Plamen Dimitrov, President of the Confederation of Independent Trade Unions in Bulgaria: There's a strong economic case for raising public sector wages

Mr. Dimitrov, you called for a 10% raise in public sector pay and state-funded pensions as of January 2013, an increase of the minimum wage to BGN 330, benefits for the most vulnerable low-income households in order to help them cover their utility bills and an emergency meeting of the National Council for Tripartite Cooperation. Has there been any development on those demands?

We stated our demands back at the beginning of the year and have repeatedly expressed our position since then, driven by our conviction that household income can and should be one of the economic growth engines. Higher wages are determined not only by the rate of productivity in a given sector, but by inflation and purchasing power too. With falling exports and the country in stagnation, raising incomes is the only measure that can boost consumer spending and, thereby, bring about growth.

While official data puts the unemployment rate at a little over 12%, some of your colleagues say in reality it is much higher than that. What do your calculations reveal about the state of the labour market?

Arguably, the labour market is showing some alarming signs, the consequence of the absence of economic growth engines I talked about. For the first time on record, unemployment is actually climbing during the summer months. About 400,000 jobless people are on benefits, but if you add up the rising number of discouraged job seekers, not to mention those who are not registered in the Labour Office Directorates, the unemployment rate would probably be double.

What's your comment on the sharp jump in fuel prices, adding to the increasingly higher social tension? Just a few days ago, France temporarily cut its excise duty on fuels, while Bulgarian policymakers would have us believe that it is not an option without getting EU's permission first.

The debate on whether or not we can influence fuel prices is often overlooking the fact that fuels are among the few global goods whose price is determined not only by market forces. We all know that oil prices are set by major producers and exporters in collusion. The timing and the amount of oil exports is determined by arrangements between the key players. It is often said that influencing fuel prices goes against free market principles. It's true. But then again, speculations have brought the cost of crude oil over $100 at present.

Should we brace ourselves for heightened social tension and a wave of protests in the autumn?

Unless the right measures are taken, laying the ground for a more effective economic policy, and policymakers and employers showing working people their willingness to share the burden, the answer is `Yes`. I suspect there will also be street protests, turmoil and heightened social tension.

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