Plamen Dimitrov, leader of the Confederation of Independent Trade Unions of Bulgaria: The distorted market environment pumps up the prices

Ana Mihova

- Mr. Dimitrov, the meeting of the National Council for Tripartite Cooperation is scheduled for tomorrow. What will you discuss?
- Finance Minister Simeon Djankov convened a tripartite council following his agenda which, however, has nothing in common with ours. The first point refers to reporting on the anti-crisis measures on routine matters which had to be done a long ago. We proposed this to happen as early as December. Instead they suddenly decided to take account of the measures in mid-March. We will participate, but we insist that our proposals be also discussed.

- What do you propose?
- Our proposals are related to the reality and people's life. We all have witnessed what has happened to prices and incomes over the last two months. The purchasing power is decreasing with dramatic paces. This is a top-priority issue and no other topics could supplant it. We insist that three groups of issues should be discussed. First of all, there should be reliable information on the growth of prices which should be collected in a target-oriented way by the respective monitoring and regulatory bodies. They should provide information on the situation of the prices and their upward growth rate. This information should not be on the overall inflation and on the inflation due to lower demand. It should not rest on aggregate indicators, but on 10-12 essential goods and services which are important for people's everyday life. According to our data, in early March, a 20-25-30% jump in prices was registered, compared to December. These are horrible numbers in terms of basic goods and services of prime necessity. We think this painful problem should be discussed. We insist on the information unification. That is, we should be informed on the amount and source of funds that the state must start collecting regularly every month in order the process to take place, rather then debating whether there is any or no inflation or whether prices have increased less or more.

- Do you mistrust the data on growth of prices being published by the NSI (National Statistical Institute)?
- We do not mistrust the data, but we believe the methodology distorts it. For us, it is important that data is collected on the dynamics of prices of basic goods and services, as well as on their inflation. This should be set as a different framework for monitoring and for collection of information. The second significant issue refers to the monitoring institutions involving the Commission for Protection of Competition (CPC), the newly set-up Bulgarian Food Safety Agency, the Commission for Consumer Protection (CCP), State Energy and Water Regulatory Commission (SEWRC) and etc., which should immediately provide information on their recent price monitoring activity. We would like to know the amount, kind and target of inspections that have been implemented by CPC over the last six months, as well as the results from the inspections of the Commission for Protection of Competition demanded by us in the key fields of monitoring related to prices of grain, flour, bread, milk and milk products, meat and fuel. And if all those monitoring authorities have implemented inspections over the past six months, we insist that the collected information be discussed and appropriate measures be proposed. Let them propose the measures based on their legal powers. I do not mean that somebody should fix prices or limit levels, but those bodies should fulfill their duties and protect competition. This is the current problem. The total distortion of the market environment in Bulgaria does not result from the fact that someone regulates prices, but from the lack of competition protection. The state must also realise its obligations. I am not saying that it should necessarily reduce taxes or excise duties, but it could act as an entity on the market in order to exert influence. In fact, all normal governments are following this policy at the moment. Currently, public procurement contracts are awarded for essential goods and services.

- According to your calculations, how much should the minimum wage become? The Social Minister proposed the amount of BGN 270?
- I am not ready to give numbers. I just state specific examples, thus excluding the arguments that can hinder the debate on the increase of the minimum wage. They are either social, economic, or exigent because the crisis has impoverished many Bulgarians. The guaranteed minimum income is frozen at the rate of BGN 65. We demand a clear relation between the minimum income and the poverty threshold to be established under methodologies that will be proposed by us on the spot so that the coefficients could be increased.

- What will ensue if your proposals are not accepted?
- People will continue dramatically to get poorer, and if we consider the statement of sociologists, the rating of the government will fall by 10% quarterly.

- We have witnessed over the recent days the spontaneous protests of citizens staged against the high fuel prices. Do you think the civil society will continue to revolt against the rising prices?
- Naturally. The discontent will be expressed both in the decline in confidence and in the organisation of increasingly larger and ever more diverse population groups staging protests. There is no doubt about that. People cannot get through the crisis when they are constantly driven closer to the brink of poverty. Nobody denies that there are objective reasons for the price increase of fuel, but this is only half the truth. The other half is connected to our inaction and the distorted market environment which introduces additional speculative elements and pumps up prices, thus propelling them to the highest EU levels in the poorest member-state. The Prime Minister explains that foreign market prices are similar to ours, but this is not completely true. It is only half of the truth. The rest is in our hands since the trade unions, the employers, the government, if you will, and the opposition must find efficient measures so as to reduce the impact of the foreign factors rather than intensifying and multiplying them by two.

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