Taxes will rise if the spending policy is not changed. The state debt has not yet turned into an avalanche.
The budget is not ideal, I would like it to be more economical. The economy is expected to grow. Entering the eurozone will be the criterion for the government's success.
This was summarized by former Finance Minister Milen Velchev on "This Morning" on bTV.
"The state debt has not yet turned into an avalanche, but it is coming. It would be a mistake to continue with the same spending policy," the former finance minister revealed.
"The main problem is that as the debt grows, there will be an increase in interest payments and it will be increasingly difficult to put finances in order, reducing the deficit. The measures that need to be taken and are not used in Budget 2025 are unpopular and include a slower increase in social payments and pensions and a freeze on salaries," Milen Velchev announced.
"We need to break the habit of a 3% deficit every year in the state budget. The main problems for the budget are the funds for salaries in the Ministry of Internal Affairs and the Ministry of Defense, as well as pension expenses, but the "Zhelyazkov" cabinet should not be blamed for this. It could lead to a spiral and the debt could grow every year."
Increased spending will push pensions to an unsustainable level. The government cannot manage to secure a consensus to curb the growth of salary increases in the Ministry of Interior and the Ministry of Defense, he added.
He added that even if basic taxes are not raised, future increases in social security contributions and basic taxes such as VAT will be inevitable if spending policy is not changed.