National Reform Programme of the Republic of Bulgaria

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National Reform Programme of the Republic of Bulgaria 2012 Update April 2012 Sofia, Bulgaria Table of Contents 1. OUTLOOK FOR THE DEVELOPMENT OF THE BULGARIAN ECONOMY......................................................................................... 9 1.1 Macroeconomic Scenario for the Development of the Bulgarian Economy 9 1.2 Alert Mechanism 13 2. IMPLEMENTATION OF PROGRAMMES AND MEASURES IN 2011 ......................................................................................... 19 Addressing Country-Specific Recommendations 1 and 2 (CSR 1 and CSR 2) 19 Addressing Country-Specific Recommendation 3 (CSR 3) 23 Addressing Country-Specific Recommendation 4 (CSR 4) 23 Addressing Country-Specific Recommendation 5 (CSR 5) 25 Addressing Country-Specific Recommendation 6 (CSR 6) 32 Addressing Country-Specific Recommendation 7 (CSR 7) 34 3. SMART GROWTH ................................................................................................................................................... 37 3.1 Policy Strategy for Achieving Smart Growth 37 3.2 Scientific Research and Innovation 38 3.2.1 Promoting R&D Investments 38 3.2.2 Improving the Access to Financing and Institutional Support for Enterprises, including SMEs 39 3.2.3 Improving the Quality of Scientific Activity, including by Developing Human Potential for Scientific Research and Innovations and Realising the Science-Business Connection 40 3.2.4 Building and Improving the Scientific Research and Innovation Infrastructure 40 3.3 Education and Training 42 3.3.1 Increasing the Access to Education, Retaining the Pupils in the Educational System and Raising the Education Level 42 3.3.2 Improving the Quality of Education 43 3.3.3 Raising Knowledge and Skills through Lifelong Learning 45 3.4 Information and Communication Technologies 45 4. SUSTAINABLE GROWTH ........................................................................................................................................... 47 4.1 Policy Strategy for Achieving Sustainable Growth 47 4.2 Efficiency and Sustainability of Public Spending 48 4.2.1 Pension Reform and Social Security 48 4.2.2 Improving Public Spending Effectiveness 49 4.3 Climate and Energy 50 4.3.1 Increasing Energy Efficiency and Reducing Energy Dependence 50 4.3.2 Electricity Market Liberalisation 52 4.3.3 Environmental Protection, including Development of Technological Infrastructure 53 4.4 Business Environment 54 4.4.1 Strengthening Administrative Capacity 54 4.4.2 Reducing the Administrative Burden and Improving the Quality of Administrative Services 55 4.4.3 Deployment and Effective Implementation of e-Governance 58 4.5 Infrastructure 59 4.5.1 Road and Transport Infrastructure 59 4.5.2 Sustainable and Integrated Urban Development 60 5. INCLUSIVE GROWTH ............................................................................................................................................... 61 5.1 Policy Strategy for Achieving Inclusive Growth 61 5.2 Employment 62 5.2.1 Promoting Employment and Reducing Unemployment 62 5.2.2 Improving the Match between Supply and Demand on the Labour Market 65 5.3 Poverty and Social Inclusion 66 5.3.1 Poverty Reduction and Social Inclusion of Vulnerable Social Groups 66 5.3.2 Improving the Quality of and Access to Healthcare Services 67 6. CONTRIBUTION OF THE STRUCTURAL FUNDS AND THE COHESION FUND TO THE IMPLEMENTATION OF THE NRP UNTIL 2015 .............. 69 6.1. Measures for Improving the Absorption of the Structural Funds and the Cohesion Fund 69 6.1.1 Measures in process of implementation 69 6.1.2. Planned measures 70 6.2 Contribution of the Structural Funds and the Cohesion Fund to the financing of the NRP measures at present and projections until 2015 71 6.3. Projections for the funds’ absorption under priority themes contributing to the achievement of the NRP targets by 2020 72 7. HORIZONTAL AND METHODOLOGICAL ISSUES ................................................................................................................. 75 7.1 Political Participation (Parliament, Regional and Local Authorities) and Participation of the Social Partners 75 7.2 Coordination of Sectoral Policies at Regional and Local Level 76 7.3 Instruments for Monitoring 77 8. ANNEXES ............................................................................................................................................................. 79 List of Tables Table 1:Assumptions on Key Macroeconomic Indicators ............................................................................................ 10 Table 2: Key Indicators of the 2011-2015 Macroeconomic Scenario ........................................................................... 10 Table 3: Progress in financial implementation of OPT by priority axis and priority project, ........................................ 59 List of Figures Figure 1: Contributions to annual GDP and GVA growth, by component (pps) ............................................................. 9 Figure 2: Number of Employed* and Unemployment Rate** ..................................................................................... 11 Figure 3: Real ULC Dynamics, 2009=100 ...................................................................................................................... 12 Figure 4: Trade Balance by Type of Goods, mln EUR ................................................................................................... 14 Figure 5: Net International Investment Position, by components, mln EUR ............................................................... 14 Figure 6: FDI Inflows by Main Economic Sector, mln EUR ........................................................................................... 15 Figure 7: REER based on different deflators, 1999=100 ............................................................................................... 16 Figure 8: Allocation of NRP (2011-2015) measures ...................................................................................................... 19 List of Boxes Box 1: Priority projects under OPT for which direct grant award procedures have been launched ............................ 59 Box 2: List of main and alternative projects, which also cover part of the extended TEN-T network.......................... 74 List of Annexes Annex 1: Assessment of the country-specific recommendations and key macro-structural reforms in the 2012 update of the National Reform Programme of the Republic of Bulgaria ..................................................................... 80 Annex 2: Report on the implementation of the National Targets in pursuance of the “Europe 2020” Strategy targets and other key commitments, set forth in the 2012 update of the National Reform Programme of the Republic of Bulgaria ................................................................................. 90 Annex 3: Information on the Project Implementation under Priority Axis 2 “Development of road infrastructure along the Trans-European and national transport axes” under OPT: ................................................. 108 Annex 4: Sources of financing of measures promoting the use of RES and increasing the energy efficiency, as well as tax incentives to promote the use of RES and increasing the energy efficiency ........................................ 109 Annex 5: Absorbed and Contracted Funds for financing measures related to the achievement of higher growth and more jobs, UMIS data as of 20.03.2012 (EUR million) ................................................................. 111 List of Abbreviations AGS – Annual Growth Survey CSR 5 – Country-Specific Recommendation 5: “Take AIS – automated information system steps to address the challenge of combating poverty ASA – Agency for Social Assistance and promoting social inclusion, especially for vulnerable ASED – Agency for Sustainable Energy groups facing multiple barriers. Take measures for Development modernising public employment services to enhance BASEA – Bulgarian Accreditation Service Executive their capacity to match skills profiles with labour Agency market demand; and focusing support on young people BBMRI − Biobanking and Biomolecular Resources with low skills. Advance the educational reform by Research Infrastructure adopting a Law on Pre-School and School Education and BIA – Bulgarian Invest Agency a new Higher Education Act by mid-2012.” BIM – Bulgarian Institute of Metrology CSR 6 – Country-Specific Recommendation 6: “Step up BIS – Bulgarian Institute for Standardisation efforts to enhance administrative capacity in key BSMEPA – Bulgarian Small and Medium-Sized government functions and regulatory authorities, in Promotion Agency order to make public services more effective in CAR – Council for Administrative Reform responding to the needs of citizens and businesses; CAW – construction and assembly works introduce and implement effectively measures to check CCEUFM – Coordination Council for European public procurement on the basis of risk assessments, Union Funds Management, with Bulgaria’s Council strengthen the capacity of the authorities to prevent of Ministers and sanction irregularities, in order to improve quality CCU – Central Coordination Unit and value-for-money in the use of public funds.” CFP – Consolidated Fiscal Programme CSR 7 – Country-Specific Recommendation 7: “Abolish CLARIN – Common Language Resources and barriers to entry, guaranteed profits arrangements and Technology Infrastructure price controls and ensure full independence of the CoM – Council of Ministers Bulgarian Energy Regulator,
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