Dr. Konstantin Trenchev, President of Podkrepa Labour Confederation: No political cause could take people on the streets to protest

- Dr. Trenchev, will you insist on a raise of monthly wages in the real economy in the autumn of this year and a minimum wage increase as of January 1, 2012?
- If you look back, you will remember that the idea of raising the minimum monthly wage to BGN 290 was launched several months ago with a very serious argument, understandable to everybody. The net sum to be received after making the deductions prescribed by law is a bit above the poverty line. When the Government, represented by Minister of Labour and Social Policy, Totyu Mladenov, proposed a minimum wage of BGN 270, we replied that BGN 290 would be a more logical amount considering the poverty line. The situation in the real economy is complicated because it is not homogeneous. This sector is a strange mix of serious employers who follow the rules and a huge gray sector whose percentage is debatable. Some people argue that it accounts for as much 50% of the economy, others say that it is less. However, no rules apply to it and it would not comply with any decisions made. With respect to the real economy, our desire has always been to increase remuneration there. This stems from the simple logic, shared even by Finance Minister Simeon Djankov that the increase in consumption leads to a recovery of production and economy. Better remuneration results in increased consumption. Unfortunately, small- and medium-sized businesses in Bulgaria which are the biggest employers are in a critical situation. 

- Can we expect a banking crisis?
- I would not like that to happen, but some banks are in a very difficult situation, indeed. Of course, there are many stable financial institutions as well. We have a kind of a paradox. Lenders are not willing to extend credits and interest rates on loans are very high. At the same time, interests on loans are the main source of banks’ proceeds. On the other hand, banks have costs - not only for salaries, offices, etc., but mostly for payment of interest on deposits, which are also high, much higher than in other European countries. So, what happens – banks want to gain from extending credits but refrain from lending and lose quite a lot from the payment of interest on deposits.

But everything I mentioned so far are objective dimensions of our reality which are undeniably extremely important and can provide a basis for important conclusions, but I am much more worried by the subjective processes in society. In psychology, it is an indisputable fact that motivation is crucial. Currently, we are unmotivated, people are shaken, uncertain and do not have a desire for anything. Having lost the support of values and causes, people turn aggressive at the slightest provocation.

- Can the lurking aggression you are talking about lead to an avalanche of protests and riots in the autumn or winter?
- Only economic reasons could lead to protests of a significant part of the public. No political cause can take people into the streets to protest. Only misery and a situational problem can make the tension erupt.

- Is Podkrepa Labour Confederation planning autumn protests?
- We will protest only if our members are willing to do so.

- Do you think that there will be Governmental reshuffles before or after the elections?
- Most likely reshuffles would take place after the elections. Without a serious and legitimate reason, any changes initiated before the elections would be perceived as an image-making campaign. Avoiding such changes would demonstrate success, confidence and determination. These are fine psychological issues, but the way things are developing gives me no reasons for optimism.

- A week ago, employers came up with a package of measures, targeting the pension reform. They suggested that employees at the Ministry of Interior, Ministry of Defence, the judiciary and in the public administration pay their insurance contributions on their own. They also demanded for an inspection of all disability pensions. Do you approve of these measures?
- To a large extend, these proposals are logical and sound. The number of reported disabled people in Bulgaria doe snot represent the actual situation. Every second person in Bulgaria is convinced that by paying some money, he/she would be able to get a document, certifying a disability. Everything seems to be for sale here. As for the second suggestion - the employees in the army, police, court and public authorities to pay their insurance contributions alone - this is also logical. Every working person knows exactly what his/her salary is and what the deductions are. While at the same time the State is not paying up the full amount of the insurance contributions of the respective groups of employees and I can prove it. The State does not pay the full amount of the insurance contributions of groups and people, to which it has undertaken commitments, for example - children. No matter how strange it sounds, but the State, which is drafting the laws, tries not to comply with them.

- This idea, which was suggested a few months ago, met strong resistance.
- Surely, resistance was unavoidable given that if accepted this proposal would reduce the incomes of the employees in these fields. The position of employers, which was supported by the National Council for Tripartite Cooperation, was that the real incomes of the employees be not reduced.

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