PM: US Debt Crisis Will Not Impact EU Funding for Bulgaria

Politics » BULGARIA IN EU | August 7, 2011, Sunday // 11:32
PM: US Debt Crisis Will Not Impact EU Funding for Bulgaria: PM: US Debt Crisis Will Not Impact EU Funding for Bulgaria Bulgaria's Prime Minister, Boyko Borisov, says the decisions of the European Commission would not be shaken by the American crisis. File photo by BGNES

The downgrading of the US credit rating by the S&P rating agency will not affect EU funding for Bulgaria, according to Prime Minister, Boyko Borisov.

In an interview for the Bulgarian daily Standart (Standard) Borisov is adamant financing of operational programs of the European Union is not going to shrink over the US debt crisis.

Bulgaria currently counts on money from Brussels for large infrastructure projects, restructuring of the economy and social assistance programs.

Borisov says for Standart that the decisions of the European Commission would not be shaken by the American crisis because the countries in the Eurozone and all EU Member States are applying all possible efforts to keep the EUR stable.

"There is no reason to change the amount of the cohesion funding. What is more important for us is to absorb to the max the resources provided by the EU," the PM is quoted saying.

Economy experts in Bulgaria, however, argue about the impact of the US crisis on the country's financial market which has already suffered several blows. Some forecast a recession while others say Bulgaria's business and the stock exchange would not be affected negatively at all or not to the extent of those in the US and western Europe.

The rating agency Standard & Poor's (S&P) on Friday downgraded America's top-notch AAA rating to AA+.

S&P, one of the world's three major rating agencies, failed to be impressed by a last-minute deal in the US last week to raise the US debt limit by up to USD 2.4 TN from USD 14.3 TN, saying a potential US government default on its debt was avoided, but only achieved after months of bickering between Democrats and Republicans in Congress.

The credit rating downgrade is seen as a major embarrassment for President Obama's administration. It could also raise the cost of US government borrowing.

An economic adviser to the White House condemned the S&P move.

"It smacked of an institution starting with a conclusion and shaping any argument to fit," said Gene Sperling, the head of President Obama's National Economic Council, cited by BBC.

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Tags: Prime Minister, Boyko Borisov, European Commission, EC, EU, funds, funding, American, debt, crisis, credit rating, US, S&P, rating agency
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