Very bad things happened in the last few months in Europe, which imposed changes in Bulgaria’s fiscal policy, says Deputy Prime Minister and Finance Minister, Simeon Djankov.

Speaking in an interview for the TV channel bTV Tuesday morning, Djankov responded to criticism that he had made promises for more funding to different sectors earlier and is now retracting them.

He explained it with planning for more revenues, which had not materialized.

According to the Minister, there is a real chance the Eurozone could fall apart in the next 6 months. He pointed intentions of former Greek Prime Minister, George Papandreou, to hold a referendum on austerity measures as a prime accelerator of difficulties across the European Union.

“This made the bailout for Greece questionable and toppled their cabinet; then the crisis spread to Italy and Belgium,” Djankov explained, adding Germany is Bulgaria’s biggest market, followed by Italy thus their confirmations they will suffer economic crisis in 2012 are calling for adequate reaction from Bulgaria.

“Luckily, we have not introduced the EUR, so we will not be affected that much. People’s bank savings are guaranteed, but there is a threat for our export – we must redirect it to Asia and Russia, which cannot happen in the course of several months,” the Minister pointed out.

He further stressed that in the beginning of the year there were plans for a conservative 2012 budget over assurance Greece‘s bailout will receive green light, but now, over a more unstable situation in the EU, the budget must have buffers.

According to Djankov, the draft budget is optimistic because it has been calculated on the basis of 1% economy growth, with expectations the latter will be larger.

He assured that the 2012 budget will be able to sustain the crisis and the deficit will end up being lower than 2.5% – second or third in the EU. He noted that if the Eurozone is replaced by a fiscal union as alternative, Bulgaria would be one of the 8 countries to be immediately admitted there.

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Salaries of top politicians in Bulgaria will be frozen at their levels from the end of 2009, according to Prime Minister, Boyko Borisov.

The move will be implemented despite the cabinet’s decision to up the minimum monthly wage in Bulgaria in May, 2012 – from BGN 270 to BGN 290.

“This is the situation globally; this is the situation in Bulgaria,” Borisov says, cited by “Monitor” daily.

According to the Parliamentary Code, the wage of Members of the Parliament equals three times the average monthly salary for the country.

The average salary in the third quarter of 2011 was BGN 753. If it stays at this level in the beginning of 2012, it means that MPs, whose fixed salaries range between BGN 2 196 and BGN 2 259, will lose BGN 63 each month.

Ministers, on their part, will lose BGN 82 a month. Their salaries are fixed at BGN 2 855.

Borisov has a monthly wage of EUR 1 500, which he says is way less than the one of his western counterparts.

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Bulgaria’s Corporate Commercial Bank continues to hold the biggest share of the money of strategic state-owned companies, a check has shown.

“There is no significant change in the data about the banks which serve state-controlled enterprises in comparison with last year,” a high-ranking governmental official told 24 Hours daily, speaking on condition of anonymity.

Bulgaria’s Corporate Commercial Bank holds nearly half of the money of strategic state-owned companies, it emerged in the middle of last year under pressure from the media.

The data was provided by Finance Minister Simeon Djankov at the request of the editors-in-chief of eleven of the biggest print media in Bulgaria, who approached the department, citing the law for access to information.

The data showed that nearly 65% of the monies of Bulgaria’s top 18 state-run companies are managed by three banks, whose market share does not exceed 9% – Corporate Commercial Bank (48%), EIBank, where the prime minister’s long-time live-in girlfriend Tsvetelina Borislavova held a 18% stake and the Central Cooperative Bank.

The eighteen companies listed included the Bulgarian energy holding and its units (gas monopoly Bulgargas, gas pipeline operator Bulgartransgas, state power utility NEK, nuclear power plant Kozloduy, thermal power plant Maritsa East II), as well as tobacco monopoly Bulgartabac, Bulgaria Posts, Sofia Airport, the Bulgarian Railways Company.

The top companies deposited in banks BGN 856 M by the end of the first quarter of the year 2010, which was down by BGN 343 M or 29% in comparison with August the previous year.

The slump was attributed to the government policy to encourage companies with state-owned stakes to pay dividends in a bid to boost the budget.

At the beginning of 2011 the European Commission launched an investigation against Bulgaria on allegations of allotting state aid to Corporate Commercial Bank, which is believed to finance the media group of mogul Irena Krasteva.

Acting on the suspicious revelations, Bulgaria’s finance ministry issued new criteria for attracting deposits from strategic state-owned companies, but the move apparently entailed no consequences.

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Bulgaria still wants to join the euro zone despite recent predictions that the single currency will collapse, Traicho Traikov, Bulgaria’s Economy Minister, told CNBC on Thursday.

“I know now it’s fashionable to predict the end of the monetary union, but I think common sense will still dominate and it is going to survive. Of course, in the end we want to be a part of it,” Traikov said.

“Ever since we introduced a currency board in 1997, our focus has been on keeping the fundamentals right, so we ran government surpluses for most of these years,” he explained.

“For us, being a part of the euro zone means lower interest rates on credits for business,” Traikov said.

CNBC points out that Bulgaria is the poorest EU member state but that its “tough reforms” have helped it achieve one of the smallest debt to gross domestic product ratios in the European Union and a budget deficit of around the Maastricht-agreed 3% of GDP ceiling.

The US TV further stresses the fact that Bulgaria has the lowest corporate tax in the EU at 10%, and that the government in Sofia remains firmly opposed to the introduction of a single tax rate in the euro zone even as Germany has proposed greater fiscal integration within the euro zone in order to avoid a situation where prudent countries end up paying for the profligate.

“For us, coordinated fiscal policy does not include coordinated tax policy,” Bulgaria’s Economy Minister told CNBC.

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I cannot see the eurozone risking a second recession, stated Luxembourg PM and Eurozone President Jean-Claude Juncker on an official visit to Bulgaria Wednesday.

“The truth is that growth in the eurozone has slowed down, but that is due to external factors and does not warrant a new recession,” said the Eurozone president.

He nevertheless added that strong and continual efforts must be made to overcome the economically unfavorable situation, especially in the field of public finance.

At the same time, Juncker commended the Bulgarian government headed by Borisov for its efforts in finance, saying that a lot of eurozone countries fare worse than Bulgaria.

“I am confident that Bulgaria’s next generation will feel the effects and reap the fruits of these efforts,” said the Luxembourgeois PM.

He also commended Borisov’s center-right GERB government for its successes in developing Bulgaria’s infrastructure.

Juncker spoke highly of Bulgaria’s level of satisfaction of criteria for joining Schengen and stated the country must accede to the free movement treaty “as soon as possible.”

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Bulgaria has dropped three places to 74th in a yearly economic competitiveness ranking of the World Economic Forum.

The 2011-2012 Global Competitiveness Report (GCR) covers 142 world economies, according to an announcement of the Center for Economic Development, a Bulgarian non-governmental think tank.

Bulgaria’s downgrading is due to low scores on goods market efficiency, technological readiness, business sophistication, infrastructure and innovation.

At the same time, the country has registered progress in the spheres of institutions, financial market development, labor market efficiency and quality of education and on-the-job training.

The latest edition of the report shows Switzerland to be the most competitive economy, followed by Singapore.

The US drops one place to fifth position, while the top ten predominantly comprises EU countries- Sweden (3rd), Germany (6th), the Netherlands (7th), Denmark (8th) and the United Kingdom (10th).

Japan ranks 9th, falling three places since last year.

The report confirms a continuous deterioration in the competitive power of the US economy over the past 3 years, with EU‘s position remaining constant and China registering rapid growth.

Another trend that can be observed is that the economic crisis has dragged some EU member states down the 2011-2012 global competitiveness list.

Bulgaria used to rank at the bottom of the group of EU countries, but it has now managed to outpace Romania, which has dropped 10 places to 77th.

According to the report, Romania’s competitiveness has deteriorated in all areas.

Greece, as expected, continues its downward trend to 90th position due to the debt crisis and the problems plaguing its labor market.

The top performer among Central and Eastern European EU Member States is Estonia, which retains 33th place, followed by the Czech Republic (38th), with Slovenia registering a serious decline from 45th to 57th place.

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Bulgaria’s economy performed slightly better in the second quarter than was originally estimated, according to seasonally adjusted data of the National Statistical Institute.

Latest NSI data released Tuesday indicated that Bulgaria’s GDP grew by 0.3% in the second quarter of 2011 compared with the first quarter – an improvement compared with the 0.1% growth for Q2 that was originally announced in August. The average Q2 growth of EU 27 compared with the first quarter was 0.2%.

The year-on-year growth figure for the Bulgarian economy in the second quarter has also been revised up to 2.0%, from 1.9% announce earlier according to the flash estimates.  The EU 27 y/y growth in the second quarter was 1.7%.

In spite of the slight positive revision, Bulgaria’s economy still registered a slowdown of its growth in the second quarter, after in Q1 2011 it grew by 0.7% compared with the last quarter of 2010, and by 3.3% year-on-year.

In the second quarter of 2011, Bulgaria’s GDP amounted to BGN 18.804 B, or EUR 9.614 B, which translates into a per capita GDP of EUR 1 284.

In April-June 2011, Bulgaria’s industrial and agricultural sectors increased their relative share in the added value of the economy, while the share of the services declined. The industry saw its share grow by 2.3% y/y reaching a share of 33.4%, and the agriculture’s increased by 1.1% reaching 5.8%. The share of the services declined by 3.4% down to 60.8%.

A total of 3.492 million people were employed in Bulgaria in the second quarter, a decrease by 3.5%. The gross added value per employed person increase by 6.1% in the second quarter year-on-year.

In the second quarter of 2011, individual consumption constituted 70.1% of Bulgaria‘s GDP. Investments accounted for another 21.1%. The country’s external balance (exports-imports) was negative BGN 414 M, or 2.2% of the GDP.

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For the last 2 months Bulgaria’s National Revenue Agency has caught up on BGN 80 M of uncollected revenues, according to director Krasimir Stefanov.

Up to now, the Agency has registered that it is some BGN 600 M behind in the collection of revenue, compared with values mandated by Bulgaria’s state budget.

Speaking for the Bulgarian National Radio Sunday, Stefanov promised that by the end of the year the Revenue Agency will catch up on an additional BGN 240 M.

Some BGN 300 M however will remain uncollected.

Stefanov further commented that operations carried out by the Agency to reveal hidden turnover and labor contracts of companies has shown very good results.

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Bulgarian National Bank Governor Ivan Iskrov has expressed confidence about the stability of Bulgaria’s banking system and the prospects for Bulgaria’s economy despite the sovereign debt crisis in Greece.

Speaking at a round table taking place on the sidelines of the “Bank of the Year” ceremony, he emphasized that Bulgaria’s capital adequacy stood at 15.36%, or three times over the EU minimum requirements.

According to Iskrov, Bulgaria’s banking system includes no bad banks, which means that journalists and experts should refrain from speculations involving Greek banks’ presence on the domestic bank market even in pre-election times.

The central bank governor pointed out that loan conditions in Bulgaria were improving but that a significant drop in interest rates was unlikely.

Iskrov highlighted the positive features of the Bulgarian economy, among which the 3.4% economic growth for the first quarter of 2011; the fact that export was developing very well, especially in the pharmaceutical sector, the production of electric machines and appliances, etc; a current account deficit downsized to 0.6% from 25.2% in 2008; a positive growth in foreign direct investments in Q1 2011, reversing a downward trend since the onset of the crisis.

Although non-preforming loans are still on the rise, he said, the Bulgarian banking system had enough provisions to weather it.

He assured that Bulgarian banks have built adequate buffers of capital to protect the system.

In his words, the growth in non-performing loans has slowed down to 8.5% from 21.7% in 2010.

At the same time, Iskrov remarked, bank deposits are going up, which indicated confidence in Bulgaria’s banking system.

The central bank governor reminded that stress tests are underway at 91 leading banks in the EU to see if they meet the prescribed 5% capital adequacy of primary capital.

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Societe Generale Expressbank is the winner in this year’s contest for Bulgaria’s “Bank of the Year“, the Bank of the Year Association has announced.

Bulgaria’s 14th annual Bank of the Year awards – first started in 1992 – were revealed at a news conference in Sofia on Wednesday in seven different categories, including the big “Bank of the Year” prize snatched by Societe Generale Expressbank.

UniCredit Bulbank, which landed the big prize last year, is now the winner in the “Client’s Bank” 2010 category, while Citibank N.A. – Sofia branch has triumphed with the award for Best Bank Branch in Bulgaria 2010.

The Corporate Commercial Bank is the winner of the “Development Dynamics Award” 2010. DSK Bank has been awarded the prize for “Efficiency”, and First Investment Bank has been granted the price for best “Market Share 2010″ performance.

The award in the brand-new category of the Bulgarian Bank of the Year Association – “Secret Client’s Prize 2010″ has been won by Raiffeisenbank.

The Bank of the Year Association’s founders feature a number of prominent Bulgarian professionals such as financier Andrey Pramov, Deloitte Bulgaria partner Silvia Peneva, Moore Stephens Bulgaria partner Stefan Nenov, the creator of the Bank of the Year prizes and long-time publisher of the economic daily “Pari” Valentin Panayotov, the top Bulgarian PR expert Maxim Behar, the economic secretary of the Bulgarian President Georgi Parvanov, Ertan Kara.

The winners in the individual Bank of the Year categories are determined through the examination of a complex set of criteria and hard data provided by the Bulgarian National Bank by a number of experts including financier Andrey Pramov, the President of the Confederation of Employers and Industrialists in Bulgaria Ognyan Donev, the Chair of the Bulgarian Audit Office Prof. Valeri Dimitrov, the President of the Bulgarian Business Leaders Forum Maria Shishkova, the Director of the International Banking Institute Maria Georgieva, the CEO of the Burov Foundation Vladimir Tashkov, the Chair of Association of Industrial Capital Vasil Velev as well as HP executive Sasha Bezuhanova, and the above-mentioned Valentin Panayotov, Maxim Behar, Ertan Kara, Silvia Peneva.

The award in the “Client’s Bank” 2010 category is the exception as it has been determined through an online vote. A total of more than 45 000 votes were cast in this year’s campaign, up from some 36 000 last year, with the winner UniCredit Bulbank receiving close to 12 000 votes.

Bulgaria’s 14th Bank of the Year awards are sponsored by Konica Minolta, the Doverie Pension Security Fund, Western Union, Kamor Auto, and DHL Express.

The official ceremony for the Bulgarian Bank of the Year 2010 awards is taking Wednesday night at the Sheraton Sofia Hotel Balkan, with the participation of Bulgarian President Georgi Parvanov.

The holder of the prize for 2009 was UniCredit Bulbank, and for 2008 - United Bulgarian Bank. Banks awarded in previous years were as follows: 1991 – Bank for Agricultural Credit; 1992 – Bank for Agricultural Credit; 1993 – Bulgarian Post Bank; 2000 – Bulbank; 2002 – Raiffeisenbank Bulgaria; 2003 – Raiffeisenbank Bulgaria; 2004 – DSK Bank; 2005 – United Bulgarian Bank and DSK Bank; 2006 – PostBank; 2007 – Raiffeisenbank Bulgaria.

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