Bulgaria is not holding negotiations for the conclusion of a precautionary arrangement with the International Monetary Fund (IMF), but the National Movement for Surge and Stability (NMSS) insists on negotiating for the provision of a flexible credit line for the country, which the IMF is offering as a new financial instrument, Vladimir Karolev, leader of the NMSS economic team, told journalists in Veliko Turnovo. He presented to the local business community the anticrisis measures in the campaign programme of the party.

He recalled that possibilities for negotiation with the IMF were proposed in the package of anticrisis measures of the NMSS as early as in the autumn of last year, but the proposal was not supported by GERB, the Union of Democratic Forces and the Democrats for Strong Bulgaria.

It is true that the IMF concludes precautionary arrangements with countries which are in a crisis. But a new financial instrument is now offered - a flexible credit line, which has nothing to do with the restrictions and limitations of a precautionary arrangement, Karolev said.

According to him, the example of Mexico, and recently Hungary, which are already using this instrument, shows that investors are calmed and begin to assess the credit risk more highly, and on the other hand, interest rates go down.

In Bulgaria over the last seven to eight months, interest rates have grown continuously, because the country is increasingly considered a high-risk one and investors fear that after the elections, populists may come to power and may begin to run the economy in such a way that the currency board arrangement will not stand and a situation will emerge similar to the situations in Romania, Hungary and other Eastern European countries, Karolev commented.

For this reason, the NMSS insists that negotiations on the new financial instrument should begin with the IMF, not because the financial stability of the country is now jeopardized, but if a need arises for fresh money, there should be a ready credit line for Bulgaria outside the limitations of the precautionary arrangement.

Source: BTA