Банкеръ Weekly



A round table on Pros and Cons of the Currency Board in Bulgaria was organized by the NGO Sum 12 Minus 5, in which intellectuals, economists, bankers and financial experts participate. Is the analogy drawn between the currency board arrangement in Bulgaria and the collapse of the currency board in Argentina pertinent, and the opportunities for sustainable economic growth, were the issues on which the most heated debates were held. Prof. Ivan Angelov from the Bulgarian Academy of Sciences repeated his stance (well-known to the broad public) for the expedience of introducing a smooth devaluation of the Bulgarian lev and changing the fixed exchange rate of the national currency by a floating exchange rate. According to the former economic advisor of ex-premier Zhan Videnov, a reasonable devalaution of the Bulgarian lev would promote export and create conditions for economic growth.Most participants in the discussions, however, united around the thesis that the question about the instuments to be used now for achieving real economic growth is much more important at present than the pertinence of dropping the currency board arrangement. Emil Kyulev, newly elected Chairman of the Supervisory Board of ROSEXIMBANK and also Chairman of the Vazrazhdane (Rennaisance) business club, commented that dropping the currency board arrangement prior Bulgaria's admission into the European Union would be unreasonable and rash. According to the banker, the passed years have shown that Bulgarian politicians cannot abide by financial discipline if it's not enforced by law. However, Mr. Kyulev pointed out that the Government should think about preferencial treatment of structure-defining sectors such as tourism and agriculture. According to him, there are financial resources for that, but they should not come from the forex reserves. As a potencial source Mr. Kyulev mentioned the proceeds from bank privatisation, amounting to some USD500MN, which in his words were deposited on accounts of the Bank Consolidation Company in foreign banks instead of using the money for promotion of the Bulgarian economy.The deputy from the National Movement Simeon II Dimitar Stefanov, who is a member of Sum 12 Minus 5, believes that the major question is not the pros or cons of the currency board, but how to avoid the Argentinian scenario in Bulgaria, in order to prevent an eventual crisis of trust, which would lead to large-scale withdrawal of short-term and long-term foreign investments from our country. Mr. Stefanov pointed to bad privatisation as a reason for the lack of sustainable economic growth in Bulgaria.

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