Dragomir Stoinev, Chairman of the Committee on Labour and Social Policy with the National Assembly: The main problem of the pension reform is its revenue side

Mr. Stoinev, what will the fate of the pension reform be after the National Assembly rejected the veto of President Georgi Parvanov?
- The GERB (Citizens for European Development of Bulgaria) government drafted a pension reform which lacks serious support at the political level because no other political party backs it, excluding the independent MPs. Besides, outside Parliament, public support for such a reform is absent. We all witnessed the wave of social unrest which swept the country and clearly showed that the policy on retirement is opposed by everyone. We, from the Coalition for Bulgaria, have repeatedly proposed specific measures to offset the increase in the pensionable service and age because we think that ,at the moment, nothing necessitates the increase in the pensionable age in accordance with the drafted formula. We believe that the measures which must be adopted should address the revenue side rather than the expenditure part which is preferred by the GERB government. The problem is a result of the lack of social insurance contributions and, in two and a half years, a total of 300,000 people lost their jobs.

We proposed an increase in the maximum insurance income. At present, it stands at BGN 2,000 and it has not been changed in the last four years. We suggest an increase up to BGN 2,700 and a subsequent one up to BGN 2,900. That is, it should be equal to ten minimum wages. In this way, rich people will also bear the burden of the crisis. As a result, a revenue of BGN 122 mln will be infused in the Public Social Insurance Budget. The Bulgarian government must choose whether to increase the pensionable service and age or reduce social insurance contributions. There is no country in the world which has low taxes and low insurance contributions at the same time.

Therefore, we propose a raise in the pension contribution from 1% to 2%. This will result in an additional income of BGN 180 mln and an increase in the pension contribution by 1.2 percentage points, which will result in revenues of BGN 210 mln. This is a package of measures to the amount of BGN 500 mln, which can reduce the deficit in the system of public social insurance and the increase in the retirement age and pensionable length of service can be avoided.

- What will the next moves of the opposition be after the presidential veto on the pension reform was rejected by the National Assembly?
- We are currently collecting signatures in order to refer the reform to the Constitutional Court. I cannot say whether this reform is unconstitutional. Only a constitutional judge can rule on this but we have specific motives. The way this pension reform was adopted – in the dark, at second reading, did not allow MPs from the opposition to make proposals for changes.

- Isn’t the referral to the Constitutional Court doomed?
- We have twice approached the Constitutional Court with regard to labour policy and the Constitutional Court has shown a red card to the Government twice. We believe we can succeed now as well.

- The amendments to the Labour Code also provoked a heated debate. Can the opposition make some changes in the Government’s proposals?
- I can hardly be optimistic at the present stage. At a time when the unemployment rate in Bulgaria is the highest in the entire EU, it seems outrageous to punish employees for working without a labour contract. It is true that there are two parties to every contract - an employer and an employee. But at a time of crisis, when there are no job vacancies and people are ready to do anything in order to provide for their families, it is not the employee who is to be blamed for the lack of a labour contract.

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