Банкеръ Weekly

Briefs

FOREIGN DEBT SERVES POLITICAL PASSIONS

The first Bulgarian issue of Eurobonds was put in pledge of political passions in Parliament. The opposition saw in it its chance to accuse the ruling party of violating the Constitution. On November 8 it attacked the two contracts, signed by the Government on November 1 with Chase Manhattan Bank and Morgan Stanley. The accusations were that the State was burdened by a new debt without asking the Parlaiment's permission.The debates continued for eight hours an took two plenary sessions within a day (last Thursday).While the drama in Parliament was gaining speed, thousands of kilometers away from Bulgaria, the Finance Minister Milen Velchev (in Milan) and his deputy Krassimir Katev (in Frankfurt) were presenting to foreign investors the issue of Eurobonds without knowing what that national Assembly would decide on teh matter.Deputy Premier Nikolai Vassilev was the only member of the high-ranking economic team who remained in Sofia to defend the new Eurobond issue in Parliament. In the sqabble between Mr. Vassilev and the former finance minister Muravey Radev, the incumbent Deputy Premier accused Mr. Radev that Bulgaria has lost EUR2BN due to the inadequate management of teh country's foreign debt. Mr. Radev, on his part retorted that Mr. vassilev could lay claims when he succeeds to pay off USD1BN of foreign liabilities, repurchasing them at 16.5 cents per USD1.Finally, the deputies found a partial solution and ratified teh two agreements with the fiscal agent Chase manhattan bank and with the investment bank Morgan Stanley, which will be responsible for finding buyers for the Bulgarian Eurobonds.

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