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Transcript

U.S. and Bulgarian Relations

Milen Veltchev
Bulgarian Finance Minister
Tuesday, June 24, 2003; 12:00 PM

A new member of NATO and one of ten non-permanent members of the U.N. security council, Bulgaria supported the U.S.-led war in Iraq. The Bush administration is also considering new and expanded military bases in Bulgaria as the military's basing strategy shifts from large, permanent installations to smaller, more adaptable bases around the world.

Bulgarian Finance Minister Milen Veltchev will be online Tuesday, June 24, at 11:45 a.m. ET, to discuss U.S.-Bulgarian relations, NATO expansion and his country's efforts to join the European Union by 2007.

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Veltchev became minister of finance in 2001 after his election to the 39th National Assembly, the Bulgarian parliament. Before that, Veltchev served as vice president for emerging markets at Merrill Lynch & Co. He received his MBA from the Massachusetts Institute of Technology in 1995.

A transcript follows.

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Milen Veltchev: Hello: Sorry for the delay. It is a pleasure to be here with the Post and I look forward to answering your questions.

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Washington, D.C.: What are your sentiments regarding opening new U.S. military bases in Bulgaria?

Milen Veltchev: Bulgaria has been a great supporter of the "coalition of the willing" and, for the first time in our country's history, provided a foreign power (the U.S. in this case) with a military base on the country's territory, during the Iraq conflict. Bulgaria is a soon-to-be NATO member and is very supportive of the idea to relocate some of NATO's bases to Eastern Europe, including Bulgaria.

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Berlin, Germany: Hello Minister Veltchev: Currently Germany is facing its second recession in 2 years and unemployment is rising--especially in the East where it's almost 20 percent. How do these poor conditions on the Euopean continent affect your prospects for economic success in Bulgaria. Thank you.

Milen Veltchev: Of course, Bulgaria is bearing the brunt of European, and German in particular, recession, since Germany is one of our most important trading partners. However, this did not stop the economy from notching in 2002 another year of strong growth, which exceeded expectations by reaching 4.8%. Inflation is fairly low (1.2% in the last 12 months), while the budget is in surplus so far this year, and public debt to GDP ratio has declined from 75% to 50% in two years. Not surprisingly, Bulgaria's credit rating has been upgraded on eight separate occasions since 2001, and we are one notch away from an investment grade rating.

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Boston, Mass.: One of the requirements for entering the EU in 2007 is to restructure Bulgaria's foreign debt which is easier said than done. How will the goverment be able to reduce debt without cutting long-lasting social programs and loosing the support of the people who elected you?

Milen Veltchev: Clarification is due: there is no explicit requirement to restructure foreign debt in time for EU entry. You may be referring to one of the Maastricht criteria of keeping public debt to GDP ratio to under 60% to qualify for Eurozone membership. Progress by Bulgaria in this area has been significant over the last two years. Thanks to an almost balanced budget and to the $2.2 billion debt restructuring in 2002, in addition to strong economic growth, this ratio has been reduced from 75% to 50% since 2001. Moreover, keeping it to under 60% is now enshrined in the Public Debt Law. Moreover, the interest rate expenditure as a percentage of GDP fas been reduced to 2.3% ( from 4%) and is projected to stay around that level for the next several years, thus freeing up more funds to be allocated to social expenditure. The social sphere is one of governments's priorities and as a result of active labor programs and measures and solid growth, unemployment has fallen to 14.3% in May 2003 from more than 19% in 2001.

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Washington, D.C.: What, if any role, do you see Bulgaria playing in a future "New Europe" NATO?

Is Bulgaria a potential site for a new "forward" NATO base, where US troops will be based out of instead of Germany?

What is the sentiment in Bulgaria about the French, German, and Belgian reaction toward Bulgarian support of the US-led coalition in Iraq?

PS, Welcome to the alliance!

Milen Veltchev: Bulgaria definitely has a solid potential and geopolitical importance to play an active "forward" role in the the enlarged NATO and would share its responsibilities as a member in fighting terrorism and the new unconventional threats. Our country would welcome relocation of bases to its territory, which would hopefully increase security and increase the attraction of Bulgaria as a foreign invetsment destination.

As to the reaction of France and Germany, I would like to state, that joining the EU in 2007 is our biggest priority and we wouldnt like this to be in conflict with our drive to join NATO in 2004.

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New York, N.Y.: Will NATO expansion harm your relations with Russia?

Milen Veltchev: Definitely not ! We have entered a new and pragmatic stage in our bilateral relations with Russia !

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Milen Veltchev: Thank you very much for the opportunity to be here with the Washington Post today. As 2003 marks the 100th anniversary of relations between the US and Bulgaria, it is an honor for me to come back to the States and discuss the issues that are important to my country and yours. Thanks again!

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