A European Basic Income pilot project would be good for Bulgaria

The EU Commission has said from the 25th September 2020 signatures can be collected from EU residents in connection with a new European Citizens Initiative. If the European UBI family succeeds in gathering 1 000 000 signatures, divided among a minimum of seven countries, then ECI delegates will be able to present a proposal to the European Commission which, if approved, would hopefully convince EU governments to start paying Basic Incomes to all of their citizens.

Bulgaria suffers from a number of problems, and in particular population loss and economically active citizens leave the country for better opportunities elsewhere. Angel Petrov writes:

The population decline carries long-term economic costs. Over time, a shrinking workforce becomes unattractive to investors and unable to subsidise the pension and healthcare needs of an ageing population.

Poverty and inequality are significant problems in Bulgaria. Bulgarian people currently receive the lowest income in the European Union while the cost of living is increasing. This is paradoxically occurring during 25 years of steady rise in productivity and mostly rising GDP. The Gini coefficient (2019) is 40.8 and rising.

The Corona crisis measures

All government ‘aid’ described below is highly bureaucratised and full of conditions, and in addition the funds are often paid late due to the complicated and sluggish administrative processes citizens are subjected to. The aid consists of:

• Cash payments of €192 only for families with 14 year old children for the duration of the state of emergency (2 or 3 months)
• over 2 months the unemployment fund will pay 60% of the income of the employees from sectors most heavily influenced by the COVID-19 crisis for up to three months. In addition to employers in sectors where operations have been suspended as a result of the social distancing measures (tourism, sports, culture, etc.), any other employer that can prove a 20% y/y drop in revenue in March is also eligible for the 60% salary subsidy.
•  The measure has been extended until 30th of September 2020.

This is the main stimulus. However, the working population has doubts that the administrative process will be efficient enough (it is expected that most companies will receive the aid in October and November 2020). Furthermore, many small and medium businesses don’t have the means to pay 40% of the salaries. Some critics see this policy as supporting big companies which will absorb the unemployment caused by the lack of help for small and medium companies.

• To date (1st August 2020) 129 million leva (64,5 million EUR) have been distributed to 8400 employers, that is 13% of the 1 billion leva (511 million EUR) allocated by the government. Close to 35% from these people have taken aid only for one month.
• On the 10th of April the Bulgarian Central Bank enacted a moratorium on debt repayments. Overall the number of people who have debts in Bulgaria is almost 3 million. By the 10th of May, 102 000 have applied for temporary cancellation on payments (usually 6 months) towards their loans, and 80 300 have been approved. Changes in these numbers are expected.
• The processes are not transparent, efficient and timely
• The measures are conditional and selective and not universal
• Most of the governments support is expressed in loans rather than direct payments

In conclusion the measures so far have the potential to create another wave of workforce immigration towards Western countries, weakening further the economic future of Bulgaria because:

The case for a UBI emergency pilot in Bulgaria

The unnecessary agony of the Bulgarian nature and people can be prevented, and UBI is a key step that can be collectively taken to compensate over three generations who have given their talents, energy and time towards creating shared wealth spreading beyond the country borders. It’s time for common dividends to be distributed to their rightful owners.

Bulgarian UBI advocates are working hard to unite the people around the idea that once social and economic stability is achieved through unconditional payments of around 1000lv (500 EUR) Bulgarians will have the time and capacity to build a new system that meets their needs and corresponds to a consensus based on democratic values. Due to the inflexibility of the national currency (it is tied to the euro), the dominant proposal on how to implement Basic Income in Bulgaria at the moment is by restructuring the tax system and national budget in a way that will pay the UBI bill with the collection of Value Added Taxes and Excise Taxes paid by the sellers. The idea is for every Bulgarian citizen with an active address registration to own a bank card issued by the Bulgarian Central Bank which will serve people as a payment method to be used to receive a Basic Income that would meet basic needs like rent, utility bills, food, clothes etc.

A UBI emergency pilot hosted in Bulgaria would not a utopia, and the EU could rescue its reputation by supporting it. It is an opportunity to trial universal basic income on a national level using the Bulgarian state financial infrastructure to distribute funds to the people.

The EU Commission would also have a vested interest in embracing the project, as the positive results would increase cohesion and trust, and would give hope to other states that the European experiment is not another way to practice concentration of power.

It’s time for evolution not only for Bulgaria but also for the EU. UBI is a win-win solution and will literally bring Bulgaria back to life. People outside long to return to their roots and work for the wellbeing of their parents and the next generations. The EU owes this to the people of Bulgaria and Bulgarians owe it to themselves, their ancestors, the children, and the European natural environment that happens to be surrounded by Bulgarian borders. We have too much to gain and nothing to lose.

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RESOURCES:

More details on COVID related government  aid.

Interview (Georgi Nedelchev, in Bulgarian) 

UBI Project Paper (in Bulgarian)

Videos:

Discussion on Universal Basic Income  (in Bulgarian)

Is UBI possible? Discussion (in Bulgarian)

UBI and Poverty (in Bulgarian)