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KTB’s Fate to Become Known in October, Plevneliev Tells Reuters

Politics | August 6, 2014, Wednesday // 10:04| Views: 1320 | Comments: 0
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Bulgaria: KTB’s Fate to Become Known in October, Plevneliev Tells Reuters Bulgarian President Rosen Plevneliev, photo by BGNES

Bulgaria will decide the fate of troubled Corporate Commercial Bank (KTB) only after the results of an audit become known in October, the country’s President has told Reuters.

Rosen Plevneliev said that for the moment “no politician and no government can do anything but just wait to see the numbers."

In an interview for Reuters Plevneliev said that the Bulgarian National Bank (BNB) could decide around mid-October whether to stabilize KTB or let it go into insolvency, and to what extent to protect depositors. He also pledged that his administration would fully support the BNB’s efforts.

Plevneliev also asked the holders of a dollar-denominated KTB bond that matures on August 8 to be “patient” while the audit at the bank continued. As Reuters reported last week, the bondholders are planning to sue the government if the bond defaults and KTB is tipped into insolvency.

In other highlights of his interview Plevneliev, who on Tuesday named a caretaker government to run the country until snap elections on October 5, said the cabinet  would push for Bulgaria to join the EU’s  Single Supervisory Mechanism to ensure European supervision of Bulgarian banks and would kickstart a process to enable Bulgaria to join the Eurozone by 2020

The President also said that he would propose to increase Bulgaria’s fiscal deficit to just under 3% from a planned 1.8%. Such a proposal has to be approved by the government that will take office after the October election and to be voted into law by parliament.

The outgoing Parliament, which Plevneliev is going to dissolve on Wednesday, on Monday refused to discuss an update to  the 2014 state budget despite Plevneliev’s repeated calls for a budget revision to give the caretaker government more room for maneuver in the run-up to the election.

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Tags: Plevneliev, KTB, caretaker government, budget revision, Bulgarian National Bank, BNB, audit
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