Bulgarian Empire

Chapter 101: National Debt

"Your Highness, this is the policy formulated by the cabinet to deal with our upcoming fiscal deficit!" Konstantin handed over a copy to Ferdinand in nervousness.

After taking the documents, Ferdinand carefully flipped through them. In fact, after the cabinet meeting, Ferdinand just received the news, and he was not surprised by the result. Frankly speaking, the cabinet's decision was not wrong, and it did not blindly pursue political gains while ignoring the actual situation.

But it does not mean that Ferdinand is willing to accept this result! As a traverser, he knew the cruelty of the future battle!

An overview of the behavior of the Balkan countries in the Great War: Serbia, as a trigger, was directly wasted; Romania was beaten into the ground, shaky; Greece played the game foolishly, their own problems are not fixed; Bulgaria was on the wrong side, the behavior is good again for nothing!

Ferdinand knows very well if they can not build up enough strength before the first battle, at that time will certainly become cannon fodder, and the ending will be the word 'tragic' in any case!

The projects that started in 1893 are not going to change, and the projects that the cabinet plans to cut are for the next three years. It is easy to stop the cabinet's decision, Ferdinand can easily veto, but it will be a problem to solve the fiscal deficit!

How about international loans?

No way!!!

The extra conditions alone are enough to bring anyone into infamy!!!

What about issuing bonds?

It seems feasible if someone is willing to buy it!

That's right!!! On the issue of bonds, they can not sell their own bottom part. It is business anyway, this year's currency is directly linked to gold, and there is no devaluation! So they can solve at least the deficit of 1894 well!

"Well, Mr. Prime Minister, hasn't your cabinet thought of any other way? You know that these projects are crucial for the future development of Bulgaria!!!" Ferdinand said in the pretense of distress.

In Konstantin's mind, it's really coming! He gulped and said: "Your Highness, in addition to this, we can only borrow from the international market! But you know, while the economic crisis is still going on, the price we have to pay to find international loans is too great! We have no choice but to cut back on some projects that are not important!"

After listening to Konstantin's explanation, Ferdinand's face did not change in the slightest, and he said calmly: "You have told me that you are aware of all these cases! But why have you not considered the domestic? With the government's prestige, issuing bonds at home and abroad, even if it sets a higher interest rate, we can afford it! In this way, all we pay for is just some financial gain!!!"

When he heard Ferdinand's words, Konstantin's eyes lit up and darkened again. He said with a bitter smile: "Your Highness, I'm afraid this is difficult to do! Even if we set the interest rate higher, it would be good to be able to sell 10 million without making sales to corporate investors!"

Ferdinand said casually: "Even so, we can solve the 1894 capital turnover, no? The latter will be discussed at that time, and if we really can't do anything about it, we will proceed as per the current plan!

After some thought, Konstantin said: "Your Highness, in theory, all this is possible, but we also have to consider the interest problem! Now we have to pay more than 12 million Leva a year in interest on our loans, and if we add these bonds, then our future interest expenses alone could be as high as 30 million Leva, which is close to two times of revenue!!!"

"Oh, it's double what the revenue is now, right?" Ferdinand asked instead.

"Yes!" said Konstantin.

"Then it's good! Don't forget that our economy is not growing slowly, and by that time, the revenue will definitely be much higher than it is now!!! Well then, interest is not a problem! The premise is that you are able to sell out!" Ferdinand said with a clear mind.

What a joke, when the "Second Five-Year Plan" is completed, Bulgaria's national power will be greatly increased. It is still simple to escape the crisis!

...

After dismissing Konstantin, Ferdinand knew it was time to raise funds. He already knew that the international financial has limited interest in Bulgaria, and now that the economic crisis has just started, everyone is busy! The domestic is even less to consider, except for Ferdinand, who is a big buyer, all the others are worthless!!!

Ferdinand is still thinking about how to raise money. The cabinet is already making plans for the issuance of bonds. After leaving the palace, Konstantin did not delay and convened a cabinet meeting about the economy in a hurry.

Konstantin didn't whine. He just spelled it out: "Gentlemen, I'm calling you here for the same fiscal deficit issue as before! I went to the palace a while ago to report the cabinet's final decision to His Highness, but it was not approved!

Moreover, a new idea has been proposed by issuing bonds bills using public interest and borrowing money from the private sector to solve the deficit! Now our task is to determine if it is feasible? And if it is feasible, how should the bonds be issued?"

After hearing Konstantin's words, there is no doubt that another door has been opened and everyone has been lost in thought. The fact is that issuing bonds is not been something new for a long time.

However, unlike future generations, in the 19th century, the purchasing power of ordinary people was limited, and it was the wealthy corporations that could really afford to buy. The sale of bonds could also usually only be endorsed by the bank and sold to the community by proxy.

Anyway, they all have to be drawn by the banks for an income and investment platform, so often, people prefer to go to the bank for a loan, rather than relying on the bonds that may not be able to sell out!

"Your Excellency, there is no problem in theory to issue bonds, but how to sell them out? You should know that our capital deficit is not ten or eight million Leva, but up to one point seven hundred million Leva, and may even eventually exceed two hundred million Leva!!! There are not many financial agencies in the world that have the ability to take it, and without enough interest, I'm afraid it will be hard to push them?" Chekhov raised the question.

The crowd turned their gazes of hope to Konstantin in unison, expecting him to have something good to say.

Konstantin explained, "This problem, in my opinion, can be solved in smaller amounts!!! We don't have a shortage of funds because that will happen at once. We don't need to issue so many bonds all at once!

It can be divided into smaller numbers and promoted to the market slowly so that the financial structure has the strength to accept much more. We can also pay as little as possible!"