BUDGET AND TAXATION/GENERAL FINANCIAL STATUS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00926A004200030004-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 14, 2016
• Document Release Date: February 14, 2002
• Sequence Number: 4
• Publication Date: August 2, 1951
• Content Type: REPORT

Approv sS ftftMp?0Q ~W l 0 004200030004-
,CENTRAL INTELLIGENCE AGENCY
INFORMATION REPORT
COUNTRY Paa
SUBJECT B~~et and zus
PLACE
ACQUIRED
DATE
ACQUIRED BY SOURCEI
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REPORT NO.
CD NO.
DATE DISTR. A Aug 1.951
NO. OF PAGES i
NO. OF ENCLS.
(LISTED BELOW)
SUPPLEMENT TO
REPORT NO.
The luga a,:a national _i
u y' e?t .."1.9 31,, a s ofi'1.iali7 v a aaixra eA, .1 , 279 billion
lea, or 67 billion lever r than the prf -Io , ye'r3ro hoer, L, re lly
the
municipals.
'oy part of the actual bu"Ia t, ar it does not in r;?
ude_
and e1r e~ e xb?i ~~ea ipportee . by - t to foz . ; -t se l la sd t f :r 'Rtdgari.a
can b7 no a ere. b less A. a. 4000 'billio), lava, exolaa I a crest funds f Or Military
and Para' pease tuz s . .>^.s= n ?t'"he, 4Yu::5 'r i., at least 4"'30 mi1lio.a9 thin
means t h a t each of the sever. ic tit :a : xppr t ; , bu den of 5,700 lava
yearly. Since., according to c f'ici sato tietice, there abouat one Ilion aged
persons, Invalids., etc, the actuwa.1 to : burden is err iw d 40 thoraoa nd le'r a year
per family,, although its av rag i ncoYia is at the most SO thcusan l ;Nv .
2. Despite official ueolsraatioaa to the a~ox t a W , a &~ * t deal of a pio ant exists_
in Bulgaria. Those w r h o c au of pro -re, that they a.r ,~4pport u r n of the Ca p St
Party simply do not receive v -;ploy, east, e lie- in m spx? . in. the Nrilla w gei,' the
cooperatives are not allow d to give work to more than a quarter of the, T .lif'ied
able-bodied members of the r .1 audli,.aa. in additiox to this, aerial
shortages bri g about lay-of-'fe by Ind trial t~i is er As a r ea1?t of t'ae
continual fail es of the va.r^kWrse p d uctioza ~.ocs ,i~,:a, a o all of th.6ir
labor force is today
The taxation policy for 1951 is not based on ; rort Y owned or i. a e, but rather
on whether the taxpayer is for or a gains-it the Aa Ira rh s P y. By area .s of its
-
i t a r to ~. a r: ear ;c cess, to an3RDpro
policy the Party is s'tri.? , g,, &Id
letaria n out of ee'l-.thy- Bl a ?laals .
About Etce tuber 1950 the "*'O Aers of the troy Plat, .t a epecial meeting),
requested ? ,he goy n= nt to exteX a th a loan the co aple tiao; of new i t . a-
tio . 'olio i a?is exa ij,.le, other ant~r is e=W .ad. aiedlea; v r est o At the
beginning of 1951 pplwLat=y' vasteri.als &94. for`!s rega: dl the loans were
received fro the g oy& ....re t, by the. Ckoliya g;! nci?is s . :-'c ~3a 51 there was a
o erence in, the city of Elk'h vo ttamdc d by Party ctionaries and workers e
representatives. At that time it wan a o-uuced that the total loan to the Okoli.ya
would be 125 ts) !Boxer lama., which the ci ti, ze of the Okoiiya a?,a,Ld pay out of their
Pockets. d d L? ua7_ were appcinted, t c go ?oa.:.ouse to house seeking pledges
from each family. ?h.hose who es{ested. were; ti ateaaed. Finally all sided the
pledges, promising at least one, month ? e, pay. Tnc teed of 10 billion a total of
15 billion s".s PIC-e,=~
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The present financial situation in Bulgaria may be ch p%cteaized as hopeless The
fix anci:s l policies followed by the Corranub s t g o x~ : *.st right be described as
.ous. A clearer picture of the situation is offered by considering the question
Viler the follow ug sub-headings.
(1 Monetary Policy
(2) Credit Policy
(3) Savings.
Toaat
favorsa'ble export balance, and maintenance of
e value of money of any state depends on the
s`"tab lity of the national
t1(o gold reserve.
These conditions are not being f_ilfilled in B gasia. Since the Communist govern-
ment of $ulgaria is 'a satellite of Moscow, all its ecou(>r c policies are intended
to,profit the USSR rather than Bulgaria. Bulgarian foreign trade is limited to the
U9$$, anc through this country, to other satellites. Thus, for instance, all
4garian agricultural production is shipped to the tia3R at cost prices, while goods
i.orted from the USSR are paid for at high prices above the USSR market ceiling.
the meantime, the USSR exports Bulgarian produce at high prices p thereby damaging
national economy, especially as regards the sale of tobaccoes and rose oil. As a
su.1t of these discrepancies between p:?ie e? received for exports and prices paid
for imports, 'Bulgaria is always In debt to the tiSSR.
For reasons of security and stability,, according t.) the Cor unists, the entire.
arian gold reserve has been transferred ts:o the USSR, and at present the ley
'has no cover at all.
9. As a result of the unfavorable trade bale ce ax:O. the lack of gold cover for the
le'r), the currency has depreciated with respect to the dollar to one tenth of its
1939 value. By the same token, its value has diming.sshed in relation to other foreign
0 ,c#es., $enoe, in order to camouflage the catastrophic inflation in Bulgarian
the ( sits resorted to t1e exchange of banknot s in 19k . In 1950 the govern-
ma, payments s .espite the absence of any funds. The norms, coati-ibutionss,
d payments required b the state are so great that the citizens remain in a
x etual state of inde'tedness to it. Inflation denpite frantic efforts of the
Government 3s growing, damaging the national ono ;r and causing poverty. The
result is hunger, sickness, and in particular. the scourge of tuberculosis.
10. The credit activities of the Bulgarian National Bank, the Warbagage Bank, the
people's 'banks, and numerous private banging irS.ti.t~uztiorc have. been concentrated
si=c 9 Sep into two credit institutions; the vulgaarian National Bank and the
*tdarian Investment Bank. The Bulgarian National lIarlJt extends commercial credit
Vhi.le the Bulgarian Investment Bank engages in Investments aa~zd is not authorized to
fiend credit 'to private business. The o Tay :anctiou remaining to the people's
~s , the village credit cooperatives is that 0p collecting deposits for the
arian Rational Bank.
11. CreAl.t extension to. government economic and inmcAtustri .1 enter rises is carefully
p anhed and strictly limited. There is a mat dfial of red tape" involved and,
the rates, of interests are high, being five to e.bt : percent. Due to the in-
C etence of those in charge of credit, ass;;, the uuc promieing attitude of the
Undnistr4tive and technical experts, who I ve only Party backing and often cannot
sign their own name, more than 50 percent of the enterprises show losses on
operations and are headed for certain ruin, as is the national economy.
SIr: /US O Cm's oniz
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12. By virtue of the E srien National Bank law and the ministerial decrees, the right
to accept savings de +osits belongs only to the Bing ri n Xt~tional Bank, while the
people r s banks, the credit cooperatives, and the postal savings bank. can only
result of this, the 3ulgarie economy is go from bad, to worse
iee'ept savings depoeits for the accounts of the Brian latioral Bank. Partly as
13. During 1939, with the stabilization of the lev, the strengthening of the national
tco o ''.. + d ma tee of sayings p savings,, deposits totaled over 20 billion levai
by the end of 1950, with the ley d.evalw ted. to one tenth of its value in
1939, there were no more than five or six billion lava thus invested. This is due to
the sagging economy, the lack of interest in productive -rk , the absence of a
tike of, sav in s, the people l s lack of confidence in any credit institutions,
and the fact that the Dover ut collects savings for back taxes and debts or spends
the people Is money recklessly on stupid and impractical Communist building projects,
such as d Ms, strategic roads., militarily strategic installation s, etc < Today the
VAtion owns a mere five to six billion in rapidly- decreasing savings. In Slkhovo
Qk9li out of 600 million in savings, a mere 50 million bpd remained by the end
of 1950.
14.
The second., type of savings is life insurance, but in Bulgaria because of the dis-
jointed national econno and i ove labmaret of the people, this type of savings is
decreasing in voles each year. Until the establi xY nt of the State Dourance
titute during the month of June 196, a total of 206 insura$*ce societies had
reserves in the amount of over 1 '6i111Cana leva, which were in part a2.epe sited in
banks amd partly invested in securities, gi .xng the policyholeers adege ate guar=tees
on their insurance. Today., all the old eM new say s are. a.issipated by the
Communist vent on socialist constructi o a, amd other e enditur es which pauperize
the ri a There is no guarantee for the investor., and the people have lost
all confidence in this type of savings o
CBOT/US 0 ICY ony
Approved For Release 2002/07/24: CIA-RDP80-00926A004200030004-0.
Approved For Release 2002/07/24: CIA-RDP80-00926AO04200030004-0