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Bulgaria's Currency Falls - Will The Government?


By Maxim Behar



Sofia, May 13 (RFE/RL) - "This shop is closed - Down with the government!" reads a sign on a computer equipment shop in central Sofia. And our Sofia correspondent reports growing hysteria as thousands of shops across Bulgaria are closed and expected to remain closed until there is some clarification of the country's financial crisis.

One currency trader on the street found humor in the crisis, as he told RFE/RL: "We are living in the only country in Europe without a daily currency rate - our currency exchange rate changes by the hour," he said.

Some shops are calculating prices changes on individual purchases, and virtually all shops still open are marking prices in Dollars and Marks. Our correspondent said only one word describes what he has seen: chaos.

Hoarding is becoming commonplace, with bread and cheese unavailable in some cities, and the virtual disappearance from pharmacy shelves of imported medicines.

Professor Garabed Minasjan of Bulgaria's Academy of Sciences tells RFE/RL that he believes, "The fatal problem is that now nobody from the economic decision-maker team of the government knows what is happening in the country."

But Bulgaria's governing Socialist Party today approved the tough reform plans drawn up by the cabinet, and urged Prime Minister Zhan Videnov to act swiftly to avert the country's economic collapse. The Socialist Party today also announced it supports the government's plans to shut down loss-making firms, to stabilise the banking sector and to accelerate privatisation. The action follows a warning from Videnov that "Bulgaria faces total economic destabilisation if the party does not support the government's urgent measures."

Some members of the government has warned that the new policy will require the immediate closing of almost 200 loss-making firms. There is talks on the streets of Sofia of strikes this week to protest the closing plans.

Bulgarian reports have speculated on the possible resignation of Finance Minister Dimitar Kostov. But the reports also note last week's resignation of Interior Minister Ljubomir Natchev, and conclude that two resignations so close together would further damage the government's reputation.

Nikolaj Dobrev, referred to as a hard-liner has been approved as the new Interior Minister, amid what reports call a widespread fear in the country of growing lawlessness and criminality.

Ironically, officials of Bulgaria's Central Bank tell RFE/RL that last year was one of Sofia's most successful in dealing with its foreign debt payments. But the debt has now risen to more than 9,000-million dollars, and Bulgaria's hard currency reserves have fallen to less than 700-million dollars.

An International Monetary Fund (IMF) team is in Bulgaria, and reports say the IMF is expected to lend Sofia about 150-million dollars in July. But payments on Bulgaria's debt begin coming due in June.

Despite Socialist Party support for the government plan, correspondents note a deep division in the Party over reform. And the correspondents say strong party support for the government program is designed to influence the IMF, which might be reluctant to offer any assistance to a government which might be about to fall.

Reports say that as thousands of people are fired in the government's restructuring plan, the Socialist Party is threatened with a loss of public support, and the loss of obedience of the parliamentary majority. But virtually all observers agree that the collapse of the government and new elections would only heighten tensions and further threaten Bulgaria's economic stability.
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