In October 2008, as Wall Street was still reeling from the news of Lehman Brothers’ collapse and AIG’s balance sheet black holes, authorities in Sofia were serenely proclaiming Bulgaria an island of stability, untouched by the spreading financial vortex and immune to economic slowdown.

Fast forward to May 2009 and the Cabinet is still in denial. Only this time it is not the state of the economy – the statistics board estimates for the gross domestic product put paid to talk of Bulgaria avoiding a recession – but rather how badly will Bulgaria be affected.

Taking into account the track record of Sergei Stanishev’s Cabinet and how often it has been proven wrong – from assurances that European Union funds would be unfrozen quickly to imperious declarations that the latest deal with Gazprom boosted Bulgaria’s energy security, from pledges that not a single lev of Budget funds would be used to build Belene to promises that Kremikovtzi would not be allowed to fail – one can be excused for taking the Government’s words with a pinch of salt. Make that a slab of salt.

Stanishev remains adamant that the stimulus plan he proudly proclaimed as his own last year will prove sufficient to offset the effects of the economic slowdown, banking mainly on increased Government spending on infrastructure projects.

Money that was previously scarce was made available in the simplest of ways – by increasing the target for the revenue collection and disregarding the warnings that a stuttering economy would generate lower tax revenue.

One had to admire the sang froid with which Finance Minister Plamen Oresharski instinctively answered every new petition for money in the first three years of his term with a resolute ‘No!’, reminiscent of Vyacheslav Molotov, Stalin’s foreign minister whose equally brash rebuffs reportedly earned him the monicker Mr Niet among Western diplomats.

Not that big a deal in 2009, however, when five billion leva were allocated for Government investment. For a very brief time in April, it almost looked as if the International Monetary Fund’s warnings got through and there was talk of Budget revision, but not anymore.

Oresharski blames the world crisis on "the intoxication with the fact that you could make money from nothing", as he told reporters on May 20. But the same applies to generating economic growth.

Lars Christensen, chief economist at Danske Bank and one of the Cabinet’s biggest naysayers, said it best earlier this month: "Now you really are looking at the difference between countries that have continued reforms through the 20 years and those that have simply opened up their economies."

Three guesses which category Bulgaria falls into and the first two do not count.