Bulgarian PM: US Debt Crisis Is Warning against Populism

Business » FINANCE | August 8, 2011, Monday // 08:11
Bulgarian PM: US Debt Crisis Is Warning against Populism: Bulgarian PM: US Debt Crisis Is Warning against Populism Bulgaria's Prime Minister, Boyko Borisov, says the downgrading of the US credit rating shows the negative consequences of financial experiments. Photo by BGNES

The downgrading of the US credit rating by S&P is a sign the current times are not times for populism, according to Bulgaria's Prime Minister, Boyko Borisov.

Borisov made the comment for the Bulgarian "Trud" (Labor) daily in a phone call, saying those who must learn from the US debt crisis include President Georgi Parvanov since he has criticized the cabinet of the ruling Citizens for European Development of Bulgaria, GERB, party for not increasing retirement pensions.

"This is a strong and totally clear sign this is not the time for financial experiments and populism," the PM said.

He stressed the actions of the cabinet regarding fiscal policies and structural reforms were precise, pointing out the Moody's credit rating agency has increased Bulgaria's credit rating from BAA3 to BAA2 with a stable forecast at the time ratings of Spain, Portugal and Italy went tumbling down.

"Despite the difficulties and the crisis, you see – here in Bulgaria we never stop – the construction equipment is everywhere – we open sports facilities, build highways, the Sofia metro, new railroads to connect Bulgaria with Turkey and Greece," Borisov said.

According to the PM, the best development lately was the European Commission giving Bulgaria a green light to use EU funds to hire experts from the World Bank and the European Investment Bank which will lead to a stark improvement of administrative capacity and much better absorption of EU funds.

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, populism, Georgi Parvanov, retirement pensions, Moody's
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