After Greece, Bulgaria comes clean as well. We lied to our EU colleagues. Our deficit is 3.7%, not 1.9%. We're dropping euro for now. Who's next?

„We lied to our colleagues in the EU about the capacity to adopt the euro. Our deficit is actually 3.7% and not 1.9%. We gave up our request to join ERM II (the euro anti-chamber) because of this” Bulgarian Prime-Minister Boiko Borisob told Reuters today. He did not miss the opportunity to blame the left-wing coalition, which took over power in July last year.

Analysts say that after his statement, the regional currencies have depreciated immediately. The Polish Central Bank had to interfere to maintain the zloty, while the Romanian currency the leu lost 0.6%. „It would be inappropriate to ask to join ERM II in such conditions”, the Bulgarian PM added.

The Bulgarian Finance minister Simeon Djankov said they will take additional measures to bring the deficit to the standards entailed by the Maastricht Treaty, namely 3% of the GDP.

According to him, the higher deficit level will not influence the leva exchange rate against the euro – the Monetary Council has ruled out a fixed parity – and it will not trigger shakes in the banking system. AFP informs that the Bulgarian ex-ministers have allegedly signed over 150 agreements which entailed spending worth of 2.16 billion leva (1.1 bn euros), including arm commerce, which have not been taken into account when the state’s budget was put together.

The Bulgarian PM warned that if these spending are to be supported this year, the deficit might go up to 6-7%. Finance ex-ministers claim that the PM’s statements are yet again another attempt to blame them in order to protect himself from the lack of popularity the crisis has brought.

According to other sources, in order to keep the situation under control, the Bulgarian Central Bank has allegedly sold a significant euro part of its reserves, as the euro had a very feeble entrance in the economy.

The lying „syndrome” addressing the real budget deficit seems to be typical for the region. Many ask themselves which is the next state to admit it.