Bulgarian Socialists Accuse Govt of Insufficient Support for Business Sector

Bulgarian Economy Minister Traicho Traikov came under fire from socialist MPs over the government's allegedly inefficient policy for supporting the business sector. Photo by BGNES

A total of 1375 companies declared bankruptcy between 2008 and 2011, or less than 1% of all entities which started functioning in the period, said Economy Minister Traicho Traikov in Parliament on Friday.

The figures cited by Traikov came in response to a question of Kornelia Ninova, an MP from the Bulgarian Socialist Party (BSP), about the government's policy for supporting the business sector.

Ninova claimed that 350 firms were expected to go bankrupt in 2011.

"Newly registered companies for 2011 are 38 000 and their number is on the rise for the first time since the onset of the crisis", Traikov stated, adding that the ratio was once again 100:1 in the annual statistics.

Bulgaria's Minister of Economy, Energy and Tourism explained that small and medium-sized enterprises (SMEs), which were hardest hit by the economic downturn, would witness the introduction of legal amendments aimed at helping them overcome periods of financial difficulty.

 "The second chance policy envisages a rehabilitation procedure for companies on the verge of bankruptcy. The suggested legal changes provide for an opportunity for the debtor to seal an agreement with the creditors or to transfer property to a third party – a potential buyer," Traikov explained.

He went on to enumerate the schemes under the Competitive Power Operational Program and the financial instruments under the JEREMIE initiative which offered assistance to business enterprises.

"From your reply I gathered that the fact that 350 companies will go bankrupt is nothing to worry about," Ninova snapped.

The socialist MP insisted that a part of the registered companies had no business activity, while close to 600 000 firms were not going to re-register.

Ninova said that BSP recommended that the state place BGN 500 M with the Bulgarian Development Bank for support for SMEs.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!