INVESTMENT BANKS TO FINANCE INFRASTRUCTURAL PROJECTS
In the coming months, the Bulgarian government is going to discuss several schemes that will allow investment banks to finance the construction of infrastructural sites. Banks declared to be interested in public enterprises aimed at constructing roads without state guarantees, the Finance Minister Milen Velchev said at his arrival back on September 24 from the IMF and World Bank annual meeting in Dubai. There are many projects in Bulgaria, but the budget funds are limited, the Minister explained.During the informal meetings with representatives of investment banks and private financial institutions, the Iraqi debt to Bulgaria was the main topic of discussion, Minister Velchev said. He did not reveal details of the talks, because they had to remain confidential. Still, he said he was an optimist that a settlement could be achieved thanks to third parties.According to the Finance Minister, the differences between Bulgaria and the IMF on the size of the budget deficit will be overcome. Jeroen Kremers, Executive Director of the Netherlands Constituency Group of the IMF, is ready to support the Bulgarian position on the 2004 budget in front of the board of the Fund, Minister Velchev reminded. I think we were enough convincing in the presentation of our arguments to Anne Krueger (First Deputy Managing Director of the IMF) and Michael Depler (Director of the First European Department of the IMF) that there are no reasons for concerns, even though the deficit on the current account of the balance of payment is higher than expected. The higher deficit on the current account is a direct result, although not expected, from the steep growth in investments for starting from zero enterprises that exceed USD500MN for six months, explained Milen Velchev. He added that in a country with an active Currency Board a high deficit on the current account should automatically lead to shrinking budget expenses. The government is aware of this, the minister said. Negotiations on the 2004 budget parametres will go on in Washington in October.