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Wall Street Journal
Bulgaria is still far away from reaching a rescheduling agreement on its $12.5 billion foreign debt and isn't likely to ever pay off the entire amount, according to Emil Harsev, deputy governor of the Bulgarian National Bank.
"When you consider Bulgaria's situation of a stagnating economy and decreasing output, it's easy to see that this country will never repay these debts," Mr. Harsev said in an interview with the Wall Street Journal Europe. "That's why we need a rescheduling agreement soon to make the debt serviceable in relation to our economic potential," he continued.
In 1992, with a spurt of export-led growth increasing reserves, the Bulgarian government authorized a token repayment of $80 million, representing 20% of overdue interest. The move was seen largely as a goodwill gesture to get talks with the London Club of commercial banks, which holds 80% of the debt, moving again. One year earlier, Bulgaria reached agreement with the Paris Club, which holds only $1.6 billion of the debt, on a 10-year rescheduling plan that allowed a six-year grace period.