BICA SENT A “CHRISTMAS LETTER” TO THE CABINET FOR SUPPORT OF COMPANIES WITH A LARGE DICREASE IN INCOME CAUSED BY COVID-19

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Mr. BOYKO BORISOV,
PRIME MINISTER OF THE REPUBLIC OF BULGARIA

MRS. MARIANA NIKOLOVA,
DEPUTY PRIME MINISTER OF ECONOMIC AND DEMOGRAPHIC POLICY AND MINISTER OF TOURISM

Mr. KIRIL ANANIEV,
MINISTER OF FINANCE

Mr. ROSEN ZHELYAZKOV,
MINISTER OF TRANSPORT, INFORMATION TECHNOLOGIES AND COMMUNICATIONS

MRS. DENITSA SACHEVA,
MINISTER OF LABOR AND SOCIAL POLICY

Mr. LACHEZAR BORISOV, MINISTER OF ECONOMY

 

Subject: Support for aviation and other formally unclosed businesses, but with a large drop in sales revenue caused by the COVID-19 pandemic.

DEAR MR. PRESIDENT,
DEAR GENTELMEN AND MINISTERS,

We highly appreciate the measures taken by the Bulgarian government to support the Bulgarian economy in the context of the deepening crisis.

We believe that the measure of 60 to 40 plus BGN 290 for each job in the field of transport and tourism is working and provides at least a partial opportunity to alleviate the pressure on civil aviation, transport and tourism in general. But the huge decline in revenues in civil aviation compared to 2019 reaches 80-85%. At the same time, fixed costs, which are specific to the aviation industry, are maintained, and operating costs in the performance of flights are even increased to reduce the risk of contamination in aircraft. The maintenance of aviation equipment and the high qualification of the personnel require continuous financial investments, and the reserves used so far by the airlines and the branch are practically exhausted. The situation of the airlines is similar to that of the companies whose activities are closed. This is because regular passengers are at a critical minimum and there are almost no passenger charters. In a similar situation are the commercial sites, closely related to tourism, and hotels. It is therefore imperative that the measures applied to activities closed by an act of a public authority also apply to the aviation sector and other most severely affected businesses. Therefore, it is imperative that activities with a decline exceeding a certain amount (for example 40 or 45 percent) on the basis of the same month of 2019 be supported for partial payment of uncovered fixed costs. The decrease in sales revenue is, in our opinion, a much more objective criterion than whether an enterprise’s activity has been terminated by an act of a state body, as the same enterprise may carry out other activities that have not been suspended and thereby have a smaller and not even a drop in revenue.

The European Commission, with the amendments to the Temporary Framework for State aid measures to support the economy in the current epidemic of COVID-19 of 13.10.2020, allowed such state aid / financial contribution to the uncovered fixed costs up to 90 for micro and small, respectively up to 70 per cent for medium and large enterprises with a drop in sales of at least 30 per cent. We offer by 1/3 or even by 1/2 a larger decrease as an eligibility given the greater resilience to crises of Bulgarian business.

We propose that the support be for the last quarter of 2020 (the second wave) with a financial resource of BGN 150 million, set aside from the budget within the planned deficit with the last budget update. Such an amount, together with the 156 million redirected from the Operational Program “Innovation and Competitiveness” for closed businesses, would bring our country closer to the good European practices in terms of GDP. At the same time, we believe that such an amount is entirely within the capabilities of the budget, given its balance until a few days ago and the planned 5 billion deficit in a few days.

WITH RESPECT,

VASSIL VELEV, CHAIRMAN OF THE GOVERNMENT BOARD
OF BULGARIAN INDUSTRIAL CAPITAL ASSOCIATION