ABSTRACT
This chapter begins with the region newly divided in 1878 by the Congress of Berlin between five Balkan states and the remaining Ottoman and Habsburg borderlands. Its largely European members received access to state revenues in order service the foreign debt. The National Bank finally received the right to issue silver-backed notes in 1899 and for the gold-backed notes convertible for foreign debt service in 1906. For Bulgaria, the cost of its railway construction created less foreign debt but more controversy. The three European loans contracted between 1888 and 1893 had amounted to only 210 million leva, leaving Bulgaria with the lowest foreign debt and highest effective rate received from the loans in the region, 83 percent. The larger French Development Loan of 1.3 billion francs in 1931 was intended to reduce the budget deficit and keep the servicing of foreign debt.
