Europe

Bulgaria Finance

Already in the years preceding the war, Bulgaria, a poor and recently formed country, had had to make extensive use of loans (internal and above all foreign), not only to cover extraordinary expenses, such as construction of roads, railways, ports, etc., but also to offset the excess of ordinary expenses over ordinary revenues, despite the fact that even the latter (especially indirect taxes) showed a rapid increase in harmony with the economic development of the country. The Balkan wars first and the world conflagration then greatly aggravated the situation, and at the end of the conflict Bulgaria, reduced to its territory, was in very unfavorable conditions to face the economic and financial crisis which had manifested itself in all states. Its public debt of 683 million leva in 1912 had risen to 3,900 million in 1919, and to this was added the burden of reparations, 2,250 million gold francs. The budget was permanently and heavily in deficit, the value of leverage in Swiss francs had fallen to in 19191 / 15 of its value in 1911, and domestic prices swung around a level between 20 and 30 times greater (in the years immediately following the devaluation of the purchasing power of leverage abroad then surpassed that on the domestic market).

According to findjobdescriptions, to improve public finances, the Bulgarian government resorted to a sharp increase in existing taxes and the creation of new taxes up to the maximum limit allowed by the capacity of the national taxpayer, already significantly reduced by the general disorganization, social turmoil and the devaluation of the currency. With all this, it was still a long way from reaching the balance of the budget, and the excess of extraordinary expenses, both imposed by the armistice conventions and the Treaty of Neuilly, and by urgent needs of the state, and by new internal obligations (for pensions for widows, orphans, invalids), forced to increase day by day the floating public debt figures and the circulation of bank notes. And also Article 132 of the Treaty of Neuilly.

Despite its critical situation, Bulgaria began immediately after the armistice to meet part of its obligations (from the armistice to January 31, 1922 about one billion conscription) and at the same time asked the Inter-Allied Commission for a 3-year moratorium on payment. repairs. The commission agreed to grant it, but without any relief from interest, on condition that the Bulgarian government undertakes to take certain measures aimed at guaranteeing the reorganization of the budget and the payment of reparations: among these the law on traffic is very important (voted on June 30, 1912) which had a salutary effect on the finances of the state, setting the maximum limit of the bank’s advances to the state and circulation on behalf of the trade. On the other points the agreement was not reached; the negotiations, interrupted by then, were resumed after six months and led to the definitive settlement of the reparations only in March 1923. In this new agreement the amount of Bulgaria’s credits on Germany, Austria-Hungary and Turkey were taken into account, and as a result the debt for the reparations was divided into two parts: 1) 550 million gold francs at 5%, payable in 60 annuities starting from 1923; 2) 1,700 million whose payment is extended without interest until 1953, the time when Bulgaria is believed to have been able to recover its credits. amount of Bulgaria’s claims on Germany, Austria-Hungary and Turkey, and as a result the debt for reparations was divided into two parts: 1) 550 million gold francs at 5%, payable in 60 annuities from 1923; 2) 1,700 million whose payment is extended without interest until 1953, the time when Bulgaria is believed to have been able to recover its credits. amount of Bulgaria’s claims on Germany, Austria-Hungary and Turkey, and as a result the debt for reparations was divided into two parts: 1) 550 million gold francs at 5%, payable in 60 annuities from 1923; 2) 1,700 million whose payment is extended without interest until 1953, the time when Bulgaria is believed to have been able to recover its credits.

Thus Bulgaria’s immediate obligations were reduced in proportion to its effective payment capacity, and at that date the financial improvement returned, so that in the financial year 1926-27 the balance of the budget was reached (in millions of leva).

Here is the analysis of revenue and expenses in the forecast for the last year (the April 1929-31 March 1930):

The public debt of Bulgaria as of October 31, 1928 was composed of 5354 million leverage of domestic debt (754 of consolidated debt and 4600 floating debt) and 1169.7 million gold francs of foreign debt (consolidated 479.3; floating 11.8 ; debt for repairs 66 ″ 4; following the occupation 14.2).

The amount of the circulation at the end of 1927 was 3327 million leva and the amount of the reserve 48 million leva gold, plus foreign exchange for 320 million leva paper.

Bulgaria Finance