Often, the introduction of the euro is understood as follows: a loaf of bread is 2 leva, from the next day it becomes 2 euros.

This is absolutely false.

The mechanism is three or six months before the official introduction of the euro, prices start to be displayed in both currencies.

Thus, citizens can monitor whether there is a difference from today to tomorrow.

This was shared by the Deputy Prime Minister for European Funds Atanas Pekanov

in an interview with

Atanas Pekanov is an economist at the Austrian Institute for Economic Research (WIFO), in Vienna.

The following is the full interview with the Deputy Prime Minister:

- Mr. Pekanov, when you returned to Vienna, after having already been deputy prime minister once, what did your colleagues and students tell you?

- When I returned in February to the economic institute where I work and teach, there was actually an interest in telling about my experience, how one feels when one is so young in such a position.

It was a good period for me, because I got into politics a bit by accident, although I was always interested in it, I always gave opinions on economic policy.

Coming out of it gave me a chance to think about everything that happened to me, some mistakes that happened.

Many of the politicians are holding on to power and perhaps a bit out of fear that they won't be able to return, they don't want to give it up.

I think it's good to take a break, to think about what happened, whether it could have been better.

Therefore, in conversations with students, we have said that politicians often do not admit that they have made mistakes.

- And do you admit that you made mistakes?

- I consider it a plus that I am in academic circles where we constantly argue with arguments, and you have to be ready to change your position when the facts, data and arguments lean towards another position that you did not previously defend.

It doesn't make you weaker.

Being able to rethink your position makes you a stronger and better leader.

Pekanov will make a council for economic analyzes with Bulgarian scientists from abroad

- And when you went second to the post of deputy prime minister, what were you thinking?

Why do you actually do it, and even for a little while?

- When you had the opportunity to develop, you were lucky to have been to many places, you had good chances, you must at some point give a little back to your homeland.

This can sometimes happen in sunnier times, of economic growth, like last year, sometimes it happens in darker times, like the economic times in Europe right now.

- To ask about the mistakes made.

Have you done a role play with the students?

- With the students, we have discussed a mistake that is in my expert portfolio - the subject of inflation.

A year ago, all leading economists underestimated inflation.

I don't consider myself one of them, but I listen to their opinions, that's why I say - we underestimated her.

On the other hand, it was difficult to foresee the geopolitical situation, the war from which the energy crisis arose.

If we look at the data, it is the biggest factor that predetermines the worrying levels of inflation in Europe at the moment - 9.8% for the Eurozone, and in Bulgaria it is even more worrying - 17%.

That's a staggering number, the likes of which we haven't seen in decades.

In our country, Bulgarian factors also contributed to this.

Deputy Prime Minister Atanas Pekanov: Bulgaria has fulfilled 21 of 22 conditions for the first payment under the Recovery Plan

- Will you tell them who they are?

- Partly too generous fiscal policy.

I will give an example - how the political talk and the pre-election situation in July led us to a situation where a decision was made by the parliament, which we will have to implement - for full compensation of 100% of electricity for businesses.

- And in a hat, everyone gets it.

- Yes, and it is on the way, and all European countries are currently trying to stimulate saving.

We are currently giving away taxpayers' money and taking away the incentive for businesses to think about how to save energy and invest in other ways to get it.

I think this is a politically incorrect decision.

All the measures that are in place were made sense in the first months of the pandemic in 2020, then we had to rush, help people and businesses and calm them down.

Everything after that given to kalpak is the cause of what is happening now.

- You are now returning to implement the recovery and resilience plan.

How do you start implementing that plan?

And the important question - the money, when do we expect it?

- Yes, after my team and I wrote a serious part of it, now it's time for its implementation.

Let me tell you something that has not worked well so far - the coordination between my position and the individual ministries.

We have started talks with them, to provide us with plans-schedules for their bills and for their investment projects, so that when we have to report them in Europe, the work is done.

You know that according to the first payment there are still problems with one project, the others are already being prepared.

22 bills should be ready by the end of the year.

We have spoken to the ministries that are preparing them - some are in the working group phase, others are almost ready, and others are in the launch phase.

These are the laws that we need to draft and the future parliament will know that they need to adopt them from mid-October to the end of the year.

The next payment,

Deputy Prime Minister Pekanov with details of the Euro billions under the Recovery Plan

- How much money is that?

- The next payment is 700 million euros.

The first is 1.3 billion euros, for which one project remains to be completed in order to receive them.

We are starting work on all the projects that must happen in this period, and in the next 6 months we must work so as to unlock investment projects of BGN 3.7 billion. Some of them will not be reported in December, but they must start now, so that it does not turn out in a year, when we have to report to Brussels, that we missed a deadline.

Some projects will be reported after a year and a half, but must start to be implemented.

It will also be a resource that begins to flow into the economy.

All ministries work according to this schedule.

- This stumbling block "Tetra", this system of the Ministry of Internal Affairs, outdated, you say, he should start, right?

- It must be assigned to a contractor and only after that we will receive the first 1.3 billion euros, which is a kind of advance.

The Ministry of the Interior is working to make the order happen in the right way.

At the last one, not a single candidate appeared and the decision that the regular government took was to assign it to "Information Service", which would find a company to carry it out through a direct assignment.

We have decided that we refuse to participate in direct procurement, because we believe that we should make an open, transparent procedure, based on competition, which corresponds to our understanding of a fair and transparent distribution of European funds.

The Austrian newspaper "Standard" about Atanas Pekanov: Economist in the service of the old homeland

- Should procedures be opened for these 3.7 billion by the end of the year?

- Exactly.

All ministries are aware of what they have to do.

I will give you an example with the Ministry of Innovation and Growth, which has started procedures for BGN 260 million and companies can apply until September 21 to receive funds and modernize their production.

This will lead to cost savings and lower prices.

One of the big programs is that of the Ministry of the Environment and Energy for the energy efficiency of buildings – BGN 1.2 billion for renovating residential buildings and another 680 million for non-residential buildings, I guess it will start in September or October.

The Ministry of Transport will open many projects.

And this is the fresh resource that will flow into the economy, which should have happened even earlier because part of the plan was for recovery, with us, because of the political delay, it will be for sustainability, because we end up investing in things,

- Five operational programs have not yet been sent to Brussels.

When will this happen?

- We are cleaning them and within August they will be sent.

And in September or the beginning of October, all will be approved.

- At the end of the first year of the absorption of the money from the new program period, will Bulgaria have approved programs?

- The partnership agreement was signed at the beginning of May.

There is a delay, but it is because we had to wait for a regular cabinet.

Three of the programs have been approved - "Education", "Human Resources" and "Food", which are important because investing in people - in work and education, raises the potential of our country.

- How much are the amounts under the operational programs?

- About 20 billion euros for the next 7 years, and applications for the approved programs should start in the next weeks.

Time has been lost and we must catch up.

- What commitments have we made against the two billion from the Fund for a just transition for the coal regions?

- Territorial plans are at the stage of public discussion.

At the same time, we are waiting for an answer from the EC whether they see them as a finalized version.

Perhaps the most difficult commitment before our country - and clearly we must say it, is written in the recovery plan.

It is to reduce carbon emissions by 40% by 2026 compared to 2019. But we have steps that need to be taken every year and if we don't do them we won't be able to claim payments.

Atanas Pekanov (Official Deputy Prime Minister): I enter with a clear idea of ​​the difficulties we will face

 The work will be very difficult, the long-term green deal must remain a priority, but in the short-term it might be right to talk about some kind of rethinking, renegotiation of these commitments, because this and next winter will not be easy at all.

And we must be aware that this resource that we have is ours, we cannot lose it in this situation.

- You said that membership in the OECD is a priority, but there the processes are lengthy.

What can you do?

- It was important for us to frame the mechanism so that it is correct, and we took the decision of the Council of Ministers for working groups.

Each ministry negotiates with a different working group or commission in the OECD to harmonize our standards with those of developed countries.

This will take two or three years.

To get into that club of developed countries, you have to implement the regulatory framework that they have because it has been proven.

- What can the cabinet do for three months on another priority – our membership in the Eurozone?

- The three months are key, because Bulgaria must make the technical preparations, so that next year, if a regular cabinet decides to request our entry from January 1, 2024, we will be ready.

Now is the time to form an information campaign, to build the mechanisms to protect people.

- What are the mechanisms to protect people?

- The introduction of the euro is often understood like this – bread is 2 leva, from the next day it becomes 2 euros.

This is absolutely false.

The mechanism is three or six months before the official introduction of the euro, prices start to be displayed in both currencies.

Thus, citizens can monitor whether there is a difference from today to tomorrow.

A good mechanism is when there are distortions, they are reported to the Ministry of Finance or the Financial Supervision Commission, this is the method in other countries.

An online list is also made, from which customers can see - in this supermarket, from today to tomorrow, prices have risen by 50%.

This is also a pressure on the manufacturers themselves not to do this.

There are also possibilities for fines if they only show prices in euros.

In this transitional period, citizens will have the opportunity to exchange the currency, get used to the new one and ensure a normal transition to the euro.

Within the Eurozone Membership Coordination Council, we must use best practices.

There is a lot of experience in other countries - in the Baltic states, in Slovenia, Slovakia, there are no negative feelings among people.

Even the Greeks, who have experienced turbulence, admittedly of a different nature, support the euro.

We must aim for the indicative date of January 1, 2024, and along that line we must do the work that is needed, and the official inquiry for our membership of the eurozone must come from the regular cabinet.

- Did you just come back?

- I hope so.

The official office has a horizon of up to 3 months.

- But both the left and the right suspect you of founding a political project or participating in one.

Are such suspicions justified?

- At the moment I have no such plans.

- For the moment?

- One must be ready to help one's country when needed.

I am in such a situation right now and I need to focus on the work at hand.

- They say that you are an economist with left-wing thinking, but it is not evident from your views and actions.

- No, that's what people say.

I've had access to many leading economists around the world, both at Harvard and in London, and I've seen that economists are driven by data, by models, by arguments to make decisions.

On some topics they may be more left-wing, on others they may be more right-wing.

You have to be willing to judge what measure is appropriate.

And in my opinion, our country needs more of this debate – the technocratic one.

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- In the political space, what project would you aim for?

- At the moment I have not targeted any.

I have focused on my academic career.

- People who participated in high-level management in the state and in politics, they have the feeling that they managed the processes and had an influence on people's lives.

And this motivates them again and again to try to stay in politics.

Do you have something like this?

- Surely there is such a thing.

But that's how I feel with students, because in many ways you shape them as a behavior, as a way of thinking, as a way of working, as a direction in life.

And there you have an impact on a very strong level, and that is why it is important to me that we do everything possible to prepare young people in Bulgaria and in other countries for what awaits them. 

Atanas Pekanov

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