The Bulgarian Socialists, who lead the three-way government, has taken a stance against the call of the opposition rightist GERB party, tipped to win a July 5 parliamentary election, for an urgent deal with the International Monetary Fund (IMF).

"Bulgaria does not need to sign an agreement with the International Monetary Fund for now," Rumen Ovcharov, former Energy and Economy Minister and head of the Sofia unit, said at a meeting with trade unions on Monday.

Ovacharov cautioned that IMF funds came with certain conditions and a deal with the lender will lead to a cut in state expenses, incomes and pensions.

GERB, which according to all opinion polls is likely to win most votes but not an outright majority in July, said they will immediately sign an agreement with the IMF to stand as a guarantee for the country's financial stability if they come to office.

They said they would seek to start immediate talks with the IMF and not for a precautionary, but for a stand-by agreement.

Bulgaria has already entered recession with its economy shrinking 5% from January to March and contracting 1.6% in the fourth quarter on a quarterly basis.

Bulgaria's gross domestic product (GDP) contracted by 3,5% in the first quarter of 2009 on an annual basis, the first time that the country's GDP marked a drop year-on-year since the financial and economic crisis in 1997.

The ruling Socialists claim that Bulgaria is better prepared to weather the global crisis in comparison to other European countries thanks to its prudent fiscal policy and does not need IMF aid for now.

Bulgaria currently operates in currency board regime and the lev is pegged to the euro.

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