site.btaUPDATED Podkrepa Trade Union Continues to Push for Excess Profits Tax

“We will continue to insist on the introduction of a tax on excess profits to guarantee pensions, benefits, and increase income,” announced in Vratsa the economic adviser to the president of the Podkrepa Confederation of Labour, Vanya Grigorova.

According to her, if a tax on excess profits is proposed and adopted, the state budget will receive additional revenues of BGN 2.4 billion in just half a year. "These additional funds would largely solve the deficit. But the problem is that the Bulgarian government, not only the current one, does not want to touch the profits of private corporations," Grigorova further said. 

"Podkrepa published on Friday on its website an economic analysis that reflects what could be called an apology from the European Central Bank (ECB), which finally admitted that the reason for inflation not only in Bulgaria, but also in other European countries, is not the increase in the incomes of citizens, but the greed of corporations. Their profits cannot be explained in any way by increased fuel costs. Finally, the ECB, which always insists on restraining income growth, has admitted that inflation is actually the result of incredibly increased profits," Grigorova said.

Eurostat data refutes the European Central Bank's claims that the cause of inflation is rising wages, showing that unit labour costs rose less than price increases in the first quarter of 2023, according to the analysis by Daniela Penkova, an economic expert at the trade union, published on Podkrepa's website. This is a continuation of the trend from 2022 that wage growth will lag far behind inflation, reducing people's purchasing power, according to the analysis.

Energy price volatility has served as an excuse for firms to indiscriminately raise prices, the analysis says. At the same time, the data shows that companies' profit margins are increasing, not shrinking as they should when energy costs rise sharply. The International Monetary Fund, in its 26 June 2023 publication, wrote that the rise in corporate profits accounted for almost half of the increase in inflation in Europe over the past two years, as companies increased their prices more than the surge in energy import costs. Now that workers are demanding wage rises to compensate for their lost purchasing power, companies may be forced to accept a cut in profit share, Podkrepa’s analysis says. 

There are preconditions for declaring effective strikes in state administrations, said Kremena Atanassova, the Podkrepa trade union leader of administrative employees. 

Following the warning protests in recent weeks, the declaration of a strike is not ruled out and depends on how much sense there will be in the government and political parties, but people on site will decide for themselves whether to go on an effective strike, she said. 

At this stage, several political parties have made clear commitments to increase wages at the National Social Security Institute, Atanasova said.  The proposals will be voted on Tuesday in the Budget and Finance Committee in the National Assembly. Although the commitments are for an increase in the salary budget by BGN 8 million and not by the requested BGN 12 million, the Syndicate is ready to compromise if this money is distributed equally among the employees and not as a percentage, because there is already a huge difference in the pay between employees, the trade union leader explained.

Atanassova pointed out that salaries in the National Statistical Institute remain a problem, where a large part of the employees receive salaries below BGN 1,000. In her words, so far no political party or parliamentary group has committed to increase the pay in the Commission for Consumer Protection. This is a key administrative body that cannot exercise effective control when inspectors' salaries are BGN 1,000 a month. 

She added that about 5 thousand people work in the cited administrations, and the total resource needed to increase their salaries is no more than BGN 16-17 million.