Lingorski recalled that six or seven years ago, when he moderated an EU forum, there were no indications that the EU industry, as well as both the national and European economies, would go through a series of historically significant disruptions. “And yet, here we are today, surprisingly in much better shape than my fellow economists had predicted,” he commented.
According to Lingorski, the last five years have been highly instructive.
Following COVID-19, the global economy was hit by a succession of shocks, each large enough to trigger a severe recession — a global pandemic causing catastrophic supply chain disruptions, the bloodiest land war on the European continent since World War II, which ended the era of cheap and stable energy in Europe, the most severe inflation shock in 15 years, tariff increases unseen since the 1930s, and now a military conflict that has disrupted the world’s main oil chokepoint. “Together, these shocks have been relentless,” the financier noted.
Lingorski stated that policymakers responded decisively with fiscal and monetary measures of unprecedented scale, while the private sector adapted in ways that microeconomists had not anticipated. Supply chains were reconfigured, companies diversified resources, and the digitalization of trade made a quantum leap, particularly in the year following COVID, he pointed out. At the same time, household balance sheets remained stable, supporting consumption and confidence.
Lingorski emphasized that the financial sector, having recently gone through a global financial crisis, had been reformed, well-capitalized, and stable. “In fact, the banking system and capital markets became part of the solution rather than part of the problem with the potential to exponentially worsen it,” he said. He also acknowledged the role of “luck” — namely the decline in energy prices at a time when there were fears they would continue rising following Europe’s 2022–2023 energy crisis.
“Counter-shocks arrived exactly when we needed them,” Lingorski commented. According to him, without Germany’s fiscal expansion and the pre-positioning of experts before the announcement of the new U.S. tariffs, Europe would most likely already be in recession.
Lingorski noted that the eurozone economy had been growing steadily until the latest oil supply disruption and energy price shock. At the beginning of the year, the outlook was moderately positive, interest rates were close to neutral levels, and inflation was near target, he said. More recently, however, growth forecasts were revised downward to a modest 0.9 percent for the current year, while inflation remains above target. “This is a particularly difficult combination, especially for central banks and policymakers,” Lingorski stated. According to him, if energy supply disruptions continue long enough, the adjustment will shift from prices to rationing.
Regarding inflation in Bulgaria, Lingorski recalled that it stood at 6.8 percent in April, noting that while the external shock is the same, “the internal amplifiers are our own.” According to him, three structural factors are driving prices upward.
First, the structure of the economy — Bulgaria’s higher energy intensity and greater dependence on imports lead to a faster and stronger transmission of external price shocks. Second, the business environment and institutional framework — when competition is limited, prices rise faster and normalize more slowly, making inflationary processes more persistent. Third, fiscal policy has amplified rather than softened the economic cycle, Lingorski said. Wage growth in the public sector has outpaced productivity, while automatic indexation mechanisms have further intensified the effect. Under conditions of constrained supply, this translates directly into secondary inflationary pressure.
Lingorski pointed out that Bulgaria simultaneously has a well-capitalized, liquid, and profitable banking system above EU average levels, alongside a persistent fiscal deficit and accelerating public debt growth. “The direction and pace of debt dynamics are just as important as the current level,” he explained. This directly affects the automotive sector as well, making the planning horizon more uncertain and investment decisions more expensive.
According to Lingorski, the automotive sector has a major role to play in electric mobility, as it is no longer merely part of Europe’s environmental agenda, but is becoming a key pillar of the continent’s future energy security. He added that Europe’s structural gap must also be closed — the single market still needs to be completed, as significant barriers remain.
Lingorski also noted that European capital markets remain too shallow. Europe saves more than any other region, but these savings do not efficiently reach the productive investments the economy needs. Fiscal space has narrowed, and almost every policy response over the past four years — including stimulus measures, subsidies, industrial policy, and defense spending — has carried inflationary consequences. This, he argued, means tighter control over current spending, limiting non-targeted expenditure increases, rebuilding fiscal buffers, and ending automatic indexation mechanisms.
“The lesson from the global financial crisis is that austerity measures are not the way forward. The path ahead is accelerating growth driven by productivity, and productivity is driven by innovation,” he commented.
According to Lingorski, the last five years have taught valuable lessons about energy dependence, the limits of fiscal space, and the fragility of supply chains, but also about the resilience of the private sector when supported by the right macroeconomic policies.
