Recently, the Heritage Foundation hosted Bulgaria’s Minister of Finance/Deputy Prime Minister to talk about some of the astounding reforms that have helped Bulgaria through the financial crisis. Dr. Djankov outlined the achievements and goals of Bulgaria since his self-described “center-right” government took control of the country in late 2009.
Amid a fiscal crisis and rising debt and deficits, Bulgaria has dramatically decreased their deficits and produced major economic growth in a very short period of time. Minister of Finance Dr. Djankov directly attributes these gains to major reforms that have take place that include:
– Reducing minimum capital investment required to start a business to just one euro.
– Cut all government expenditures by 15 percent across the board.
– Lowered taxes to become the country with the smallest tax burden in the European Union.
– Cut public workforce by 14 to 15 percent with the goal of cutting 20 percent.
– Proposing Constitutional changes that include:
- Requiring a 2/3 majority vote to raise taxes
- Limiting deficit spending in a single year to a 2 percent of GDP maximum
- Capping total government spending at 37 percent of GDP
Since these reforms have been implemented, Dr. Djankov was happy to report 3 straight quarters of economic growth, a reduction in the deficit spending down to roughly 2.5 percent of Bulgaria’s total GDP, and attracting major investments into the country.
With all these excellent financial reforms taking place, Dr. Djankov and his colleagues have also made it a priority to increase transparency in the government. The closed session meetings of the ministers are now available in full to the general public. Dr. Djankov explains that these discussions, and sometimes heated arguments, relate to public money and the future of all Bulgarians. While he admits that it is not likely many people are watching these closely, it is important that these formerly closed sessions are made public for anyone that wants to view them.
While the work is far from over in Bulgaria, it is encouraging to see the progress that has been made in this country. It will be interesting to watch upcoming reforms in other European countries as other in the European Union begin to take notice of these changes as well.