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23.09.2009
Bulgaria to cut administration to fight crisis
SOFIA, Sept 23 (Reuters) - Bulgaria\\\'s new centre-right government plans to cut its bloated administration by 15 percent next year as part of efforts to reduce spending and overcome a deep recession, it said on Wednesday.

The government of the GERB party, which won elections in July, approved over 80 anti-crisis measures to be implemented by May next year to maintain financial stability in the European Union\\\'s poorest member state.

\\\'The aim is to achieve fast, real and sustainable results ... for the recovery of the economy,\\\' Deputy Finance Minister Anna Mihaylova told reporters. \\\'We can achieve, although it will be hard, a 15 percent optimisation of the administration.\\\'

The cuts aims to improve the efficiency and productivity of the Balkan country\\\'s often sluggish and graft-prone public servants, whose total number is estimated at about 230,000.

The new government came to power on pledges to avoid a protracted recession and uproot widespread corruption and crime that had forced the EU to freeze millions of euros in aid to Bulgaria and scared away foreign investors.

The cabinet has already cut spending by 15 percent and is taking measures to crack down on smuggling and tax evasion to avoid a budget deficit and pressure on Bulgaria\\\'s currency peg to the euro.

Fiscal policy is almost the only tool Sofia has to influence the economy, which operates in a currency regime straightjacket which limits monetary policy.

The crisis has raised the jobless rate to 7.88 percent in August and the government has said unemployment may hit double digits at the end of the year.

The anti-crisis package includes plans to speed up the use of EU funding, mainly to modernise Soviet-era infrastructure and create new jobs.

The IMF has welcomed the fiscal plans of the government but urged a shift to new areas of growth because property, construction and financial services, which had accelerated the economy in the past, would no longer be drivers.

The downturn has put an end to 12 years of growth. Analysts and the IMF expect the economy to shrink 5.0-6.5 percent this year.

(Reporting by Tsvetelia Ilieva; editing by David Stamp) Keywords: BULGARIA FINANCIAL/JOBS

(tsvetelia.ilieva@thomsonreuters.com; +359-2-939-97-31; Reuters Messaging: tsvetelia.ilieva.reuters.com@reuters.net)

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