Economy Expert Hanke Firmly against Bulgaria IMF Bailout

Finance | May 15, 2010, Saturday // 11:13|  views

Steve Hanke, a Professor of Applied Economics at the Johns Hopkins University in Baltimore, says Bulgaria must stay away from any IMF bailout. File photo

Bulgaria must say a firm “NO” to any agreements with the International Monetary Fund (IMF), according to renown economy expert Steve Hanke.

Hanke, cited by the Bulgarina National radio, BNR, said Saturday a loan agreement would create the impression the State is incapable and lacks capacity to deal with its problems while eventual good results would be attributed to IMF.

“The Bulgarian situation does not require such move at all,” Hanke, a Professor of Applied Economics at the Johns Hopkins University in Baltimore, known best in Bulgaria as the architect of the currency peg, declared.

The expert further pointed out that when a country is facing bankruptcy, a loan could be a solution, but it would be really a last resort and not at all a guarantee for success, giving as examples Russia in 1998 and Argentina in 2001.

According to Hanke, people who give such proposals are either ignorant about finance or politics or both.

“I can say one thing – there isn’t a Prime Minister, who wants to be perceived as weak. The same is true for Boyko Borisov,” Hanke said.

On Friday, Finance Minister, Simeon Djankov, declared Bulgaria will not seek an IMF bailout and will not issue eurobonds because it does not need to.

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Tags: finance minister, Simeon Djankov, IMF, bailout, eurobonds, anti-crisis measures, Steve Hanke

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