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Bulgaria: Prime Minister Unveils Stabilization Program

By Petko Giorgiev and Ivo Indzhev

Sofia, 18 March 1997 (RFE/RL) - Bulgaria's caretaker Prime Minister Stefan Sofianski went on national TV last night to outline the main measures of a program designed to stabilize Bulgaria's chaotic economy.

Sofianski called for understanding and support for the reform program, saying it would lead to increased unemployment on the road to economic progress.

He said prices would be fully liberalized. He said only bread, milk, white cheese and chicken prices would be subsidized, and only temporarily. He also said loss-making state enterprises would have to be closed.

Sofianski said all wages will be increased by 70 percent from April 1, and that a new social security system would be created. He said as many as 58,000 people might lose their jobs, but he said the government would compensate them, and will work to create jobs rather than subsidising industries.

Earlier in the day Sofianski and an International Monetary Fund mission reached tentative agreement on creating a finance board with power to introduce tough austerity measures. As part of the deal the IMF would provide Bulgaria with credits totalling some $700 million.

Later, opposition leader Ivan Kostov said the agreement with the IMF ends a sharp confrontation on the direction the country's economic reform should take.