Bulgarian Vice-Premier and Economy Minister Simeon Djankov participated this week in the sitting of the Economic and Financial Affairs Council /ECOFIN/. He voiced there this country’s stance on two major issues.

First, regarding this part of the session, aimed at the preparation of the European Council on March 1 and related to the participation in the Euro Plus Pact, Bulgaria states that the coordination of tax policies engages all EU member-states for the start of a structured dialogue on tax policy issues.

This is done with the purpose of exchange of good practices, avoidance of harmful tax practices, as well as for giving suggestions for fighting tax frauds and tax evasion. However, Bulgaria’s stance is that direct taxes remain in the competence of each separate member-state, the minister underlined.

The second subject was related to the presence of this country in the so-called “grey list” of the EC that refers to states, “situated in an area of economic risk”. Bulgaria does not agree with its presence in this list and made that clear via a special declaration with the following arguments: the current account showed a surplus as of 2011 and according to the autumn forecasts of the EC it will be kept through the period 2012 – 2013 too.

Bulgarian export’s market share grows over the entire period, which supports the greater competitiveness of the economy. This country attracts foreign capital that exceeds the average levels for the EU as a share from GDP in 2010 and 2011.

The increasing of labor productivity in Bulgaria is second-best in Europe, after Estonia. Dynamics of labor expenses is related to the continuing re-structuring of the economy to sectors with high added value. Nominal labor costs per unit of output are expected to go below the 12 percent threshold in 2012.

Private sector’s indebtedness in the case of a catch-up economy like the Bulgarian one is not a reason for concern, since to a great extend it is due to an inflow of direct foreign investments /with a share of 62.5 percent end-September 2011/. Net present value of the external debt is a better indicator for potential vulnerability, as its value is relatively low one in our case, compared to other EU member-states.

To sum up, this country has no sustainable imbalances that cause any concern, the Bulgarian delegation has stated in its declaration. Other EU member-states have supported that stance and that is why the subject will be additionally discussed at the forthcoming ECOFIN session in March.