ISSN 2330-717X

Steve Hanke: Stoyanova’s Legislative Correction In Bulgaria Is Shocking – OpEd


On January 28, 2020, Bulgaria’s premiere digital news outlet, published a note on Johns Hopkins University Professor Steve H. Hanke and his deep engagement within the Bulgarian Banking and Financial Regulation Legislation and the successful implementation of the country’s Currency Board System.  

In this publication Iconomist emphasizes: “On January 23rd, MP Menda Stoyanova amended the law governing the work of the Bulgarian National Bank. Stoyanova’s amendment would change the rules governing the currency board system in Bulgaria and the exchange rate of the lev to the euro.” 

In this context Prof. Steve Hanke, the father of Bulgaria’s Currency Board and adviser to former President Petar Stoyanov, notes: “Stoyanova’s correction is shocking. Why would you want to repair something that is not broken?

In fact, since the currency board was introduced and broke the crushing hyperinflation on July 1st, 1997, it has performed remarkably.  It is therefore not surprising that the currency board is the most respected post-communist institution in Bulgaria and is widely supported by the Bulgarian public.”

Professor Steve H. Hanke continues to caution the Bulgarian policy makers and is certainly ringing the alarm bells: “In addition to being shocking, Stoyanova’s correction is dangerous; it brings to life memories of Argentina.  On April 1st, 1991, Argentina introduced a system called “convertibility”. 

It wasn’t exactly a currency board, but it had some similar features.  Most importantly the convertibility system fixed the peso’s exchange rate into US Dollar. Convertibility killed Argentina’s inflation and worked well until early 2001.  It was then that Argentina’s economic tsar made changes to the Convertibility Law.  These were similar to Stoyanova’s amendment. The results were catastrophic.  In less than a year, on December 23rd, 2001, Argentina defaulted on its sovereign debt and political chaos reigned.” 

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Peter Tase

Peter Tase

Peter Tase is a contributor, freelance journalist and a research scholar of Paraguayan Studies and Latin American Affairs in the United States; he is the founder of Paraguay Economic Forum in Milwaukee, United States. Educated at the University of Wisconsin - Milwaukee and Marquette University, Tase is the author of "Simultaneous Dictionary in Five Languages: Guarani, English, Italian, Albanian and Spanish" and "El Dr. FEDERICO FRANCO y Su Mandato Presidencial en la Historia del Paraguay." Tase has written many articles on Paraguay's current Foreign Policy, Latin American Affairs and MERCOSUR regional trade issues for Eurasia Review and the Council on Hemispheric Affairs in Washington, D.C.. Peter has appeared on SNT Cerro Cora, Asuncion and appeared in “Tribuna Pública” in TV Publica Paraguay, as well as given interviews for Diario 5 Dias in Paraguay, ABC Color, Ultima Hora, IP Paraguay, Revista PLUS+, Radio Ñandutí, Radio Nacional del Paraguay, and Spero News. Tase completed a Congressional Internship in the Office of Congressman Richard Pombo (CA-11), U.S. House of Representatives, and studied U.S. Government and International Affairs at the Les Aspin Center for Government in Washington, D.C.. In 2012 he was an adviser of Foreign Affairs and International trade Issues to the Chairman of the Committee on Trade, Tourism and Industry in the National Congress of Paraguay. Peter Tase is fluent in Guarani, Italian, Spanish, Albanian and mainly writes in English and Spanish.

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