ECONOMY

Vassilev stays put, backs colleague who resigned

SOFIA (Reuters) – Bulgaria’s Deputy Prime Minister Nikolai Vassilev, a key economic reformer, said yesterday he would not resign like Finance Minister Milen Velchev, but backed his colleague’s efforts to win more support for reforms. Earlier, Velchev told Reuters he had handed in his resignation because the ruling coalition was refusing to back unpopular economic reforms in the poor Balkan country. Later he indicated he might stay if his policies get renewed backing. Velchev’s deputy, Krassimir Katev, also said he would bring forward his planned end-year departure from office and leave immediately if Prime Minister Simeon Saxe-Coburg accepted the resignation of one of the Cabinet’s leading reformers. Analysts have viewed Velchev, Katev and Vassilev, who all worked as investment bankers in the West before joining the government in mid-2001, as the engineers of changes that have helped bring Bulgaria closer to EU membership by 2007. «I am staying. But I categorically support Minister Velchev’s demand for tight budget policies,» Vassilev told Reuters. Velchev said he was quitting because the ruling coalition was reluctant to support tight spending limits, back state sell-offs or agree to other painful reforms. Bulgaria’s ruling party faces losses in October local elections to the opposition Socialists and has been warned by the IMF against excessive spending ahead of the polls. If Velchev’s resignation is accepted, some analysts predict it could lead to an early collapse of the coalition between the ex-king’s National Movement for Simeon II and its junior partner, the ethnic Turkish MRF party.