ECONOMY

Bulgarian banking

He added that a tax on banks’ provisions to cover bad debt would also be lifted. SOFIA (AFP) – Bulgaria’s Parliament yesterday lifted the threat of up to 10 years’ imprisonment for bankers who grant non-guaranteed and uncollectable loans, officials said. Severe penalties on generous bankers, including a ban on practicing the profession or holding public office in addition to a possible jail sentence, were imposed after 14 banks went bankrupt after issuing around 1.5 billion dollars in unrecoverable loans between 1991 and 1995. The banking crisis led to hyperinflation in Bulgaria, and a number of severe measures were taken in 1996-1998 to get the country’s economy back on its feet. Recently, Bulgarian banks have been very cautious in granting loans, asking for a number of guarantees that some small businesses have complained blocks their access to credit. The Bulgarian government, led by Prime Minister Simeon Saxe-Coburg, who became the first ex-monarch in eastern Europe to win power via the ballot box in June, plans to promote loans to help revitalize the economy. It is just the first step on the way to freeing up enterprise for Bulgarian businesses, said Valery Dimitrov, a lawmaker of Saxe-Coburg’s National Movement for Simeon II party. The country is in the depths of its worst recession since 1945, which is expected to cut gross national product by 8.5 percent this year. Industrial production fell 9.2 percent year-on-year in September.