Economists: Financial instability is possible after the resignation of Simeon Djankov

“The retired Deputy PM and Finance Minister Simeon Djankov has always wanted to keep the fiscal reserves at a low level, while colleagues of mine and I claimed that it is better to have a large fiscal reserve in order to be able to cover payments that may arise,” economist Georgi Angelov said on BNR. He stressed that, regretfully, the fiscal reserve is low and since a decision has been made to pay the subsidies to farmers, financing should be found immediately. Therefore, the Government has no other choice but to find the money by issuing short maturity securities. According to him, the better option is to do this gradually.

Georgi Angelov commented that the replacement of the Finance Minister might influence the interest rate of the bond issue and the biggest problem would be if there are no participants in the tender of securities and the money needed cannot be collected.” In such a case, other ways should be sought and other tenders should be organised in the coming weeks but other payments are due at the beginning of next month. Therefore, the interest rate is very important, concluded the economist. The new Finance Minister Tomislav Donchev will have an easier task because he is acquainted with European diplomacy and will not to go into such criticism against the financial policy of the Eurozone as Djankov did,” Angelov said.

“The replacement of the Finance Minister causes arouses “uncertainty and instability”, commented Atanas Garov, Deputy Chairman of the Confederation of Employers and Industrialists in Bulgaria (CEIBG). He pointed out that, in the present situation, businesses in Bulgaria are mainly interested whether the policy of financial stability and predictability will be followed. “We have worked with Tomislav Donchev but we have no observations on his new responsibilities. We do not know whether there will be a turn in policies,” added Garov. According to him, from a business perspective, such a major change before the elections creates instability.

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