BULGARIA’S PARLIAMENT APPROVED THE GUARANTEE AGREEMENTS FOR TWO LOANS

On 9th of June, Bulgaria’s Parliament ratified the guarantee agreements on two loans extended to the Bulgarian Deposit Insurance Fund from the European Bank for Reconstruction and Development and the World Bank.

The agreements are at a total value of 600 million euro. The two loans are with state guarantees.

The money from the loans will be used to replenish the reserves of the Bulgarian Deposit Insurance Fund (BDIF), which were depleted after the payments of the guaranteed deposits to depositors in the insolvent Corporate Commercial Bank.

The opposition Bulgarian Socialist Party, the nationalist “Ataka” and centre-left ABC party did not back the guarantee agreements, the main suspicions boing that the loans might be used to fill the state budget instead of the BDIF.

According to the centre-right Reformist Bloc, this conversation would not have been held if the Corporate Commercial Bank had not been insolvent. Reformists Bloc’s leader, Radan Kanev, sees the decision for the loan as a failure of the BDIF activities in collecting the debts to CorpBank. Ataka party expressed doubts that the funds might be used for different purposes. The Bulgarian Socialist Party did not support the agreements with the motive that they had not seen financial statements on the loan repayments.