EC: Bulgaria will remain financially stable in 2013

The European Commission sees Bulgaria as financially sound and expects no fiscal strain for the Government in the short term, according to a recently published report on financial stability of the 27 EU member-states, BNR reported. The document notes that Bulgaria's public debt is well below the limit of 60% of gross domestic product (GDP). It is expected to reach 18.3% in 2014 and exceed 20% by 2020.

The ageing population problem and the ensuing increase in pension and health-care liabilities of the state are identified as potential risks. However, the EC believes that Bulgaria still has enough time to adjust its policies to avoid future trouble. Competitiveness, foreign investments, the current account balance and labour costs are the challenges Bulgaria faces.

Meanwhile, the economist Robert F. Engle, a Nobel prize winner, cautioned that the global financial system needs to raise an additional $3 trln, if it is to prevent another financial shock. Taxpayers in some countries will be called upon to save banks in a future crisis because raising additional capital at that point would be too difficult and expensive, Тhe Аustralian reports. "It is much better to raise capital standards in time of economic prosperity," Engle said. Banks in the US, Japan and France are in direst need of additional capital.

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