Bloggers weigh in on 'currency peg' resignations

05/02/2010

Bulgarians grapple with the withdrawal of the prime minister's economic adviser and others.

By Balkanblogs for Southeast European Times -- 05/02/10

Prime Minister Boyko Borisov. [Getty images]

Three weeks after Rumiana Jeleva withdrew her nomination for the job of Bulgaria's EU commissioner -- eventually quitting all of her government posts amid heavy criticism -- resignations are affecting the government in Sofia.

Former parliament member Kolio Paramov resigned as economic adviser to Prime Minister Boyko Borisov after a short week on the job, which he took on January 21st. Paramov was criticised for threatening the stability of the Bulgaria's currency peg as well as being a security agent during the communist regime.

"I am stepping down in order to make it easier for the prime minister," he said.

He blamed the centre-right opposition Blue Coalition for obstructing free debate necessary during economic crisis, calling the situation of high unemployment and rising debt "really bad".

Similarly, Ilian Mihov announced last week that he is putting his nomination for deputy prime minister on hold. Mihov was set to co-ordinate Bulgaria's adoption of the euro and the absorption of EU funds.

His future with the government and his past statements about changing Bulgaria's currency peg prompted widespread debate throughout the Bulgarian blogosphere. Said Mihov: "Once we join [the eurozone] it will be clear that the current exchange rates will be preserved, so there could be no speculations of my potential interference with the currency peg."

By and large, Bulgarian bloggers would like to see both Paramov and Mihov step down.

Georgi Angelov and Svetla Kostadinova argue in the Economics Blog that both advisers left because of "suggestions and comments connected to the currency board. The currency board functions well for 12 years and should not be touched."

Angelov and Kostadinova reminded readers "when Bulgaria experienced big budget deficits, devaluations and high inflation, the economy stagnated while successive governments remained in power only for few months."

Blogger jingsmaboab believes there is a deeper political component to Paramov's resignation after a week on the job, that it is a way for the opposition Bulgarian Socialist Party (BSP) to discredit the prime minister. "Borisov would gain a lot of credibility if he would remove all former communist security agents from his cabinet," he said.

Not so, said CBfan -- who writes that "expelling Mihov is a complete primitivism, and I don't know why [everyone] consistently misrepresented that which he suggested". Placing Mihov "on the same level with Paramov's barking is laughable", he wrote.

Don Pereira also defended Mihov, adding that the official proved himself "a brilliant macro economist" and a professor at the prestigious INSEAD business school. "Taking the deputy minister position would forego greater income in other areas of his professional life," he says.

Parliament member Marтin Dimitrov remembered Paramov's proposal to devalue the Bulgarian leva to a 1:4 rate against the euro. "Such a rate would have unvalued the money and savings of all Bulgarians. Who sends us such advisers?"

While Kiro Kompasa "honestly hopes for Mihov's return", Добри Божилов believes that maintaining the currency board requires "far more serious measures which we do not see being undertaken". He recommends the government do something about the "expected huge budget deficit, which is a fact, rather than only explain why it is so".