site.btaBulgarian Parliament Ratifies New EUR 1,500 Mln Foreign Debt

Bulgarian Parliament Ratifies New EUR 1,500 Mln Foreign Debt


Sofia, December 12 (BTA) - The National Assembly Budget and
Finance Committee Friday ratified a Loan Agreement between the
Republic of Bulgaria and HSBC Bank, Societe Generale, CitiBank,
N.A. (London Branch) and UniCredit Bulbank AD, in their capacity
 as underwriters and authorized lead managers, and UniCredit
Bank AG (London Branch), in its capacity as agent. The loan is
of the amount of 1,500 million euro .

It will be repaid with the income from a planned issue of
government securities for the external markets in 2015, which is
 part of the medium-term programme for debt issue for the
international capital markets.

The bill of ratification of the lending agreement was passed on
first and second reading with the votres of GERB, the Reformist
Bloc, the Patriotic Front and ABV. BSP-Left Bulgaria and Ataka
voted against,  and the Movement for Rights and Freedoms and
Bulgarian Democratic Centre abstained.

The loan is extended for six months with an option for another
six-month extension. It will be used to finance the expected
larger State budget deficit, to provide financing to the
Bulgarian Deposit Insurance Fund, and to ensure liquidity
support for the banking sector.

Yanaki Stoilov MP (BSP) said that Bulgaria is on the brink of "a
 critical financial situation". To repay the debt in the coming
years, each and every Bulgarian citizen will have to pay 3,400
leva. The costs for interest payment will exceed the outlays for
 culture, research and sport for next year, he added.

Martin Dimitrov MP (Reformist Bloc) argued that every time
Bulgaria has a Socialist government, the result is excessive
deficit and economic crisis. "Deficits are always financed by
new debt. The legacy we had from BSP is now being financed with
new debt. This is how the financial system works," he said.

Roumen Gechev of BSP said that Bulgaria is being sent into a
debt spiral. "Not a single lev of this debt is going into the
Bulgarian economy."

Explaining why his Movement for Rights and Freedoms group would
abstain, Aliosman Imamov said that the problem is not the debt.
"The problem is that taking out loans is becoming a habit and it
 is the easiest way to solve the problems of a country."

Slavcho Atanassov of the Patriotic Front argued that while "it
is unpleasant", Bulgaria needs this loan "because of the problem
 with [the delicensed] Corpbank". He said that all political
forces which have been part of the government share the blame
for what happened with Corpbank.