Bulgaria Economy and Finance

Bulgaria Economy and Finance

Territorial variations. – The territorial mutilations suffered by Bulgaria as a result of its defeat in the Balkan wars (1913) and in the First World War (1919) had left large nuclei of Bulgarian population outside the borders of the state: 361,000 in Dobruja and Bessarabia (Romania), about 200,000 in Yugoslav Macedonia (Morava and Vardar basins) according to official sources, and a considerable number (on which official data are lacking) in southern Macedonia and western Thrace passed to Greece, as well as in eastern Thrace which remained in Turkey. This situation had great influence in deciding the alignment of Bulgaria with the Axis powers, which, at the time of the Romanian crisis, had led to the first revisionist act: the Craiova agreement (see History below.), by virtue of which Bulgaria recovered the southern Dobruja (or Romanian Quadrilateral; 7696 sq. km. with 350,000 residents), which it had had to cede to Romania with the Bucharest Treaty (10 July 1913). Less than a year later, the Italo-German offensive against Greece and Yugoslavia began, Bulgaria occupied (from 19 April to 19 May 1941) in addition to the districts of Caribrod, Bosiljgrad and Strumica on the Yugoslav border, removed with the peace of Neuilly (November 27, 1919) and re- attached to the okr ă g of Sofia (2390 sq. km.), the Pirot basin, the upper valley of the Morava (including Vranja), the Vardar basin north of the Greek border (except the upper section, which passed to Albania) with Veles and Prilep, and a strip of territory that stretched as far as Lake Ochrida (with the city of the same name); in total 28,000 sq. km. with about 1 million residents Subsequently, the administration of western Thrace was entrusted to Bulgaria, i.e. the coastal strip on the Aegean between the mouths of the Struma and Marizza (with the islands of Thasos and Samothrace), a territory (17,800 sq. Km. With about 800,000 residents)..) already assigned to Bulgaria by the Treaty of Bucharest, but transferred to Greece with the Peace of Neuilly. At the end of 1941 Bulgaria thus extended over 156,700 square kilometers, and counted 8.5 million residents.

After the end of hostilities and pending the definition of the Peace Treaty, Bulgaria returned all the conquests made after 1940, except Southern Dobruja, which now forms a new okr ă g.

These events have caused serious disturbances in the consistency of the Balkan ethnic minorities. Following the Craiova agreements, 62,056 Bulgarians entered southern Dobruja, previously established in northern Dobruja (still Romanian) and an (unspecified) part of the Romanian population left it. After the occupation of Hellenic Thrace at least 100,000 Bulgarians returned there, while a strong nucleus of Greeks (already coming from Anatolia) emigrated from it. Movements in the opposite direction occurred as a consequence of the Allied victory, but there are no reliable statistical data.

Population. – In December 1947 a new population census took place in Bulgaria, which revealed, throughout the state, 7.02 million residents (density 63.4 residents per sq. Km).

Economic conditions. – While the temporary annexation of Macedonia and Thrace did not decisively alter the foundations of the Bulgarian economy, which remained – as it remains – centered essentially on agriculture and above all on the surplus of some products (tobacco, in the first place; cereals, grapes, wine, etc.) which allows the purchase of the crude and processed products necessary for its slow but progressive industrialization, the new international situation, created by the defeat of Germany, places on Bulgaria the need for a different orientation in the exchange policy. In 1939 Germany alone absorbed 65.5% of Bulgarian imports and 67.8% of Bulgarian exports, and Italy was in second place. After 1944, Bulgaria moved towards the Central-Eastern European bloc (Czechoslovakia, Poland, USSR); there is no reliable data to evaluate the changes in foreign exchange due to this political attitude.

Communications. – On 9 October the new Šumen-Karnobat railway section was inaugurated, which links the two main lines carrying traffic to the Black Sea (Varna and Burgas) and is the third Bulgarian transbalcanic one; on 9 December 1941 the Sofia-Kulata (Petrič) railway was connected with the Thessaloniki-Constantinople (Kulata-Demir Hisar section). The Sumen-Razgrad-Silistra is under advanced construction; the works for the junction of the Sofia-Kjustendil line with Skoplje, and of the Haskovo-Kărdžali with Komotinē are not continued.

Finance. – The government of the Patriotic Front has proceeded to almost total nationalization of the country’s economic life. The two-year plan 1947-48 for the development of the Bulgarian economy, fixed investments in the national economy, in 1946 amounting to 80.7 billion lever, about 266 billion.

The ordinary state budget is in equilibrium. For Bulgaria 2012, please check oxfordastronomy.com.

In 1946, the overall revenue amounted to 68.6 billion of leverage, the initial cost of 81.4 billion. In 1947 extraordinary expenses amounted to about 14 billion lever.

The public debt as of December 31, 1946 amounted to 251, 1 billion of leverage, of which 44.4 billion of external debt and 206.7 billion of internal debt. At the same date the internal loans guaranteed by the state amounted to 23.1 billion lever.

By order of the National Bank of Bulgaria of March 7, 1947, the exchange of notes and treasury bills at 3 per cent circulating as currency was ordered. The exchange of the old currency with the new one was carried out at par: in order to reduce the volume of circulation, the sums paid in excess of 2,000 leva they were registered in blocked deposits. With March 12, all bank deposits and financial rights from life insurance were blocked. Credits in general were also blocked and the relative payments could be made, starting from March 17, with a transfer to a blocked account in the name of the creditor. Restrictive rules were issued for the use of blocked accounts; furthermore, norms were issued, which limited the amount of new money that can be held by entities or persons. Simultaneously with the exchange, an extraordinary tax on assets and one on deposits created at the time of the exchange were applied. In June 1947, the deposits made at the time of the change and still outstanding were converted into securities of a government loan of 30 billion lever. The official exchange rate with the US dollar is 81.35 leva per 1 dollar; a premium of 250% must be added.

The Banking Law of December 26, 1947 attributed the banking monopoly to the state, which exercises it through the National Bank of Bulgaria (which also has a monopoly on issuing tickets and bills) and, in the long-term credit sector term, through the Investment Bank of Bulgaria. In addition to these two credit institutions, only cooperative people’s banks and agricultural cooperatives are allowed. A banking council has been set up at the National Bank of Bulgaria, which gives its opinion on all matters of banking policy and on those relating to the financing of the plan.

Monetary circulation amounted in February 1947 to Leva 44.5 milliard against 5.6 milliard in 1939; bank deposits in September 1947 were 100.3 billion (1939 = 12.1 billion).

Bulgaria Monetary circulation