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payments (imports of goods and services, transportation, interest and principalpayments, insurance, training, medical treatment and other purposes definedby the Bulgarian regulations) must be supported by documentation showingthe need and purpose of such payments.2. EconomyIn 1991, Bulgaria chose the road to a rapid and radical economic reform, beginningwith the signing of Bulgaria’s first program with the International MonetaryFund (IMF). The major objectives of this program were to curb inflation,slow down the decline of economy, achieve a relative stability of the nationalcurrency and encourage a rapid annual growth of the private sector until 1995.Within these four years, the cornerstones of legal and institutional framework ofthe market economy were put in place.After two years of growth, the GDP dropped down again in 1996 and 1997. Themainreasonsforthedeclineincludestructuralreformdelays,aslow-downoftheprivatisation process and a loss of the international market position of Bulgariancompanies after the disintegration of the Council of Mutual Economic Assistance(CMEA).The embargo on ex-Yugoslavia and debts of over USD 2.5 billion owed toBulgaria by third-world countries further aggravated the Bulgarian economy.GDP Growth EU-BULGARIA2000-2006 (%)765432106,6 6,26,15,454,53,93,84,13 2,72 2,5 21,91,7 1,41,2 1,1 1,3 0,82000 2001 2002 2003 2004 2005 2006Source: National Statistic Institute, EurostatEU 27EurozoneBulgariaThe severe depreciation of the national currency in end of 1996 - early 1997 wasthe main factor for the high inflation during the whole year. In the first quarterof 1997, a new agreement reached with the IMF marked the introduction of acurrency board (July 1997) and a set of austere and radical new measures forpolicy reforms. The national currency - Bulgarian Lev, was pegged to the Ger-6 BSMEPA