There is quite a bit of concern in the Balkan area about Greece and its plan to rebuild its economy through international borrowing.
New reports like one from Reuters on Feb. 8 show serious concerns related to new fears of another Greek
default. In the report, journalist John Geddie explains that Greece was able
to bounce back from a significant financial crisis in the past few years,
partially through specifically structured bonds and the backing of its
Now, reports show that conflict around reporting numbers has
Greece at odds with the greater European Union, as well as the International Monetary Fund.
If the bailout doesn't work in July, critics contend,
another default is a real possibility.
This is not good news for Greece's neighbors, some of whom
are already dealing with pretty strong financial headwinds.
For example, a Feb. 8 news release
on Radio Bulgaria shows that although Bulgaria has increased
exports to the EU, it still holds a negative trade balance with the
EU of over $1 million. In the same report, Greece is also listed as one of
the biggest exporters to Bulgaria.
While struggling with obstacles like a history of government
corruption, negative trade balances and other challenges, Bulgaria may also
face some of the fallout from any new Greek crisis.
Gary Patterson, who runs FiscalDoctor,
a business consulting firm, discussed the financial outlook in the region with Balkan Business Wire.
Patterson cited Wall Street Journal reports that suggest
Greece is turning in financial numbers that some outside parties consider “highly
suspect,” possibly putting loans in danger.
That could work out badly for the country, as well
as its neighbors, he said.
“There's never a good time to get bad news,” Patterson said.
Patterson explained that a crisis of confidence increase
could affect borrowing in other areas of the Balkans as well.
“Anything that indicates a problem with financial stability
will make investors and technology leaders leery about making a major
investment in your country,” Patterson said. “Bulgaria will be impacted.”
In the end, he said, current problems around
Bulgaria's bid to grow its tech industry and acquire outsourcing contracts may
be a case of bad timing. Some of this economic vitality may have to wait until
there is a more favorable borrowing and business environment in the region.
Problems around Greek assistance seem to be mounting
as the nation responds to its financial track record. A Feb. 6 WSJ piece
suggests Greece’s response is to “shoot the messenger” or claim outside
auditors have distorted the picture of Greek finances that, others say, are
“Before Greece’s debt crisis, its governments manipulated
statistics and masked the size of budget deficits, waste and patronage,” WSJ’s
Marcus Walker wrote.
These revelations, in part, led to the austerity so unpopular in Greece that’s
tied to a plan for successful repayment of loans. Finance
officials are continuing to work on this troublesome problem.
Greek repayment outlook could affect Bulgaria's financial growth