Sofia, May 23 (RFE/RL) - Bulgaria's President Zhelyu Zhelev charges that his country's economy is on the verge of collapse, and that the ruling socialists are to blame.
This surprising outburst for a country's president came in an
interview yesterday published in the mass-circulation daily 24
Tchassa (24 hours) in reponse to financial turmoil. The country's
currency has plunged in value and two banks have declared bankruptcy.
Zhelev says that the government run by the ex-communist, now-socialist supporters of Premier Zhan Videnov bears responsibility
for delaying needed reforms for a year. Zhelev said: "Something even
worse has become apparent. They (the socialists) cannot govern at
The two banks' official declaration last week of bankruptcy created
a market panic. First, the nation's largest private bank closed. And
two representatives of the National Bank replaced its managing board.
Then, the state-owned Mineralbank followed. It had been regarded as
one of the most reliable in Bulgaria.
In recent months, three other banks had already shut down. Two of
these - Crystalbank and Private Agricultural & Investment Bank -
are suing the government and their bankruptcy procedures are
The head of International Monetary Fund Bulgarian Mission, Anne
McGuirk, has been in Bulgaria for more then two weeks pressing for
hard reforms. She issued a statement, saying what she called
"credit millionaires" must be sued as soon as possible, because they
are the main reason for the bank crises. She said that thousand of
companies in Bulgaria borrowed sums of money, and then went bankrupt
or disappeared. She said that both bankers and creditors should be
sued in special courts.
The government recently announced plans to close scores of
heavily-indebted state-run companies and troubled banks.
The Bulgarian currency, the lev, has been dropping in value. It
reached 124 to the dollar yesterday, from 70 to the dollar in
January. The government last week set the basic annual interest rate
at 108 percent, the highest in Bulgaria ever.
National Bank Governor Ljubomir Filipov says he cannot predict what
will happen. As he put it, "All now depends on an agreement with the
IMF" that would provide "about a billion of dollars" in aid for
Bulgaria. Vice Premier Roumen Getchev, who is responsible for
economic reform, said he is optimistic an IMF agreement will be
signed next month.
A week ago in a Sofia restaurant, McGuirk's return ticket to
Washington, along with her purse, passport, credit cards, and several
hundred dollars, were stolen. A quip is circulating among Sofia
bankers that her stolen purse will be returned only if she accedes to
a favorable agreement between the IMF and the government.
Another development exacerbating economic conditions has been an
influx of counterfeit currencies. Central Bank officials said Tuesday
that counterfied U.S. dollars and German marks are flooding Bulgarian