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Commenting article: Bulgarian National Bank Governor: Bulgaria Is Informally in Eurozone

The Governor of the Bulgarian National Bank, Ivan Iskrov, said Thursday the currency peg practically made Bulgaria an informal member of the Eurozone.

Iskrov took part in the Invest in Bulgaria 2009 Summit, which took place in Sheraton Hotel in Sofia.

He said that the stable currency rate of the Euro compared to the Bulgarian Lev was the reason to assume that Bulgaria is virtually in the Eurozone. That is a result of the important decision of all Bulgarian governments since 1997 to keep the Currency Board until being accepted in the Eurozone.

Iskrov is convinced that Bulgaria is a very attractive place for investors, because it is not any longer "a catching up economy", but "an advancing one".

"It is about time that media and investors try to differentiate between each country, whether it is from Central and Eastern Europe, Asia, or Latin America... There are many different criteria to describe each country as being reliable for investments or not", Ivan Iskrov said.

"The crisis in Bulgaria is more an economic one, than financial... It resulted from an import of issues form other countries... If we are part of the European Union, and investors, such as Germany, Italy, and Greece, experience financial difficulties, Bulgaria will be affected, too", Iskrov explained.

Bulgaria's foreign debt is a long term one, the National Bank Governor pointed out. He also stressed its significant decrease: Bulgaria's foreign debt was 100% of its GDP in 1998 but it has been lowered to 16% of GDP in 2008.

He also said that 70% of the Bulgaria's total national debt was intra-business, which means that banks, or companies loan money to their subsidiaries", Iskrov said.

"Bulgaria keeps a big budget surplus as part of its fiscal policy in order to remain independent. Our country is attractive for investors but its potential is in the mid and long-term investments. In the medium and long run, Bulgaria will boast a higher than the average EU economic growth."

"Some western, and especially anglo-saxon medias are trying to put the entire fault for the current economic crisis on the Central and Eastern European countries", Ivan Iskrov commented. On Wednesday, the central banks of five Eastern European countries, including Bulgaria, have slammed as "simplified and misleading" reports the region's banks were at risk.

Honterus - 7 Mar 2009 // 17:16:38


Let's hope that eventually the outer ring ( centura ) will be be expanded to 4 lanes ( 5 years from now maybe) and the Basarab bridge will be completed ( 3 years from now - my guess). Then it will be certainly better.

venbon - 7 Mar 2009 // 09:57:39

Hi Honterus,

You are right, the traffic eased in Bucharest recently, but in order to be normal the city needs a normal circle ring('centura'). The nice boulevards in the center are giving a false impression on an efficient infrastructure. Otherwise,besides traffic, I am still happy staying here.

Honterus - 6 Mar 2009 // 23:05:41


One has to admit that the traffic in Bucharest eased up a little since the crisis started...


venbon - 6 Mar 2009 // 17:31:42

I am Bulgarian

Romania has around 250-270km of highways, so again not enough for the size of the country. This makes the logistics here a real challenge.

Organized crime as car steeling etc. is controlled and not visible as in Bulgaria. THe result is that the people are more relaxed and the image of the country is better.

Economical crime on the high government positions is difficult to judge, but I guess is not less than the one in BG. Simply there are more resources here to be stollen

CreepyS - 6 Mar 2009 // 15:26:14

Weve got like 450 km of highways in total, none is finished yet from one end to the other as planned.

If Romania is even worse than us in km highways, then your guys must be stealing infrastructure funds even more than our guys, so the Romanians must be not that bad in corruption and organized crime. Maybe they are less violent and less involved in the drugs business.

NellieotAmerica - 6 Mar 2009 // 14:27:32


"The biggest disadvantage that Bulgaria has vs Romania is the organized crime."

Why? The crime in Romania is not as well organized and managed as in Bulgaria? Not a problem, Bulgaria can export some excellent mutri to Romania to lend a helping hand and organize things a bit better. ;-)

venbon - 6 Mar 2009 // 14:12:38

Let us be fair when writing:

I live in Romania and can state that Romanian infrastructure is less well developmed than the Bulgarian one. On a 2.5times the terithory Romania has less highways and less first class ways. I do not want to mention Bucharest traffic. The citizens of Sofia still do not know what means jams

The biggest disadvantage that Bulgaria has vs Romania is the organized crime.

mrposhrat - 6 Mar 2009 // 00:24:40

If 70% of debt is intra-bank, maybe the Governor is preparing everyone for an IMF bailout and a currency float, as per what has just happened in Armenia?

simonaki - 5 Mar 2009 // 18:33:36

Bulgaria economic and financial future is completely at the mercy of foriegn banks and investors. Now the investors are packing thier bags and leaving on the back of Iskrov's rediculous comments. Is this man trying to save BG or detroy it?

CreepyS - 5 Mar 2009 // 17:05:31

I think what would happen is that Serbia will be better economically than us when they join the EU (we still dont have a single finished highway between two end points) and Turkey and Romania will continue to attract more investors than BG because of higher productivity, better infrastructure and less bureaucracy.

CreepyS - 5 Mar 2009 // 17:01:23

"Iskrov is convinced that Bulgaria is a very attractive place for investors, because it is not any longer "a catching up economy", but "an advancing one"."

This must be the boldest lie for today.

Bulgaria news (Sofia News Agency - is unique with being a real time news provider in English that informs its readers about the latest Bulgarian news. The editorial staff also publishes a daily online newspaper "Sofia Morning News." (Sofia News Agency - and Sofia Morning News publish the latest economic, political and cultural news that take place in Bulgaria. Foreign media analysis on Bulgaria and World News in Brief are also part of the web site and the online newspaper. News Bulgaria