Borissov: Bulgaria will not incur losses from supporting bailout for Greece

Written by on July 17, 2015 in Bulgaria - Comments Off on Borissov: Bulgaria will not incur losses from supporting bailout for Greece

Bulgaria will participate in the rescue package for Greece and will not lose any of its own money from doing so, given expectations of guarantees from the European Commission, Bulgaria’s Prime Minister and its Finance Minister told Parliament in Sofia on July 17.

Borissov told the National Assembly that Bulgaria would lose nothing and would use no money from its own budget to rescue Greece.

He said that as a neighbour of Greece, Bulgaria would not interfere in the financial support for that country from Europe, because to interfere would worsen relations between the two countries.

Borissov indicated that Bulgaria had made its concerns known to the European Commission and had received and the EC had done “everything necessary” in the form of e-mail conversations and conversations to provide Bulgaria with an absolute guarantee that its participation in the bailout plan for Greece would not drain or harm the state budget in any way.

Finance Minister Vladislav Goranov told Parliament that Bulgaria would not be an obstacle to the 7.16 billion euro bridge loan to Greece provided it had definite legal guarantees that Bulgaria and other EU countries that are not euro zone members would not be negatively directly financially affected in the event of “unfortunate developments” in Greece, because additional compensation to the EU budget would be provided by the member states of the euro zone.

Borissov said that everyone was fearful that in spite of the seven billion euro being granted, and even though the Greek parliament had accepted all conditions, about whether the country would actually meet its commitments.

“There is great fear, but even greater is the fear that if anarchy and a worsening of the situation and the crisis are not controlled, that is a direct threat to Bulgaria – to business, the borders, migration pressure, finances, contraband,” Borissov said.

The Bulgarian Prime Minister dwelt on the failure of the populist policies of the current Greek government headed by Alexis Tsipras, underlining that the conditions that Tsipras had accepted were heavier than those at the time of the Greek prime minister’s predecessor, Antonis Samaras.

As a neighbour of Greece, for Bulgaria to be the only country in Europe to let down Greece would be “neither European nor Balkan,” Borissov said. “Let us show that we have always been a tolerant nation,” he said.

Provided that no Bulgarian pensioner would have to give money and the assurance regarding Bulgaria’s budget, Bulgaria could afford a tolerant attitude to the rescue package for Greece, Borissov said.

The bridge loan to be paid from the European Financial Stability Facility is intended to be used by Greece to pay maturing loans from the ECB and IMF. Greece must return the loan within three months, with the plan being that within that framework a new three-year bailout programme would have taken effect. That funding would come from the European Stability Mechanism, in which only the 19 countries of the euro zone participate.

Bulgaria was not alone in raising concerns about the bridge loan, with reservations also coming from the UK, Poland and the Czech Republic.

Speaking on July 15, EC Vice President Valdis Dombrovskis said that a mechanism was being worked out to protect countries outside the euro area from any possible negative financial consequences regarding repayment of the loan.

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