Bulgaria's Finance Minister Simeon Dyankov said on October 30 that his predecessor Plamen Oresharski had struck a secret agreement with the country's central bank to deposit one billion leva from the country's fiscal reserve with commercial banks in 2008.

Dyankov himself made a similar proposal earlier in October, saying that it would help raise additional Budget revenue. The fiscal reserve is deposited with the Bulgarian National Bank (BNB), where it earns minimal interest.

Public opposition to Dyankov's suggestion prompted Prime Minister Boiko Borissov to scrap the proposal.

But such an agreement was already in place in 2008, when one billion leva, about 14 per cent of Bulgaria's fiscal reserve, was deposited in commercial banks, Dyankov said during question time in Parliament. The money was deposited in 17 banks, he said.

The secret agreement that allowed this to happen was signed between former finance minister Oresharski and BNB governor Ivan Iskrov and included a provision that a further one billion leva could be deposited in banks, Iskrov said, as quoted by website investor.bg.

"Under the government of the tripartite coalition, a big part of the fiscal reserve was not safe. Not only was it not safe, this was done in secret," Dyankov said as quoted by Dnevnik daily.

Oresharski, who had criticised Dyankov's earlier proposal, said on October 30 that the agreement had a preventive nature and was meant to be enforced only if the government had to bail out banks. "Secret agreements should not be made public. I would not publicise issues that hold a threat to financial stability," Oresharski was quoted as saying by Bulgarian news agency BTA.

Oresharski said that the agreement was struck in October 2008, but Dyankov claimed that it dated back to May 2008, long before the global financial crisis took a turn for the worse.