New Cabinet Should Focus on KTB Rescue, Eurozone Entry - Sofianski

Novinite Insider » INTERVIEW | August 5, 2014, Tuesday // 18:02| Views: | Comments: 5
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Bulgaria: New Cabinet Should Focus on KTB Rescue, Eurozone Entry - Sofianski Stefan Sofianski (R) and Bulgaria's ex-President (1997-2002) Petar Stoyanov (L). Photo: BGNES

The caretaker government must tackle the reopening of KTB bank and preparing Bulgaria for Eurozone membership with utmost priority, Stefan Sofianski has said.

The former caretaker prime minister who had steered Bulgaria through in early 1997 following a financial meltdown, said in an interview for on Tuesday that the new interim cabinet should “resolve the KTB case as soon as possible in the direction of reopening” the troubled bank.

The caretaker cabinet led by Prime Minister Georgi Bliznashki and comprising a bunch of Western-educated technocrats was unveiled by Bulgaria’s President Rosen Plevneliev earlier on Tuesday.

According to Sofianski, Bliznashki’s team will work in a more comfortable environment than his own cabinet that was in office for a little more than three months and prepared the introduction of the Bulgarian currency board system to stabilize the economy and rein in rampant inflation.

“One can draw parallels. But back then we had only USD 330 M left in foreign reserves and inflation ran at 200%. Now we have a stable banking system,” Sofianski said.

Commenting on Bulgaria’s aim to enter the Eurozone, he said that Bulgaria now should prepare for entry as quickly as possible while keeping the currency board in place.

According to Sofianski, the caretaker cabinet has to stabilize Bulgaria’s economy in order to generate economic growth that will open the way for adopting the euro, possibly in two or three years’ time.

“The logic is to adopt the euro when we have economic growth,” he said.

Another key challenge that lies ahead of Bliznashki’s caretaker government is to step up efforts to make up for delays in negotiations with the European Commission over the financial framework for the next seven-year funding period, Sofianski said.

“We’ve already lost 2014. […] We should have started to absorb funding for the new period in January-February.”

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Tags: caretaker government, KTB, Eurozone, Stefan Sofianski
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» To the forumComments (5)
Seedy - 10 Aug 2014 // 23:04:29

Just as a matter of interest and since you clearly have an American perspective - do you find any irony in lecturing Bulgaria about how banks and financial regulators should behave? ;)

Capricorn - 10 Aug 2014 // 23:02:17

A Cromer. I congratulate on your blog. You hit the bull's eye perfectly

A Cromer - 10 Aug 2014 // 21:05:21

Shame on the Bulgarian Politicians and the BNB!

KTB Bank has been closed for 52 days now. 52 days that has been a living nightmare for many people; one they can never wake up from and their lives suddenly put on hold. 52 days without a pension check for pensioners, 52 days without a paycheck for workers, 52 days without money for food, medical treatment, medicine or other daily necessitates. 52 days without being able to pay workers salaries, pay bills or buy new products to sell. 52 days worrying about your life’s work and sacrifice being taken away from you in an instant. For the last 52 days Bulgarian Politicians and the Bulgarian Central Bank (BNB) have done nothing for the people of Bulgaria.

Instead of doing what ever it takes to save the bank and the lives and livelihoods of the people and companies who have money in KTB Bank; the politicians and BNB Governors are enjoying their summer holidays, posturing for the October elections and complaining about not having newer luxury cars to drive. It’s amazing to me that a country that is a member of the EU is letting this happen and even more shocking that the EU is standing by and doing nothing. Obviously numerous laws have been broken and article 7 of the Bulgarian constitution violated, but still the bank remains closed and people and companies without money to survive.

It is quite clear that if the Central Bank of Bulgaria (BNB) were doing its job none of this would of or could have happened. It's obvious that a well-orchestrated plan has been carried out to destroy this bank. Why did the Central Bank of Bulgaria close KTB Bank immediately after it asked for help but bailed out First Investment Bank when it asked for help? Why after the audit results showed KTB bank has over 4.5 billion in good assets did President Plevneliev order a new audit and delay the banks opening? Why have the BNB and President Plevneliev ignored the advise from experts inside Bulgaria and all over the world on how to save the bank while it still can be saved? Why do they keep delaying as the good people Bulgaria suffer and KTB Bank dies a slow death?

The answer, in my opinion, they want KTB Bank to go bankrupt and they don’t care about the people in Bulgaria. They only care for themselves and at the risk of collapsing the entire Bulgarian economy and banking system, they are willing to sacrifice this bank for their own self-gain. In a country where someone can try to steal a bank in broad daylight, no wonder Bulgaria has lost over 23% of its population since 1989. Very sad indeed.

Hopefully the good people of Bulgaria will wake up, put up a fight and not let government steal their lives and livelihoods as they did back in 1997.

Shame on the Politicians of Bulgaria, President Plevneliev and the BNB.


A. Cromer
(on behalf of Americans married to Bulgarians, Bulgarian Americans and Bulgarians living in America)

Dogfish - 7 Aug 2014 // 09:27:10

Wonder what this oligarch crook had in KTB..... From a practical angle, there is not much difference between a currency board and Euro-membership. Under the Euro, at least another cabinet like NOresharski wouldn be able to manipulate (no, they didn't. But this is Bulgaria, never say never).

independent - 6 Aug 2014 // 19:13:42

Talking of joining the eurozone is lunacy, especially with a economy as hopeless as Bulgaria's!!!

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