ECONOMY

In Brief

Hidden deficit ruins Bulgaria’s euro plans SOFIA (Reuters) – Bulgaria was forced to delay plans to adopt the euro yesterday when it revealed a hidden budget deficit, hitting the credibility of the European Union’s poorest nation and reviving concerns about fiscal transparency in the region. Prime Minister Boyko Borisov, whose center-right GERB party came to power last July, said the previous Socialist-led government had signed dozens of unaccounted procurement deals, meaning the 2009 budget gap was 3.7 percent of gross domestic product rather than the 1.9 percent reported under European Union rules. The government said the discovery would not affect the Balkan country’s lev currency peg to the euro, but the news hit currencies across the region. Borisov said the deficit slippage had persuaded Bulgaria to abandon plans to apply this year to enter the pre-euro ERM-2 waiting room. He did not say when it might resume efforts to join the single currency. »We officially give up the plan to bid for ERM-2 because it will be offensive given this deficit,» Borisov told a news conference. «We have in fact lied to our [EU] colleagues about our readiness for the eurozone, being unaware of this trap.» Turkish treasury in talks with JBIC on Samurai issue ISTANBUL (Reuters) – The Turkish treasury is in talks with the Japan Bank for International Cooperation (JBIC) on re-entering the Samurai bond market, the treasury said in a statement to Reuters yesterday. It said it wanted to enter the market once it had agreed the basic issues with the JBIC, with the volume dependent on those talks and the timing dependent on market conditions. The issue of Samurai bonds, yen-denominated bonds issued in Japan by non-Japanese entities, would help diversify Turkey’s borrowing program which is focused largely on the sale of domestic debt and Eurobonds. Turkey borrowed $8 billion from the Samurai market between 1992 and 2000 in 19 auctions. Ankara would issue the Samurai bonds under a Japanese program which guarantees debt issued by emerging countries with ratings below investment grade. World Bank – Bosnia The World Bank has approved a $111 million loan for budget support in Bosnia after authorities adopted a set of laws on social benefits, the lender said in a statement yesterday. The bank requested legislation targeting cash transfers to individuals, such as veterans of the 1992-95 war and their families, saying the former system was too costly, unsustainable and unfair. (Reuters) Turk growth The Turkish economy is expected to grow 11 percent in the first quarter of 2010, State Minister Mehmet Zafer Caglayan told a meeting of the Ankara Chamber of Industry. Turkey posted growth of 6 percent in the fourth quarter of 2009. (Reuters) Turkey-Transatlantic Turkey’s state-owned Turkish Petroleum Corporation (TPAO) will sign a memorandum of understanding with TransAtlantic Petroleum Ltd for exploration and production of oil and natural gas in Turkey, Energy Ministry sources told Reuters yesterday. (Reuters)