said on Bulgarian National Radio that an
increase in the minimum wage was not feasible. Karolev argued
that in the last six years the minimum wage increased by 60 per
cent, while the economy grew just 5.2 per cent.

Goranov also discussed weaknesses of GERB's first government
(2009 - February 2013), of which he was deputy finance minister
and Simeon Djankov was finance minister. "If there was any weak
point, it stemmed from the understanding that fiscal
consolidation should dominate everything. This led to some
unbalanced decisions and to an accumulation of arrears of
payments," he said.

Goranov attributed this policy to the idea that "we can quickly
meet the minimum requirements for joining the European Exchange
Rate Mechanism (ERM II, the precursor to entry into the
eurozone)". It is clear now that Bulgaria has a long way to go,
said Goranov, and pledged that no effort would be spared to use
the budget - one of the last monetary instruments of the State -
to boost investments and consumption.

Goranov also said the government would by no means use changes
in VAT to increase budget revenues.