Bulgarian leftists pledge tax cuts and wage hikes

Sat Feb 16, 2013 7:55am EST

Related Topics

* Socialists plan to abolish 10 percent flat income tax

* Aim to create more than 250,000 new jobs, raise wages

* Pledge to build new nuclear plant on Danube

By Angel Krasimirov

SOFIA, Feb 16 (Reuters) - Bulgaria's opposition Socialists pledged on Saturday to cut taxes for low earners by abolishing a flat rate of 10 percent and to create more than 250,000 new jobs if they win a parliamentary election in July.

The Bulgarian Socialist Party would try to improve living standards in the European Union's poorest member state by raising the minimum salary and pension and resuming construction of a nuclear power plant, BSP leader Sergei Stanishev said.

Running a close second in opinion polls behind Prime Minister Boiko Borisov's centre-right GERB, the BSP would also consider renationalising utilities if elected on July 7.

While the economy has emerged from a deep recession, it is growing only slowly and many voters are frustrated that Bulgaria still trails other formerly communist members of the EU, with wealth per capita less than half the bloc's average.

"The state is broke," Stanishev told a BSP congress. "The economy is on artificial respiration, poverty and unemployment are growing, people live in misery, fear and apathy."

Bulgaria's jobless rate hit a ten-month high of 11.9 percent in January, with the average salary at just over 400 euros ($530) per month.

"Our country has never been so far away from Europe," Stanishev added. "A radical change in the attitude of the state to Bulgarian citizens is needed. We are not fighting for power but for Bulgaria to survive and have prospects."

The BSP has narrowed GERB's lead in the polls since a government U-turn on a plan to build a new nuclear power plant at Belene on the Danube river, a decision the Socialists would reverse if they take power.

GERB said it did not have enough foreign investors to ensure financing of the multi-billion-dollar project but more than 60 percent of Bulgarians who voted in a January referendum backed the new plant, hoping it would create jobs and cut power bills.

"Belene is the cheapest nuclear project in the world at the moment," said Stanishev, who was prime minister from 2005 to 2009. "If we had won the 2009 election, this year or next year we would already have the first working reactor."

The BSP plans to scrap the current flat income tax - introduced by a Socialist-led government in 2008 - in favour of a graded system. Stanishev did not specify what the new rates would be but said lower earners would pay less.

"The rich will pay more than the poor," Stanishev said.

The BSP's idea of a non-taxable threshold for lowest incomes was welcomed by trade unions but criticised by some analysts who said it could leave a hole in the budget and lead to an effectively higher burden on taxpayers.

Unpopular austerity measures, delayed reforms, low incomes and high unemployment imposed by GERB have eroded support for its government, as have a failure to root out widespread corruption and cronyism.

In the last few days, Bulgarians took to the streets in more than a dozen cities to protest over their latest electricity bills, demanding a renationalisation of power distributors.

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