On Friday night Standard & Poor's credit rating agency lowered Bulgaria's credit rating from ВВВ- to ВВ+, i.e. under the critical level deemed acceptable for international financial markets. Now the Bulgarian government securities will be in the junk category. This implies that no one is advised to release loans to Bulgaria as the risk of indebtedness runs too high.

The news came on the day when the parliament in Sofia endorsed a fresh public debt worth 1.5 billion euro, and sparked agitated debates in political and economic circles.

The ratings agency explained its move with the banking crisis in Bulgaria this year that cost the country 3.5% of the annual GDP and resulted in a public deficit exceeding the EU-fixed margin of 3%. Whether Brussels will punish Sofia as required by the rules is still unclear. It is quite clear though that the lowering of the credit rating is a major blow to the country's international image that will cost it a lot of money.

Finance Minister Vladislav Goranov was not at all pleased with the news and tried to explain that the current government could not be blamed for the negative evaluation given that the new coalition cabinet took over in October and the results of its economic policies were expected in the near future. This is true but is not the whole truth, because the credit rating does not boil down to an assessment of current economic realities, but includes a forecast and recommendations to future investors as well.

Well, S&P has pointed out that the outlook is positive and that it is ready to revise its stance in a positive direction in case more foreign direct investments are attracted and the country's economy grows faster than predicted by experts. However, those in the know expect a 2015 growth under 1% and foreign investments worth about 1 billion euro. With this on our hands, we cannot hope to see Bulgaria's credit rating raised soon.

The lowering of the country's credit rating below the critical investment level, experts contend, reflects quite precisely the current shape of the Bulgarian economy and its near prospects. They recall that the assessment was made after the latest corrections to the country's budget for 2014 and after the adoption in principle of the new financial plan of the state for 2015, i.e. after it became obvious what the reality was and what the priorities of the government policy would be in 2015.

The financial situation is not at all rosy for the time being, and this is seen in the fact that for the past 12 months the country's debt has increased by more than 4.4 billion euro and is assuming astronomical proportions for a poor country like Bulgaria with its worth at 13 billion. The government itself has admitted that public finance would remain in the red by declaring plans to borrow further 4.2 billion in 2015. The last time Bulgarian securities were sold on international financial markets was last June and back then the country was spectacularly successful borrowing 1.5 billion euro at an interest rate of slightly above 3%. Next year we won't be near such favorable conditions under the critically low investment rating, meaning rising costs for public finance and for Bulgarian taxpayers.

English Daniela Konstantinova