Policy responses for Bulgaria - HSRM

Bulgaria


Policy responses for Bulgaria

6. Measures in other sectors

6.1 Measures in other sectors

Many MEASURES IN OTHER SECTORS beyond the immediate scope of the health system are being taken to prevent further spread of the virus. This section contains information on many of these areas, including border and travel restrictions and economic and fiscal measures, among others.

After the termination of the state of emergency on May 13, many institutions have restored their usual activities, including courts, and some deadlines that were originally postponed are now to be continued. However, amendments to the State of Emergency Measures Act suspend public sales, entry-into-possession procedures against natural persons, freezing bank accounts and application of penalty interest rates for delayed payments of citizens for a period of two months. Rent of leased state- or municipal-owned real estates may be reduced or exempted for the next two months, as well.

Some restrictions on internal and external travel have been partially released, as well. Internal travel is allowed without restriction as of May 6. On May 14, domestic tourism was resumed. The ban on entry in Bulgaria of EU member states and Schengen Agreement countries nationals was lifted on May 22 for the following categories of people: medical specialists, medical researchers, employees involved in the delivery of medicines, transport personnel, foreign officials, people travelling for humanitarian purposes, representatives of trade, economic and investment businesses, seasonal farm and hospitality workers, border staff. The 14-day quarantine upon entering Bulgaria is lifted for the categories mentioned above, as well as for members of the families of Bulgarian nationals if their stay in the country is up to seven days. Travel between Bulgaria and Greece will be without quarantine as of June 1. The quarantine requirement for travel between Bulgaria and Serbia will also be removed as of June 1, but travellers will have to fill out declarations stating the absence of COVID-19 symptoms and consent to travel at their own risk. It is expected measures to be eased with Austria and Germany, as well.

Closure of external borders and the mandatory quarantine for arrivals were gradually eased through June. The ban on entering Bulgaria is lifted for all citizens of EU member states and Schengen Agreement countries as well as for citizens of Andorra, Monaco, San Marino, United Kingdom and Vatican City. However, a 14-day quarantine upon entering Bulgaria is compulsory for people arriving from Sweden, the United Kingdom, Portugal and third countries (with several exceptions) (see section 1.3 Isolation and quarantine).

Additional measures for supporting different sectors and enterprises hit by the COVID-19 epidemic and especially tourism have been adopted. EU development funds have been allocated to support small and medium-sized enterprises. Tour operators, which use air carriers with a Bulgarian business licence for the purpose of tourism, will receive a state subsidy amounting to EUR 35 per plane seat. A voucher system for certain categories of Bulgarian citizens will encourage tourists to spend their holidays in the country. Moreover, beach umbrellas and sunbeds will be provided at reduced prices. Amendments to the Value Added Tax Act introduce differentiated VAT rates of 9% for restaurants and books, reduced from the standard rate of 20% for a certain period (from July 1 to the end of 2021).

Since mid-July, 2020, the order of the Minister of Health regarding entering Bulgaria has been changed and amended several times according to the epidemiological situation and COVID-19 cases reported by different countries. Citizens of North Macedonia, Serbia, Albania, Kosovo, Bosnia and Herzegovina, Montenegro, Moldova, Israel and Kuwait may enter Bulgaria for tourism purposes having shown a negative PCR test conducted over the previous 72 hours. PCR certificates are not required for persons arriving from EU member states, the UK, Schengen Agreement countries and 12 third countries (Australia, Canada, Georgia, Japan, New Zealand, Rwanda, South Korea, Thailand, Tunisia, UAE, Uruguay and Ukraine). Arrivals from other countries may cross the border upon a negative PCR test, as well. This applies to seasonal workers, persons travelling for education or trade purposes, health professionals and humanitarians.

At the end of July, the government announced a new BGN 1.1 billion (EUR 56.3 million) package for social and economic support, financed by the state budget. Out of this, around 2/3 will be spent for supporting vulnerable groups, higher compensation for the unemployed, monthly supplements to pensions and financial incentives for medical specialists and other professionals involved in measures against COVID-19. Additionally, the Ministry of Economy will disburse BGN 1.8 billion (approx. EUR 1.2 billion) under various programmes aiming to alleviate the negative consequences of the pandemic on different businesses. A significant part is going to be spent on promotion of investments to support the economic recovery.

Additional measures for supporting different sectors and enterprises hit by the pandemic, in particular agriculture and tourism, have been adopted. The Bulgarian economy relies heavily on tourism, which has been already hard-hit by the pandemic. The second peak of COVID-19 cases in summer months of 2020 has potential to amplify the negative consequences on these sectors and deepen the economic contraction. BGN 15 million (approx. EUR 7.7 million) will be set aside to support freelance artists and private cultural organisations.

On September 15, attendant classes were resumed. The Ministry of Education and Science had issued detailed guidelines concerning hygienic measures in schools and the transition to remote teaching in case of COVID-19 registered infection. Pupils have to wear a face mask in indoor spaces with the exception of classrooms and gyms. Teachers who work with several classes are obliged to wear face shields; for primary school teachers who teach single classes face protective devices are not obligatory. Compulsory measures include also strict disinfection and regular instructions of pupils about the safety measures. Re-scheduling and separation of classes are recommendable in order to limit contact between pupils. Children with certain chronic diseases or with parents with chronic conditions are allowed to switch to distance learning by parents’ request. If a pupil or a school’s staff member is tested positively, the RHI could order a quarantine of one class or shutting down the entire school. The Ministry of Education and the Ministry of Health have adopted COVID-19 infection threshold that would move all classes to the remote learning mode. In case of quarantined classes and switching to distance learning, parents who cannot use paid annual leave are eligible to receive a monthly allowance. Higher education schools can implement its own set of measures and have the autonomy to decide how to switch between in-person and online classes.

In September, the government announced another set of measures to support local businesses. A total of BGN 148 million (approx. EUR 75.6 million) has been set aside for small, medium and large-size enterprises. All companies can receive additional financial assistance for organising children's playgroups aiming to provide more flexibility for working parents. Additional funds have been earmarked for the agriculture sector. The Council of Ministers approved BGN 60 million (approx. EUR 30.7 million) intended for compensation of medical personnel who are engaged in the treatment of COVID-19 patients.

Between March 18 and 26, the external borders were gradually closed for foreigners with some exceptions. On April 6, the Minister of Health ordered the closure of external borders for individuals irrespective their citizenship arriving from third countries, as well as several EU and Schengen member states (Italy, Spain, France, UK and North Ireland, Germany, Nederland, Switzerland, Austria, Belgium, Iceland, Liechtenstein and Luxemburg) except for Bulgarian citizens or residents coming in. An order of the Minister of Health regulates transits and requirements for quarantine of arriving persons and cabin crews. Entry in Bulgaria for purpose of tourism is prohibited, as well as internal tourism and organised travels abroad.
Supplies of goods are guaranteed through establishment of so-called “Green corridors”. Transit transport of goods is allowed under specific restrictions. Information about recent travel restrictions in other countries and official warnings against non-essential travelling abroad are published regularly on the Ministry of Foreign Affairs website (https://www.mfa.bg/en/customnews/main/24737).
On March 21, a new order has restricted the entering and leaving district cities except for work and health reasons. Internal public transport is not restricted, but many municipalities have re-scheduled it.
On March 13, the parliament declared a state of emergency for one month, and on April 3 extended it to May 13. According to the Constitution, by the state of emergency the exercise of individual civil rights may be temporarily curtailed by law, except for the rights guaranteed by the Geneva Convention. On March 23, the National Assembly enacted a State of Emergency Measures Act, which regulates several measures in support of companies and citizens:
• freezing bank accounts of citizens and hospitals is not allowed; penalty interest rates will be not applied during the state of emergency;
• the statute of limitations for public liabilities, such as tax and social securities is suspended;
• many deadlines have been extended, for instance: ID documents, tax declarations, payments of electric bills, court proceeding deadlines, except for penal cases;
• employers may grant up to half paid annual leave to employees without their consent; mandatory unpaid leave is not allowed without employees’ consent;
• EU development funds may be allocated without standard competition procedure;
• an accelerated process of public procurement in case of emergency situations is enabled, and in particular to speed up the procurement of medical goods.
The armed forces may be mobilised to assist civilian authorities during the COVID-19 outbreak, with a mandate to use force if necessary.
The Council of Ministers has determined the conditions and procedures for payment of compensation to employers in order to retain the employment of workers and employees. The conditions for applying are termination of work (on the whole or in part) or reduction of working hours and at least 20% decrease in sales revenue. The employer will receive 60% of the insurance income of the respected employee for January 2020 as a compensation. The state will cover 60% of the social security and health insurance contributions, as well. In the case of reduced working hours, the compensation is proportional to the off-hours.
During the state of emergency by a decision of the government, regional governors or municipal councils the rent of leased state-owned or municipal-owned real estate may be reduced or exempted for individuals and legal entities whose income or revenues has been hit by the coronavirus as a result of imposed measures and restrictions. Many municipalities have already adopted such measures to support local businesses.
The government has increased the capital of the state-owned Bulgarian Development Bank with BGN 700 million (EUR 358 million) to be used for guarantees to commercial banks for the extension of corporate loans and to provide interest-free loans to employees on unpaid leave (up to BGN 1,500 or approx. EUR 767). Commercial banks have signed a moratorium agreement, allowing companies and citizens to postpone loan payments for the period of six months until the end of the year.
On April 6, the parliament passed revisions of the State Budget Act, which are designed to absorb the shock to the economy caused by COVID-19. According to economic analyses, Bulgaria's starting position is favourable - low unemployment rate, state debt of 20% of the GDP (the third lowest in the EU after Luxemburg and Estonia) and a fiscal reserve of about BGN 10 billion (approx. EUR 5.11 billion). The state budget revisions set a deficit of 2.9% of target GDP and raise the so-called national debt ceiling from BGN 2.2 billion (approx. EUR 1.12 billion) to BGN 10 billion (about EUR 5.11 billion). According to government estimates, the unemployment rate is expected to rise by about 2% in comparison to 2019 to the level of 6.2%. Export of goods and services will fall by more than 16% overall, with the most significant decline in tourism and transport services dropping nearly 26%.
The Ministry of Labour and Social Policy has adopted some measures to provide social support for vulnerable groups during the state of emergency, including free lunch, disinfection products for poor, elderly and disabled and delivery of free food products for elderly and disabled. The Ministry has decided to spend additional BGN 45 million (above EUR 23 million) for home patronage services of elderly and people with disabilities. Additional BGN 20 million (EUR 10.22 million) are set for parents who are in unpaid leave because their children cannot visit kindergarten or school. Initial efforts have been made to provide psychosocial support for elderly, disabled, mothers and children via phone and online platforms. Moreover, online services, provided by speech therapists, art therapists, and other specialists have been designed for children.
Other initiatives include a media campaign for prevention of phone frauds during the epidemic and a National Program for Prevention and Protection against Domestic Violence for 2020.
Many different initiatives for social support have been undertaken at a local level, such as extension of deadlines for payment of local taxes, social support for elderly and other vulnerable groups, disinfection of public areas, free psychological assistance etc. Some cities have also opened calls for volunteers to support local social services. Many private companies donate food products, face masks and other essential goods for elderly and vulnerable people.
In mid-April, plans of an international airline to resume flights to the UK for seasonal harvest workers raised particular concerns. Because of social discontent, the government decided to suspend the flights. The Ministry of Foreign Affairs continues to organise different return flights for Bulgarian citizens working abroad.

After a broad public debate, the government adopted some measures aiming at supporting domestic agriculture and food industries. According to the decree, passed on April 14, the retail chains are obliged to supply Bulgarian farmers’ products, as at least 90% of delivered milk and milk products have to be produced by the domestic agro-food sector.

On April 21, the government introduced a BGN 4.5 billion (EUR 2.3 billion) financial package for supporting different types of enterprises. Special help-schemes for employees on unpaid leave, self-employed, micro, small and medium-sized enterprises hit by the COVID-19 epidemic have been designed, including a provision of interest-free or collateral-free loans. The measures aim to provide liquidity or investment support for established businesses, as well as for start-up enterprises. An economic stabilisation fund will grant loans up to BGN 3.6 million (EUR 1.84 million) to small and medium-sized enterprises, intended for the refinancing of previous liabilities. Additional BGN 150 million (approx. EUR 76.7 million) has been set aside for capital investments in innovative companies with a potential to support the economic recovery after the crisis. BGN 418 million (approx. EUR 213.7 million) is expected to be earmarked for supporting the municipalities. The government has decided on assistance for artists, granted through the National Culture Fund. All these measures involve funds from the fiscal reserve and operational programs without raising the state debt.

By mid-June, further measures to support agriculture and fishing sector were introduced. Additional funds have been distributed for freelancers and private enterprises in the field of art and culture, as well. Employment in the transport sector, including bus companies, tour operators and travel agents will be supported with a package of BGN 40 million (approx. EUR 20.45 million), which will be spent as wage subsidies for six months, starting on July 1. In tourism, the Labour and Social Policy Ministry has proposed additional measures to support employment. Under these measures, the employers will be subsidised with the minimum wage for every worker they have hired, starting July 1, as well. These measures will be applied with the new version of the 60/40 employment retention scheme to achieve a ratio of 80/20 in tourism and transport sector.

In addition to differentiated VAT rates for restaurants and bookstores, the parliament decided to reduce also VAT tax for certain baby foods and diapers from 20 to 9%.

Some social support measures for vulnerable groups has been extended till September or December. Moreover, the Ministry of Labour and Social Policy has decided to allocate BGN 1 million (above EUR 511,000) for computers, tablets and equipment, intended for distance education of children in residential institutions.

Links and sources:
Council of Ministers. Decree on the insurance of main food groups manufactured on the territory of the Republic of Bulgaria in retail chains; http://pris.government.bg/prin/default.aspx  
Ministry of Finance; https://www.minfin.bg/bg/news/11022 
Council of Ministers; http://pris.government.bg/prin/default.aspx
Institute for Market Economics; https://ime.bg/bg/articles/trudnata-aktualizaciya-bez-makroramka-pri-kriza-s-otvoren-krai/ 
Ministry of Health; https://www.mh.government.bg/bg/
Ministry of Labour and Social Policy; https://www.mlsp.government.bg/
Ministry of Tourism; http://www.tourism.government.bg/
National Association of the Municipalities in Republic of Bulgaria; http://www.namrb.org/lang/bg
State Budget Act. State Gazette, No. 28, 24 March 2020, amended 9 April 2020
State of Emergency Measures Act. State Gazette, No. 34, 9 April 2020