BTA 26-05-95




MAY 26, 1995













    Vienna, May 25 (BTA) - The Bulgarian permanent representative to the Organization for Security and Cooperation in Europe (OSCE), Ivo Petrov, handed to the representative of the Chairman of the OSCE Council of Foreign Ministers, Hungarian Minister of Foreign Affairs Laszlo Kovacs, a joint letter on behalf of the governments of Bulgaria, Greece, Moldova, Romania and Ukraine drawing attention to the serious economic problems those countries are facing as a result of the strict application of the UN Security Council sanctions against the Federal Republic of Yugoslavia (Serbia and Montenegro).

    Presenting the initiative at the Council today, Ambassador Ivo Petrov specified that the letter was not an appeal to lift the sanctions but an attempt to draw the attention of the international public to the specific problems of third countries affected by the Yugoembargo, as well as to the ways of alleviating the burden of problems and resolving them.

    The document, made out on Bulgaria's initiative, stresses the negative effect of the sanctions on the economic development of affected third countries and the necessity to implement urgent measures to relieve the burden of their specific economic problems, which would be a contribution to stability and security in the region.

    It is proposed to consider the problems of third countries affected by the Yugoembargo at the OSCE economic forum to be held in Prague from June 7 through June 9, paying special attention to the need to accelerate the implementation of projects for the improvement and modernization of their transport, power engineering and communication infrastructures, which would help those countries a lot.


    Sofia, May 25 (BTA) - The cabinet today decided to drop from the list of government-monitored prices electric bulbs, electric boilers and water-heaters, plastic cans, men's, ladies' and children's shoes.

    The cabinet cut customs clearance charges for the processing of papers by two percentage points to one per cent, and the ceiling charge to 700 dollars from 1,000 dollars. Customs clearance charges will be collected for consumer goods imports and exports. Temporary exports and imports, reimports and reexports, and transit are not subject to charges.

    The cabinet today fixed the daily allowance of the personnel of the Ministries of Defence and the Interior and the other militarized departments, organizations and units. A government spokesman said he could not cite the exact amount of the allowance because this item of the agenda had been discussed behind close doors. Speaking to the press before the meeting, Interior Minister Lyubomir Nachev said he expected the allowance to increase from 800 leva to 1,100 leva.

    The cabinet will propose to Parliament to grant permission for a joint exercise "Cooperative Rescue 95" of the Bulgarian navy and NATO's Standing Naval Force Mediterranean from June 2 to 7 in Bulgarian territorial waters. The exercise is on NATO's Partnership for Peace schedule for 1995. Its aim is to achieve compatibility and coordination in the organizing and conduct of rescue operations. The Black Sea countries will be invited to send observers.

    An Insurance Bill approved by the cabinet today abolishes mandatory insurance except liability insurance and public transport accident insurance. The Bill opens up prospects for foreign investment through acquisition of stakes in local joint-stock insurance companies or through the operation of foreign insurance companies. Life insurance will become an independent branch and life insurers will not be allowed to work in other branches. This provision is made on the grounds that the premium funds belong to the insured.


    Sofia, May 25 (BTA) Parliament adopted the new amendments to Decree No. 56 on Business Activity. Operating since 1989, the decree has been amended 17 times so far.

    Under the latest amendments, the tax schedule applied to the State Savings Bank will be the same valid for all other banks. The State Savings Bank will no longer have a monopoly on deposits, for which a higher tax was charged on its profit; it operates as a lending institution as all other banks do.

    Under the amendments juristic persons may make donations before tax. Juristic persons can deduct up to three percent of their profit before tax to make donations to the State, municipalities and the Church, to educational, scientific, cultural, health, social, sports or tourist organizations non-profit or state-financed ones. Donations may be made to foundations concerned with charity, environmental protection, health care, scientific researches, education and culture, and to funds set up to provide relief to the victims of natural disasters, to restore and conserve natural, historical and cultural monuments, to help socially disadvantaged and disabled persons, to finance scientific researched and to grant scholarships to students, sick persons and orphans.

    Other amendments eliminate the inequality of local and foreign natural persons, introducing a uniform tax schedule.


    CABINET - Sofia, May 25 (BTA) - The cabinet today introduced tariffs on some dairy products and is seeking opportunities to urgently export white brined cheese and yellow cheese. These steps came in response to protests by dairy farmers.

    In a petition read out in Parliament today, dairy farmers from Southern Bulgaria protest low milk purchase prices and the large imports of powdered milk, as a result of which they sustain considerable losses. The petition, read by an MP of the Popular Union (a coalition of the Bulgarian Agrarian Party and the Democratic Party), caused a scandal. Two weeks ago the dairy farmers' demands were backed by the ethnic Turks' Movement for Rights and Freedoms. The petition calls for protection of the interests of private dairy farmers. Farmers demand that duty-free and illegal imports of dairy products stop and that the import regime for equipment used in the dairy industry be relaxed. Dairy farmers threaten that unless their problems are solved within two weeks, they will start pouring out ten tonnes of milk in front of the Parliament building every day.

    The cabinet introduced a specific tariff of 700 dollars per tonne of butter, but no tariffs on powdered milk and cow's cheese, as demanded by farmers. The question remains to be discussed at the Agriculture Ministry.

    The cabinet did not introduce minimum milk purchase prices either. Producers demand a minimum price of 14 leva, while purchase prices now vary between 6 and 8 leva/litre. The issue may be discussed by the cabinet next week. Today the cabinet decided that the government reserve should buy 1,000 tonnes of white brined cheese and yellow cheese for export so as to reduce the excessive stock of dairy products.

    Agriculture Minister Vassil Chichibaba said some 1.6 million litres of milk are offered daily for sale in this country, but he expects that up to 2 million litres will be available in the near future.

    A fund for state-regulated prices of agricultural products will be established once a Protection of Agricultural Producers Act is passed. Its second reading is forthcoming.


    Berlin, May 25 The Bulgarian Deputy Prime Minister and Minister of Trade and Foreign Economic Cooperation, Kiril Tsochev, who attended the second session of the Bulgarian- German Cooperation Council in Berlin, today met with German Minister of Economics Guenter Rexrodt.

    The sides praised highly the results of the session. It was said to have addressed specific aspects of Bulgarian-German business relations and cooperation, helping to strengthen them. In this connection, Guenter Rexrodt approved the project for the establishment of a Bank for Development and Support to Medium-Sized Enterprises in Bulgaria. It can rely on support by the German credit institution for reconstruction.

    The conversation, which lasted for over an hour, also highlighted Bulgaria's integration into the European structures. To accelerate this process, Bulgaria needs more decisive reforms, especially in privatization, as well as speedier passage of key economic laws and their approximation to Community Law, it was stated at the meeting. The German side hailed the setting up of a governmental committee which is to prepare Bulgaria's accession to the EU, chaired by Prime Minister Zhan Videnov.

    Germany will support the infrastructure project for the construction of a bridge over the Danube in Northwestern Bulgaria, Rexrodt said, expressing his country's willingness to provide consultancy and insist that the EU partly finance the project. He reaffirmed Germany's commitment to act as a major proponent of Bulgaria's interests in the EU.

    Visa restrictions on Bulgarians under the Schengen Agreement were also on the agenda. Guenter Rexrodt stressed the need for negotiations between Bulgaria and the Schengen countries. These negotiations could be expedited if Bulgaria ensured stricter law-enforcement. Meanwhile, the Federal Ministry of Economics will insist on the faster issuing of entry visas to Bulgarians, especially to businessmen.


    Sofia, May 25 (BTA) - Returning in Sofia this afternoon, Deputy Prime Minister Kiril Tsochev said that the results of his visit to Germany surpassed his expectations. Germany showed particular interest in the privatization and investment processes in Bulgaria. The sides considered the projects presented by the Bulgarian delegation for partnership, investment, joint ventures and participation in the privatization of enterprises operating in the chemical, the pulp and paper and the power engineering industries, in metallurgy and the light industry, in mechanical engineering and construction.

    A German and a Bulgarian 60-member delegations took part in the session; five working groups sat within the framework of the Bulgarian-German Cooperation Council.

    The consumer goods working group focussed on the need to accelerate the establishment of company pools in the two countries and to help the Bulgarian companies in marketing their products. The working group hailed the decision of the German Credit Institution for Reconstruction to provide assistance to banking in Bulgaria and open credit lines. In the opinion of the economists, the machines imported for production purposes in Bulgaria from Germany should be exempted from customs duty.

    The working group on the food processing industry and agriculture received detailed information from Deutsche Bank and the Bulgarian First Private Bank about providing Hermes guarantees of DM 100 million. The group discussed the opening of additional credit lines to finance sugar, flour and cooking oil production projects. Another major topic was the activation of trade relations and helping along the export of Bulgarian farm products to Germany: wine, fresh fruit and vegetables, canned foods, mineral water, dairy and meat products, Kiril Tsochev specified.

    The working group on energy considered the reconstruction Bulgaria's conventional and nuclear power plants at a minimum cost and the construction of new thermoelectric power stations. The possibility of providing funds through the European Bank for Reconstruction and Development, the European Investment Bank and the World Bank were also discussed.

    The working group on tourism reported a considerable drop in the number of German tourists visiting Bulgaria. One of the reasons for it is the growing gap between the price asked and the quality of services. The group considered measures for resolving the problem, which include acceleration of privatization and creating better conditions for investment in the tourist industry and its infrastructure.

    The participants in the session observed that in a year's time Bulgarian-German trade grew 22.8 percent; Bulgarian exports to Germany increased 32 percent, Deputy Prime Minister Tsochev said. In 1994 trade between Bulgaria and Germany added up to DM 1,800 million.

    The sides reached an agreement on the next intergovernmental consultations to be held in Sofia in 1996. more


    Sofia, May 25 (BTA) - Parliament passed on second reading today the Bulgarian State Railways Act. According to it, the Bulgarian State Railways (BDZ) is a national company with state enterprise status. There are provisions on the operation, property and management of BDZ. The Act defines BDZ's object as the transportation of freight and passengers on a commercial basis.

    The BDZ is to be managed by the state, represented by the transport minister, a governing board and a director general. Safety is to be controlled by the transport minister through the State Railway Inspectorate.

    Parliament today amended certain pension laws, increasing the pensions of veterans of the Balkan War, World War I and the Patriotic War (1944-45) from June 1. They will be entitled to an increase of 226 leva (3.5 dollars), equal to 20 per cent of the social pension, which is 1,130 leva (17 dollars). It was reported that 126,000 pensioners are entitled to a pension increase. There are 107 veterans of the Balkan War and World War I. The amendments were supported by all parliamentary groups.


    Sofia, May 25 (BTA) - Participants in the European Days of the French-language press set about working today. This edition of the Days, the first held in an East European country, will focus on the role of the media for the preservation of cultural identity in Europe. The Days are held once a year by the International Union of French-Language Journalists and Press.

    The first working session was opened by Deputy Foreign Minister Stefan Staikov. He familiarized the guests with the basic principles of Bulgaria's foreign policy. In an address to the forum President Zhelyu Zhelev assured the participants that in spite of the difficulties of the transition period, Bulgaria has joined the family of democratic nations. He quoted Article 40 of the new Constitution, according to which the press and the electronic media are free and are not subject to censorship.

    Vladimir Kostov, Editor-in-Chief of the "Continent" daily, attracted a lot of attention. Kostov made a detailed review of the Bulgarian press and for over an hour fielded numerous questions about the freedom of the press, financial policy and distribution, among others.

    French Ambassador Marcel Tremeau and the French Cultural Attache Fernand Texier attended the session. Both of them spoke about the broadcasting of the French satellite programme TV5. Mr Texier said that Bulgaria has contracted to air eight-hour broadcasts, but has reduced them unilaterally to five hours. In his view, the future of TV5 lies in cable television, but this would take at least three years to materialize, there being no law on cable television in this country. Mr Texier said France is ready to install a transmitter for TV5 broadcasts and provide subtitled programmes or simultaneous interpretation for at least one hour a day, provided that Bulgaria broadcasts the programmes for eight hours a day.

    The discussions continued into the afternoon. The forum is attended by some seventy journalists from most French- speaking countries. Tomorrow the participants are meeting with politicians and MPs. Later on they will be visiting the town of Melnik (Southwestern Bulgaria) to see its historical and cultural monuments.


    Sofia, May 25 (BTA) - According to the latest estimates, Bulgarian industry has to repay credits to the tune of 48,000 million leva (1 USD exchanges for 66.103 leva), Industry Minister Kliment Vouchev said at a meeting with bankers and financiers yesterday, the "Pari" daily says. The Industry Ministry has nothing against the banks taking over a reasonable share of the companies, Vouchev said. Industry employs 38% of the workers in material production and provides 66% of budget revenues. The financial institutions may reschedule and even write off some of the interest on credits extended under government decisions, if they are refinanced by the central bank under certain conditions, "Standart news" adds.

    The European Union will impose customs duties on a new group of Bulgarian commodities as of June 1, 1995, "24 Chassa" says, citing an announcement of the Trade Ministry. According to this daily, this would decrease preferences extended to Bulgaria in its trade with the EU by 40%.

    Gold mining in Madjarovo (Southern Bulgaria) is on the brink of ruin, "24 Chassa", writes, citing the manager of the mines Yordan Yordanov. Since the law bans extraction of precious metals by foreign investors, the Bulgarian-Australian joint venture set up to develop the deposit cannot operate. Not a single Bulgarian institution has committed itself on behalf of the state to guarantee the investments of the foreign partners, "Troud" says. According to initial plans 1 tonne of gold and 9.5 tonnes of silver were to be extracted annually in Madjarovo, "Standart News" recalls.

    Belgium is now second among the foreign investors in Bulgaria, "CASH" weekly writes. This small European state has by far outstripped traditional Bulgarian partners such as Germany, this paper writes, commenting on the recent investment made by the Belgian Interbrew in the Bulgarian brewing industry.

    Bulgaria and Korea have industrial structures which are complimentary to one another. If these develop rapidly, bilateral cooperation will expand, Mr Heungsoo Kim, Ambassador of the Republic of Korea in Sofia. According to Ambassador Kim, Samsung, Hyundai and Deawoo are actively seeking ways to invest in Bulgaria and that is why he would assist the signing of the agreement on reciprocal investment protection which is currently being drafted.

    The average annual edible snails population growth is between 600 and 1,000 tonnes, the financial "CASH" weekly says. According to customs declarations, a total of 2,644 tonnes of snails were exported last year. If this trend continues this species of snails may become extinct already next year.


    "Loukanov and the Multigroup Economic Group Lay Hand on Gas Business" caps a front-page report in the opposition "Demokratsiya" daily. According to the paper, an unnamed participant in the meetings Russian Prime Minister Viktor Chernomyrdin had during his last week's visit to Sofia said Loukanov's comeback to business as chief of a Bulgarian- Russian joint venture in the gas industry was "required" by the Russian oil and gas lobby which supports and finances Chernomyrdin's presidential campaign. The composition of the joint venture's management shows Loukanov will control the supply of natural gas to Bulgaria together with Multigroup, in whose official structures he figures since 1993, "Demokratsiya" says. This goes to substantiate the thesis of a restructuring of the capital the Bulgarian Communist Party had funnelled abroad after 1984.

    "I shall have to leave Parliament", Loukanov tells the "Zemya" daily. "Loukanov deserves congratulations, be it only for voluntarily giving up his political powers," "Troud" writes in an extensive signed commentary. "My withdrawal from the political scene is a protest against a policy without principles, against the absence of goodwill and interaction among the parties in the name of national interests," "Standart News" quotes Loukanov as saying at a news conference in Pleven, Northern Bulgaria, yesterday.

    Saying that Andrei Loukanov is leaving politics is farfetched, a signed commentary in "Continent" says stressing the strategic importance of the energy industry. "Andrei Loukanov is once again the man of the day in the big economy and the big politics," reads a commentary in "Standart News". Under the headline "The Shady Deals of a Former P.M.", this daily runs a brief account of Loukanov's activities in the past few years.

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