No Worries on Bulgaria's New Debt - Socialist MP
There should be no worries about a recently passed state budget revision involving taking a EUR 1 B loan, according to Bulgarian Socialist Party MP Rumen Gechev.
"Every budget needs a loan now and them, this is common practice for most countries in the world," said Gechev for Nova TV Saturday.
The socialist MP further said he is confident that Bulgaria will be able to repay the new loan.
He also said that even after it takes the credit, Bulgaria will remain the EU member state with the lowest debt-to-GDP ratio.
Gechev moreover added that the debt is taken in part to preserve fiscal stability by maintaining its fiscal reserve to levels around BGN 4 B.
"By the way, those are the levels of the fiscal reserve approved by Bulgaria's former government of our political rivals GERB," added Genchev.
The socialist MP also defended the degree of discretionary spending in the budget update.
"Nowhere in the world do you specify what every cent in the budget goes for. This budget is no different," said Gechev.
Bulgaria's President Rosen Plevneliev had vetoed the budget revision, foremost due to an alleged lack of transparency regarding the intended spending of the loan.
Friday the Bulgarian Parliament overthrew the President's veto, with the votes of all political groups except those of former rulers GERB.
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I am sure that the need for the Government of Bulgaria to borrow and spend a Billion Euros will not go unnoticed, and will be approved by the vast majority of world economists since the alternative is mass bankruptcy and further unemployment.
An exception will be Prof. Steve H. Hanke, who by his false and nearly universally repudiated reasoning, persuaded the sovereign Republic of Bulgaria to abandon its right to have a Monetary Policy. If Bulgaria had a Monetary Policy, this borrowing would not have been needed.
Of course, the fact that the "borrowed billion" goes to the crooks, as President Plevneliev has noted in his veto message, is regrettable.