Ousted GERB woos Bulgarians with promises of fiscal stability

Reuters News
Posted: Apr 07, 2013 10:39 AM

SOFIA (Reuters) - Bulgaria's center-right GERB party, forced from power by protests over low living standards in February, pledged on Sunday to keep taxes unchanged and boost incomes only in line with economic growth if it wins an early election in May.

GERB's leader and ex-premier Boiko Borisov said that was the way to protect the country's currency peg to the euro and avoid economic and financial meltdown.

At the start of the election campaign Borisov, whose party leads in opinion polls, pledged to keep corporate and income tax at 10 percent, one of the lowest rates in the European Union, and foster job creation by supporting business and investment.

"If GERB comes to power, taxes will not be raised, there will be financial stability," Borisov said.

"If GERB comes to power, we will do everything to have more jobs, but linked to economic growth."

Borisov hopes the tapping of EU funds, about 15 billion euros through 2020, will help revive the fledgling economy. He promised he would not raise new debt to boost incomes, but only to back infrastructure projects.

With average monthly pay of just 400 euros and pensions half of that, Bulgarians are the poorest EU members.

Under Borisov's governance Bulgaria managed to cut its fiscal deficit to 0.5 percent of GDP in 2012 and avoided a bailout, but that has come at the cost of holding down living standards that are less than the half of the EU's average.

The economic slowdown has erased over 400,000 jobs since 2009 and about 50 percent of the 7.3 million Bulgarians are now at risk of poverty and social exclusion, data from the EU statistics office Eurostat showed.

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Recent opinion polls show the party extending its lead over their key political rivals, the Socialists, with support of 22-24 percent compared to 17.4-17.5 percent for the Socialists.

The polls suggest Borisov's party is unlikely to command a majority and will have to try to form a coalition.

The Socialists have pledged to cut taxes for low earners and to create more than 250,000 new jobs if they win the parliamentary election.

(Reporting by Tsvetelia Tsolova; editing by Andrew Roche)