ECONOMY

In Brief

Stringent moves by the Bulgarian government SOFIA (AFP) – Bulgaria’s government proposed to cut welfare payments and freeze pay for public workers, under budget plans unveiled yesterday, in stringent moves to balance its books as it struggles with recession. Bulgaria enjoyed years of robust economic growth before plunging into recession in the first quarter of this year. Officials and analysts have forecast a 6.3 percent contraction of gross domestic product in 2009. Unemployment was projected to reach 11.4 percent of the work force in 2010, compared to 9.5 percent this year. «The government is determined to carry out a policy to maintain the stability of the lev [currency], the financial system and the economy as a whole… in order to emerge from the crisis as soon as possible,» Finance Minister Simeon Djankov said after handing the draft 2010 budget to parliament. The plan would cut social security installments by two percentage points next year and offer a small increase in pensions to people aged over 75. It also proposed a freeze on public sector salaries next year. Albanian growth seen at over 2 percent The Albanian government expects a growth rate of more than 2 percent for 2009, Ridvan Bode, the country’s finance minister, announced yesterday in a joint press conference with the central bank governor and the representative of the International Monetary Fund in Tirana. «Our activity to support economic development will bear fruit,» Bode said, adding that although the global crisis has dealt a blow to the country’s economy it has not had a huge negative impact. Also yesterday the central bank of Albania announced the reduction of its key interest rate from 5.57 percent to 5.25 percent, its first rate cut since last January. EQT-Bulgaria Private equity firm EQT acquired two of Bulgaria’s major cable TV and Internet companies for over 200 million euros and said yesterday it would merge them into the country’s biggest cable operator. Sweden-based EQT’s EQT V fund acquired 100 percent of Eurocom from US private equity firm Warburg Pincus and 70 percent of privately owned CableTel, EQT said in a statement. The new company will provide cable television, broadband Internet and fixed-line phone services, as well as interactive digital television, Istvan Polony, who will be chief executive of Eurocom and CableTel, told a news conference. (Reuters) Serbian loan Serbia’s economy is likely to grow by 1.5 to 3 percent in 2010, but the government has agreed to extend an International Monetary Fund (IMF) loan deal until the end of 2011, Finance Minister Diana Dragutinovic said yesterday. Central bank Governor Radovan Jelasic added that monetary policy easing was possible in 2010 if Serbia held to a budget deficit of 4 percent of gross domestic product. The IMF offered Serbia a 3-billion-euro loan in May to help bolster its economy against the global crisis. Serbia has drawn 800 million euros so far. The next two tranches, totaling 1.4 billion euros, hinge on the 2010 budget meeting IMF standards. Dragutinovic said the IMF agreed to the 4 percent gap in 2010 following a consensus in Europe that governments would not be able to withdraw entirely from stimulus programs in 2010. (Reuters)