FinMin Overexcited by S&P's Stable Outlook for Bulgaria

Finance | December 21, 2011, Wednesday // 17:33|  views

Bulgaria's FinMin Djankov (left) and PM Borisov (right) got excited by Bulgaria's stable outlook granted by S&P. Photo by BGNES

Bulgaria's Finance Minister and Deputy PM Simeon Djankov has greeted with excessive excitement the news that Standard&Poor's has affirmed Bulgaria's outlook to stable.

"Only two EU countries have had their credit rating affirmed as stable this year," Djankov declared in his comment on the S&P announcement.

In his words, the greatest news is possibility that S&P might consider increasing Bulgaria's rating "if the government continues its current structural reforms and manages to put them fully into operation."

According to the Bulgarian Finance Minister, the key reforms that influence Standard&Poor's decision include the "strong and consistent government policy in the field of fiscal discipline, the low foreign and domestic public debt, and the solid opportunity for growth within a five-year period."

He also praised the improving absorption of EU funds, and the recently adopted pension system reforms and the structural reforms at the vastly troubled Bulgarian State Railways BDZ.

Djankov stressed that S&P has confirmed the forecast of the government for a budget deficit of below 2.5% of GDP in 2011, reminding the government projection for a deficit of about 1.3% in 2012.

He further noted that according to the international credit rating agency in 2011 and 2012 Bulgaria will be one of the few EU countries with positive trade balance; Djanvko especially pointed out that Bulgaria is going to have a positive trade balance in the bilateral trade with Germany for the first time since 1995.

"For the past 16 years we have been importing more from Germany than we have been exporting. 2011 seems to be the first year in which our producers exported more for Germany," the Finance Minister stated, as cited by BGNES.

Bulgarian PM Boyko Borisov in turn declared that the recent upping of the retirement age and the "reforms" in the railways are accepted as "fully correct measures."

"We now have to rely on all Bulgarian parliamentary parties to support the Financial Stability Pact. This will be a common success of ours to amend the Constitution, and to be the first in Europe to live up to the golden rule of 3% budget deficit," Borisov is quoted as saying.

He referred to the Financial Stability Pact, a brainchild of Finance Minister Simeon Djankov, which boils down to amending the Constitution to ban governments from accruing a deficit of more than 2% of the GDP, among other fiscal austerity measures. The Pact is yet to be voted on by the Bulgarian Parliament but for the time being it remains unclear whether the ruling party GERB can muster the required ? majority to amend the Constitution.

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Tags: Ratings Service, Poor's, standard, Bulgaria, Moody's, Fitch, credit ratings, credit rating


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