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With EU\u2019s support, the Bulgarian National Bank overcame a run on deposits caused by an \u201corganized criminal attack\u201d against several banks, it said in a statement.<\/p>\nOur correspondent Andreas Frank writes:\u00a0 If anybody still had doubts that the European Union gets undermined by organized crime – here is more evidence.<\/p>\n
On 29 June 2014, Bulgaria asked the Commission to authorise the provision of a credit line of 3.3 bn BGN ($2.3bn) to be provided by Bulgaria to the banking system in order to respond to speculative attacks that occurred over the past week.<\/p>\n
With EU\u2019s support, the Bulgarian National Bank overcame a run on deposits caused by an \u201corganized criminal attack\u201d against several banks, it said in a statement.<\/p>\n
Earlier, queues formed outside some Sofia branches of First Investment Bank AD, which paid 800 million lev to clients on June 27. Bulgaria asked the European Commission to support the credit line a week after the central bank put fourth-largest Corporate Commercial Bank AD under administration after a big depositor withdrew funds.<\/p>\n
\u201cLast week, it transpired that certain individuals have been targeting the third-largest bank, urging customers to withdraw their deposits,\u201d the European Commission said in an e-mailed statement. \u201cThis created concerns about the liquidity of the bank in question and risked spilling over to some other institutions, despite the fact that the Bulgarian banking system is well capitalized and has high levels of liquidity.\u201d<\/p>\n
Bulgaria\u2019s ruling Socialists are under pressure to resign following a poor showing in European Parliament elections on May 25. The government, which took office a year ago, is fighting to keep the banking system stable as opposition politicians say the current leadership has brought the country to the brink of ruin. President Rosen Plevneliev called early elections yesterday for Oct. 5 and will dissolve Parliament Aug. 6.<\/p>\n
The country of 7.5 million, which is the European Union\u2019s poorest state by economic output per capita, joined the 28-nation bloc in 2007 along with neighboring Romania. The EU has repeatedly criticized both countries for failing to curb corruption among senior government officials and sever their links with organized crime.<\/p>\n
The banking crisis has stoked tensions on the political scene. Speaking on National Television on June 28, Finance Minister Petar Chobanov accused former prime minister and opposition Gerb party leader Boiko Borissov of causing \u201cpanic\u201d by making \u201cuncontrollable and incompetent statements on such sensitive subjects as the financial security.\u201d<\/p>\n
Chobanov was responding to a statement made by Borissov, who was toppled from power by street protests 14 months ago, in a June 28 television interview that Bulgaria\u2019s \u201cfinances and bank system are in a catastrophic state as a result of this government\u2019s rule.\u201d<\/p>\n
While the credit line \u201cshould stabilize the situation in the short run,\u201d questions remain over political stability, Peter Attard Montalto, an emerging-market economist at Nomura Holdings Plc, said by e-mail today.<\/p>\n
The central bank said it will use cash from the Bulgarian Development Bank and the Deposit Guarantee Fund, both state-owned, to recapitalize Corporate Bank. Corporate Bank and FIB account for 18.5 percent of assets held by lenders, according to the central bank. Our correspondent Andreas Frank writes:\u00a0 If anybody still had doubts that the European Union gets undermined by organized crime – here is more evidence. On 29 June 2014, Bulgaria asked the Commission to authorise the provision of a credit line … Continue reading
\nEU PressRelease<\/a>
\nBNB PressRelease<\/a>
\n![\"Organized](\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2014\/07\/Organized-Crime-300x137.jpg\")
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