Bulgaria is to stay less affected by the global financial crisis than other countries due to the currency board and the flat tax system it adopted, Steve Hanke, a Professor of Applied Economics at the Johns Hopkins University said during the 10th Southeast Europe Economic Forum.

However, Prof. Hanke, who is said to be the father of the Bulgarian currency board system, pointed out that the Bulgarian Achilles' heel is corruption.

Hanke also said that the current crisis in the US should not be compared to the Great Depression and added that Bush's war on terrorism has restricted individual freedom, which further spurred economic crisis.

Now we have a new president and his answer will be massive redistribution of income and greater intervention of the government at all levels of the economic system, Hanke concluded.

The Bulgarian Parliament on Thursday did not adopt the ten times reduction of the minimum capital requested to establish a limited responsibility company in the country.

The project for changes in the Trade Law provided for the minimum capital to go down from BGN 5,000 to BGN 500, which the Members of the Parliament (MP's) rejected at second read. They did, however, approve the article providing changes in the way the amount is deposited - the first installment would now equal 30% of the capital, instead of the current 70%.

The idea to reduce the minimum capital was introduced by the opposition MP Marin Dimitrov, who believes that the move would encourage entrepreneurship in Bulgaria. It became clear even before the vote, during the discussions, that the MP's would not approve the change.

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Bulgaria's National Assembly voted at first reading Friday on extending bank deposit insurance to the local-currency equivalent of EUR 50,000 from BGN 40,000 at present.
The MPs approved bills of Rumen Ovcharov, Milen Velchev and Yordan Tsonev of the ruling coalition and of independent Maria Kapon.
Kapon proposed a guarantee of the local-currency equivalent of EUR 50,000 mirroring the measure put forward at the latest meeting of the EU's finance ministers to protect deposits of up to EUR 50,000.
The members of the ruling coalition called for a BGN 100,000 insurance.
Under the adopted legislative changes, the government will also guarantee debt instruments issued by the local commercial banks.
The deposit insurance fund will borrow from the state budget if short of cash and guarantee interbank loans for a year, under the proposal.
The Bulgarian government is ready to guarantee interbank loans and buy back government securities to help banks overcome the credit crunch and the smaller liquidity, Prime Minister Sergei Stanishev told Reuters news agency.
Stanishev pledged the government would bail out any bank suffering liquidity problems, and said the fiscal reserve would surge to BGN 13 billion at the year's end.
(Dnevnik)

Sofia airport has been granted a 3A category, meaning that airplanes could land with a visibility a slow as 200 meters.

The news was announced by Bulgaria's Transport Minister Petar Mutafchiev Sunday. Mutafchiev participated in the presentation of the military "Albatross F2" plane in the village of Chernogorovo.The plane is a replica of the plane used by the Bulgarian Army during the Balkan War. On October 16, 1912, "Albatross F2" realized one of the first flights in the world when an aircraft was used for military action. The replica has been made by the non-profit organization "Avio relics."

After its renovation the airport in Sofia had a category 1 permitting lending of airplanes with visibility of 550 meters or more. The Transport Ministry then had established a goal of upgrading the airport's category and providing better landing conditions, according to Mutafchiev.

The Minister reminded that the location of the airport posed many obstacles for the category upgrade because the foggy conditions at Sofia's airport are much more frequent than at other airports in the country. Despite that, the Sofia airport became the first airport in Bulgaria to have a category 3A, which means that the number of canceled or delayed flights would be significantly reduced.

The next step, according to Mutafchiev, is the acquisition of a category 3B, which so far has been granted to only 10 airports in Europe. In order to obtain a category 3B, the road to Sofia airport must be changed as well.

The Bulgarian bank system has the best capitalization in the entire European Union (EU), according Ivan Iskrov, Manager of the Bulgarian National Bank (BNB).

Iskrov made the statement on Thursday before members of the Greek Business Council during a discussion about the effects of the global financial crisis in Bulgaria.

According to data from BNB until September of 2008, the credit institutions, operating in the country, have registered profits of BGN 1,1 B, which is 30% more compared to the same period of 2007. It is projected that the profits would reach a total of BGN 1,5 B by the end of the year.

Iskrov further stated that there was no need to recapitalize banks in Bulgaria similarly to the recapitalization taking place in Western Europe, because they were over capitalized. The problems created by the global financial crisis are not affecting the bank system in the country, but the real business, Iskrov explained.

The BNB manager also pointed out that in the conditions of a long-lasting crisis, Bulgaria can expect deflation, increase of unemployment, low rate of salaries' increase, adding that Bulgaria was going to overcome these issues because the country possessed the best instrument - its membership in the International Monetary Fund.