Sofia, 20 June 1997 (RFE/RL) -- Bulgarian Prime Minister Ivan Kostov today presented an austere 1997 budget proposal to the parliament, promising to maintain tight restrictions throughout the operation of a currency board system.
Kostov told the parliament that the budget proposal reflects the grim condition of Bulgaria's economy today. He described the budget as one of harsh financial restrictions and the first one tailored to a currency board.
Sofia promised to launch the currency board on July 1 in order to get fresh credits from the International Monetary Fund. Kostov said today that there was no time limit for the existence of the board, which will limit the ability of the central bank to intervene on the foreign exchange market to support the national currency, the lev.
Kostov also warned parliamentarians who favor higher social spending today that exceeding the rigid budget framework would put the country in a disastrous situation. He said if the budget is not adhered to, Bulgaria would violate its agreements with the IMF and risk losing financial support. Sofia typically has revised budget spending several times a year since 1990.