Financial labilnost. IMF in sight

Recently, the public is going to need a broad discussion of the conclusion of the precautionary agreement with the International Monetary Fund (IMF) to ensure the financial stability of the country.

For the signing of such an emergency and possibly grant a flexible credit line if necessary, calls the opposition. Managing understandable set remain skeptical. Find no consensus among economists.
Idnoto government should carefully consider what are the benefits and possible risks of the support fund. The need for this becomes more significant. The budget at the end of May suggests that external assistance is unlikely to be avoided.
For and against
Emblem and NMSII believe that the Bulgarian government should be paid to the IMF with a proposal for concluding the agreement and security agreement on credit if necessary. Agreement with the IMF will increase investor confidence in the economy and will ensure discipline and transparency in government, to justify the representatives of the political forces.
Skeptical towards such control remain. From there continue to point out the negative and throw around the need for a clause to the fund. Understandable – expressions of need for external support means the Government acknowledge that it has failed.
Do not see the need for agreement with the IMF. This agreement is for countries unable to pay bills, Rumen Ovcharov is categorical. We need namordnitsi demonstrated that we can properly manage its economy, says the chief of the City Council of the BSP in Sofia.
We can not conclude an agreement with the IMF without tight coordination with the European Commission and with the Directorate Commissioner Joaquin Almunia, usukva Plamen Oresharski. This is not necessary for an internationally recognized fact that Bulgaria is among the few countries that have a chance to meet fiscal targets, the Finance Minister explained.
Agreement with the IMF for countries that can not handle alone. Bulgaria may face if there is a reasonable policy that guarantees the stability indicates Prime Minister Sergey Stanishev, adding that the conclusion of an agreement with IMF will be reflected in the reduction of fund salary and dramatically reducing administration.
Arguments against export agreement with the fund and some economists. For example, according to Georgi Angelov, senior economist at the Open Society Institute, the conclusion of the protective agreement will be a bad signal for investors. If the IMF is invited, this would be a bad indicator for the country. No European country not to invite the board, if not go to Angelov stressed June 30 during a discussion in the capital on the 12 th anniversary of the introduction of the board.
Is there a chance for Bulgaria to meet its fiscal targets, and how reasonable is the government policy, as argued this ruling? You have to announce bankruptcy, to find external support?
Red
Decline in the collection of basic prihodoiztochnitsi budget and lack of control on government expenditure spend. Briefly, this is the state of fiska now.
Data published yesterday by the Ministry of Finance (MoF) for the budget at the end of May confirmed this picture.
Although at the end of the month budget balance is positive – 105.8 million euro, only the May budget is red with a 281.9 million euro (for the period January-April balance was 387.7 million euro). Even more tragic is the situation in comparison with the first five months of 2008 when the budget is made 2.37 billion surplus of EUR
The total amount of revenues in the state budget by the end of May was 7.31 billion euro, representing 34.9 percent of the projected estimates for 2009 compared to May 2008 observed decrease of 8.8% or in absolute amount collected 707.5 million EUR less.
Compared with May 2008 revenues from indirect taxes (they form the bulk of tax revenue in the state budget – 66%) decreased by EUR 683.7 million (14.5%), which is mainly due to contraction in revenues from VAT . Compared with revenues for the same period last year during the reporting period were 644.9 million euro with less, which is mainly due to lower revenues from VAT on imports.
Compared to May 2008 is reported delay of 8.3% of revenues in the group of direct taxes or the absolute amount were 179.1 million euro less.
At the end of May 2009 revenues in the group of corporate taxes into account a reduction of 20.5 percent compared to May 2008 due to shrinking profits for companies as a result of the crisis.
Similarly, the implementation of the consolidated budget. Except the last Republican, includes all autonomous budget – municipal, insurance funds, two, BAS, BNR, BNT, the Supreme Judicial Council, and the extra accounts and funds and other accounts at the central and local level.
Just realized the May deficit in the consolidated budget reached 120.1 million euro towards the end of May 2009 the total surplus is the amount of 555.4 million leva, while the end of April 2009 the surplus reached 675.5 million euro
The likelihood of this year out of state to a red rose. According to the expectations of economists, if the government changes the cost of policy risk in the budget deficit in 2009 to exceed 2 billion euros.
Public finances will be in red in this and next year expects to June 23 the European Commission.
In Brussels last report indicated that if the government does not change the course of makropolitikata Bulgaria will account deficit of 0.5 percent of GDP in 2009 and 0.3 percent for 2010
However, the numbers really are not the only cause for concern. There is insufficient control in terms of implementation costs. In addition, the government often saves you disclose publicly any contracts signed and commitments that takes them to pay.
The above facts lead us to the conclusion that the first task, which will have to take a new cabinet is the reduction of costs and the introduction of strict controls on government outlay. Budgetary discipline and transparency underpin the protection program with the IMF, which calls on the opposition.
So imperceptibly closed circle of this analysis and reached the logical answer to the question why such a prick on management of financial support from the IMF.
The truth is that maintaining a prudent macroeconomic policy, which we promised in their election platforms parties would save us the need for external financial support. The problem is that management by shark up to power very quickly lose their prudence. By this logic, a certain agreement with the IMF can not be avoided.
Recently predicted that the chief economist of Rayfanzen Tsentrobank Peter Brezinchek to Blumbarg agency. It was clear that our country will meet the majority of short-term financial needs with assistance from the IMF. The same opinion and the World Bank, which argues that Bulgaria, like Latvia and Belarus does not have sufficient reserves to cover its debt this year and will probably resort to „official sources“ for additional capital.

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Malina Dacheva, Expert.bg