Bulgaria needs no IMF bailout aid: minister

SOFIA

Bulgaria does not need a bailout aid agreement with the International Monetary Fund (IMF), local press reported Wednesday, citing the Finance Minister Plamen Oresharski. 

Commenting on a recent political discussion about a possible agreement with the IMF, Oresharski said at a news conference in the Black Sea city of Burgas that the IMF and the European Commission believed that Bulgaria was one of the few EU members who had the chance to complete its state budget objectives without bailout aid.

In his words, if Bulgaria asked the IMF for such an agreement, that would be a sign of insecurity and would place Bulgaria together with the insolvent states.

“If we continue our prudent fiscal policy, we could get out of the crisis without using bailout funding. This is also going to guarantee our quick accession to the Eurozone. The opposite is ridiculous. No one would let even in the Eurozone waiting room countries that are in a pre-bankruptcy condition,” Oresharski said.

According to the minister, any potential bailout aid could be used only to support the country’s balance of payment, but not the budgetary expenditures. This money could be used for regular or emergency financial operations, the regular ones are for covering the foreign debt, emergency ones are saving banks, he explained.

The finance minister said that judging from the experience of Romania, Latvia and Hungary, the government would have to meet certain conditions after signing an agreement with the IMF. They are likely to include streamlining of the public sector, wage cuts and cuts in public expenditures.

He said that these parameters would be subject to negotiation and if agreement was reached, they would be discussed in detail.

Oresharski stressed that Bulgaria had sufficient reserves, and its first debt payments were due in 2013 and 2015 so the country had no grounds to request bailout aid. He pointed out that the currency peg was a guarantee for the financial stability of the Bulgaria.

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