Bulgaria Finance Minister Warns against Rash Financial Interventions

"Unusual interventions in financial systems must come with a good prescription," Finance Minister Plamen Oresharski told a forum. Photo by BGNES

The Finance Minister in Bulgaria's Socialist-led government has admitted to the success of reforms implemented by right-wingers after the severe economic crisis in Bulgaria in the late 90s.

"Following the crisis in 1997, the country took on an upward course very quickly thanks to reforms, which were described as unusual," Minister Plamen Oresharski said at a discussion about the global economic crisis, organized by his department.

According to him the scale of the current crisis once again calls for unusual measures, but warned that these should be tackled with caution as otherwise they may lead to long-term lack of sustainability.

"Unusual interventions in financial systems must come with a good prescription," the minister told the forum.

Foreign experts expressed the hope that the economic crisis has reached a turning point, but warned that a quick rebound is unlikely. They stressed that the global policies of world bodies such as the World Bank, G-20 and G-8 should take into account the interests of small open economies, such as those of Bulgaria and Greece.

The politics of the Socialist cabinet, headed by Zhan Videnov, were responsible for the severe economic crisis in Bulgaria in the 90s that escalated in the winter of 1996 and eventually toppled the government.

The riotous winter of 1996-7 saw massive street protests in Bulgaria after the country's banking system rumbled to pieces and precipitous inflation emerged when the rate of the Bulgarian lev went down from BGN 60 for USD 1 to BGN 3000 for USD 1.

As a result, the right-wing UDF governed Bulgaria from 1997 to 2001 led by the reform-minded Prime Minister and then UDF chair Ivan Kostov.

Kostov is credited for turning around his country's fortunes by carrying out long-delayed economic reforms and privatization of state-owned enterprises. However, reformist policies led to increased unemployment and his privatization policies have been widely criticized for hurting Bulgaria's interests.

 

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