News from Bulgaria / Sept. 19, 95

From: (Embassy of Bulgaria)

Bulgarian Telegraph Agency Directory




SEPTEMBER 19, 1995












    Prime Minister Zhan Videnov today left on a one-day working visit to Moscow, at the invitation of Russian Prime Minister Viktor Chernomyrdin. The invitation was made during a formal visit here a week ago by Russian Foreign Minister Andrey Kozyrev. The Bulgarian delegation includes the Deputy Prime Minister and Minister of Trade and Foreign Economic Cooperation Kiril Tsochev, the Deputy Ministers of Foreign Affairs Ivan Hristov and of Transport Stanislav Velinov, the Deputy Chairman of the Power Engineering Committee Roumen Ovcharov and the executive directors of Bulgargas and Neftochim. The talks will focus on bilateral economic cooperation. The liberalization of foreign trade, Bulgarian logging in Komi and transboundary projects will be high on the agenda, according to the Chief of the Foreign Ministry Eastern Europe and CIS Countries Department, Ognyan Gurkov. Videnov said before his departure that the two sides will discuss the peace process in the Balkans. According to him, it has reached a decisive phase, and no chance should be missed to promote peace and prevent the escalation of the war. "This part of my talks with Mr. Chernomyrdin will be a continuation of talks with Foreign Minister Kozyrev," Videnov said.

    "We will attempt today to make progress on important issues, such as transit gas and oil pipelines through Bulgaria to other Balkan countries, and the promotion of nuclear power engineering," the premier said. He specified he meant progress in the political field, in keeping with Bulgaria's and Russia's strategic views; the specific forms of interaction will be found by Bulgarian and Russian companies implementing the intergovernmental agreements.

    Videnov expressed his expectations to discuss with his Russian counterpart the signing of agreements on free trade zones, similar to agreements between this country and other nations in Central and Eastern Europe.

    Bulgaria will again raise the issue of preferences in bilateral trade. Deputy Prime Minister Tsochev announced last week Bulgaria renewed a request to be included in the list of 104 countries charged import duties at preferential rates. The request for a 50% reduction of duties on Bulgarian goods was made during a Chernomyrdin visit here in May. In spite insistence on the Bulgarian side, Russia has not yet given a favorable answer. The access of Bulgarian goods to the Russian market was made more difficult after Russia made changes in its foreign trade rules this summer.

    Bulgarian-Russian trade fell drastically in the last four years. Trade plunged eight to ten times, to $1,800 million in 1994. Analysts say Bulgaria lost most of its Russian markets, which now absorb only 15% of its exports. Russian exports to Bulgaria in 1994 exceeded Bulgarian exports to Russia twofold; 1994 was the third year in a row when Bulgaria posted a trade deficit. Bilateral trade in 1995 is projected at $2,000 million to $2,500 million.

    Observers say the fact the delegation includes Deputy Premier Tsochev and the Bulgargas chief probably has to do with the future of a Bulgarian-Russian joint venture, Topenergy. The contract for its establishment was signed by Bulgargas and the Russian Gazprom during Chernomyrdin's visit and is seen as one of the key agreements for Bulgaria.


    The situation on the Balkans and the role of Bulgaria and Russia as part of the European processes, and the progress of the bilateral economic cooperation since early 1995 were the focus of today's talks in Moscow between the Bulgarian and Russian governmental delegations, led by the two countries' prime ministers Zhan Videnov and Viktor Chernomyrdin. Bulgarian Prime Minister Videnov arrived in Moscow today on a brief working visit. The two governmental delegations noted progress in all spheres of the economic cooperation between Bulgaria and Russia. The sides agreed that negotiations for the drafting of the tripartite agreement on the construction of the Bourgas-Alexandroupolis oil pipeline between Bulgaria, Russia and Greece will be held in October. The project for the establishment of a joint venture for the refining and processing of oil and oil products between Neftochim and Rozneft received its final coordination, The joint venture will be set up in the next few days. The Bulgarian and Russian officials defined the details of the deal concerning the supply to Bulgaria of Russian military equipment earmarked for reduction. The two delegations also discussed the question of easing of the terms of the foreign trade exchange between Bulgaria and Russia. The two countries' officials agreed to start negotiations for the setting up of a free trade area, to be preceded by negotiations with the World Trade Organization. Prime Minister Videnov is scheduled to return to Bulgaria later this evening.


    Bulgaria and Slovakia signed two documents today: a visa- free entry agreement and an agreement on the readmission of illegal immigrants. The documents were signed in Bratislava where Foreign Minister Georgi Pirinski is on an official visit at the invitation of his Slovak counterpart Juraj Schenk. The delegations headed by the two foreign ministers held talks this morning. They reviewed the state and prospects of bilateral relations and discussed possible ways to expand economic cooperation between Bulgaria and Slovakia. The sides stressed the need to expedite and complete the talks on a free trade zone. Specific initiatives for transport cooperation were also on the agenda. The Slovak delegation highly praised Bulgaria's initiative to host in November a seminar on the role of trans-European structures in strengthening stability and cooperation in the Black Sea region. Bulgaria is pleased that another member country of the Organization for Security and Cooperation in Europe approved the initiative. During the talks Pirinski and Schenk discussed questions of regional cooperation and matters related to the enlargement of the Central European Free Trade Agreement. It was agreed that the two countries should continue reviewing the validity of the legal framework of relations between Bulgaria and the former Czechoslovakia. Certain problems with the buildings of the two countries' cultural centers were also discussed. Georgi Pirinski asked his Slovak counterpart to visit Bulgaria. Pirinski met with Ivan Gasparovic, Chairman of the Slovak parliament. The sides discussed the prospects for expanding cooperation between the two parliaments. Certain topical issues of the two countries' integration into the European structures were also on the agenda. Gasparovic invited Bulgarian Parliamentary Chairman Blagovest Sendov to visit Slovakia. Bulgaria's chief diplomat was received by Slovak Prime Minister Vladimir Meciar. Pirinski delivered Prime Minister Zhan Videnov's invitation to Meciar to visit Bulgaria.


    Bulgarian President Zhelyu Zhelev today received Athens Mayor Dimitris Avramopoulos who is here for the Day of Sofia. Dr. Zhelev hailed the guest's initiative for a meeting in Athens on October 5-6 of the mayors of the capitals in Southeastern Europe. The President pledged to make a special address to voice his support for the initiative he described as important and very useful. "The forum's ambition is to open up new ways for cooperation between the capitals in the region," Mr. Avramopoulos said after the meeting with Dr. Zhelev.

    The Bulgarian President and the Mayor of Athens first met in 1989 when in his capacity as chief of the Diplomatic Bureau of New Democracy leader Konstantinos Mitsotakis, Dimitris Avramopoulos participated in talks with Zhelyu Zhelev, the then leader of the democratic forces in Bulgaria. At the meeting today, the two were unanimous that the friendly relations between the two countries should continue to develop at all levels. The sides further discussed the upcoming visit here by Greek President Costis Stephanopoulos, said Presidential Foreign Policy Advisor Kamen Velichkov. "Bulgaria and Greece should strengthen their ties with a view to the common European perspective," the Athens Mayor said after the meeting. He believes that cities, capitals and local administrations could do a lot in this respect.


    "In April 1993 the Bulgarian and Russian interior ministers signed an agreement and now it is time to coordinate our activities under it," Russian Minister of the Interior Colonel General Anatoly Kulikov said upon his arrival in Sofia today. Minister Kulikov will pay an official visit to Sofia until September 21. "There are a number of issues in which we should co-ordinate our activities: tracking down of criminals, exchange of expertise, personnel training," he said. Bulgarian Interior Minister Lyubomir Nachev hopes that Minister Kulikov's visit will result in more active and beneficial cooperation in all spheres. "It is no secret that the recent contacts between our two ministries are not on the level we would like them to be. The situation meanwhile necessitates the closer, more efficient and operative cooperation in various issues," Minister Nachev said, adding that the last time for a Russian interior minister to visit Bulgaria was eight years ago. During the talks between the two ministries' delegations the Bulgarian and Russian officials outlined the framework of the future cooperation. We were unanimous that we need to cooperate more closely in combating organized crime: drugs trafficking, illegal emigration, illegal trade in strategic raw materials and weapons, Minister Nachev said at the news conference later today. He said that the procedure for appointing Colonel Stefan Dimitrov, former chief of the National Security Service, as Bulgarian Interior Ministry official representative in this country's Embassy in Moscow is underway. Russia will appoint such a representative in Bulgaria in 1996, Minister Kulikov said. Statistical data puts the number of crimes committed by Russian nationals in Bulgaria at 141, 97 out of which were property thefts, Minister Kulikov said. He also stressed on the fact that in 1994 there were 87 crimes against Bulgarian nationals in Russia, while their number for the first eight months of 1995 stands at 60. In 1994, Bulgarian nationals committed 56 crimes in Russia. Speaking about organized crime in Bulgaria, Minister Nachev pointed out that the criminal groups in this country initially emerged as groupings of wrestlers, which then became security firms, later emerging as insurance companies. Stressing that these groups are now legalizing their funds through investing in lawful businesses, Minister Nachev did now rule out the involvement of law enforcement structures in illegal activities connected with the forthcoming privatization of state-owned businesses. Tomorrow the Russian interior ministry's delegation, which is led by Minister Kulikov, is expected to visit the Interior Ministry Troops National Service and the Counterterrorism Commando. The Russian guests' schedule also includes visits to the regional directorates of the interior in Sofia, Pleven (Northern Bulgaria), and Varna (Eastern Bulgaria).


    MPs of the parliamentary Foreign Policy Committee voted down a request of MPs from the Russian State Douma to assist in providing a transport corridor through Bulgaria for delivery of embargoed petrol, fuel and lubricants as humanitarian aid for Serbia. There is a consensus in Bulgaria on a balanced foreign policy in relation to the conflict in former Yugoslavia and the impossibility to lift unilaterally the U.N. sanctions against Serbia and Montenegro, Committee Chairman Nikolai Kamov of the Parliamentary Group of the Democratic Left and Deputy Chairman Assen Agov of the opposition Union of Democratic Forces (UDF) told the Russian MPs. The visiting Russian parliamentary delegation includes Konstantin Zatoulin of the Democratic Party, Vitalii Zhuravliov of the Liberal Democratic Party, former spaceman Vitalii Sevastianov of the Communist Party and independent MP Sergei Glotov, who also heads the group for friendship between the Russian and the Serbian parliaments.

    The Russian MPs also asked Bulgaria to support before international organizations Russia's policy in defense of Serbia and its protests against NATO's airstrikes; they also wanted Bulgaria's assistance for restoring the military and technical cooperation between Russia and Serbia. "Do not forget, that despite its numerous appeals, Bulgaria has not received a reply to its demands to be granted compensations for its losses from the sanctions, as well as the fact that the gas which Europe uses, is coming from Russia," Konstantin Zatoulin said.

    The members of the Russian delegation appealed before the Bulgarian Parliament to discuss a law about humanitarian aid for Serbia, which they will send as soon as it has been voted by the State Douma, most probably in October. The MPs said they will depart from Bulgaria earlier, so that they could meet in Moscow with Bulgarian Prime Minister Zhan VIdenov, who is on a working visit there.

    The issue of lifting the sanctions unilaterally has not been discussed or raised by any political force in Bulgaria, Nikolai Kamov said. According to Assen Agov, all humanitarian issues, concerning former Yugoslavia, should be considered in the framework of a general agreement, approved by the U.N.. In his view any unilateral initiatives to that end will be against the country's national interests. The two chairmen emphasized that the Foreign Policy Committee and the National Assembly will discuss the proposals of the Russian MPs. Nikolai Kamov later told reporters, that the National Assembly may discuss the humanitarian aspect of the proposal. "I do not see any opportunity for Bulgaria to oppose unilaterally the sanctions or to stop enforcing them," the Chairman of the Foreign Policy Committee said.


    Todor Vulchev, Governor of the Bulgarian National Bank (BNB), and his Turkish counterpart Yaman Torunel signed a cooperation protocol here today. Yaman Torunel was received by President Zhelyu Zhelev and met with First Deputy Foreign Minister Stefan Staikov, Deputy Prime Minister Roumen Gechev and Finance Minister Dimiter Kostov. "We discussed ways of further improving the good relations between the two countries' business communities," Yaman Torunel said after his conversation with President Zhelev. In 1996 the Central Bank of the Republic of Turkey will provide on-the-job training for twenty Bulgarian bank clerks, BNB Governor Todor Vulchev said. So far the Bank has provided technical assistance to Bulgaria on several occasions, he added. In his view, the future cooperation will be very useful because the Turkish Central Bank is one of the largest in the region and in the world and has a highly developed foreign exchange market. Furthermore, Istanbul is one of the biggest gold markets, Vulchev said. At his meeting with Deputy Prime Minister Roumen Gechev Yaman Torunel pledged to talk to Turkish bankers on his return to Istanbul. He is optimistic about the prospects of opening branches and representations of Turkish banks in Bulgaria.


    The joint venture between Banque Nationale de Paris, Dresdner Bank and the European Bank for Reconstruction and Development officially opened a representation office in Bulgaria today. According to Deputy Chairman of B.N.P. governing board Jacques Henri Val, the fact that the banks open a branch with full banking license in Bulgaria is a manifestation of the confidence in the progress of the Bulgarian economy, which, in the conditions of reduced domestic market, significant foreign debt, broken trade contacts and losses sustained from the Yugoembargo, is pursuing a brave policy of transition to a market economy. According to Mr. Val, by opening the branch, the banks contribute for the strengthening of stability in the Balkans. B.N.P. - Dresdner Bank (Bulgaria) Inc. received a full banking license on November 14, 1994 and was put on the commercial register as a joint stock company with a capital of 500 million leva, distributed among BNP - 40 per cent, Dresdner Bank - 40 per cent and the EBRD - 20 per cent. By January 31, 1996 the bank will increase its capital to 800 million leva. It will be specialized in financing international transactions and will select its customers depending on their participation in the foreign trade. The bank's representatives met today with Bulgarian President Zhelyu Zhelev and familiarized him with their intentions in Bulgaria: to invest in privatization, to grant loans to big French and German potential investors in Bulgaria, to offer credits to Bulgarian companies, that work with France and Germany. Mr. Zhelev said that Bulgaria welcomes foreign investment.


    Sofia, September 18 - "Douma" runs an interview with Deputy Prime Minister Roumen Gechev headlined "Foes of Mass Privatization to Be Disappointed". Government preparations for mass privatization are progressing according to a schedule announced seven months ago, says Gechev. According to him, work is underway on several draft lists of companies to be privatized; the cabinet held one preliminary discussion of them. "I would like to assure the readers of "Douma" that we would move a draft which is in the interest of Bulgarian citizens and the companies themselves," Gechev emphasized. According to him, registration of vouchers will begin in November and the centralized transfer of property will start three months later. Firms in all sectors of the national economy will be moved for mass privatization, excluding strategically sensitive companies. A month or two ago the governing board of a major state-owned bank moved a project for partial privatization in this way. "I can see no harm in privatizing a small share (10 or 20%) of the bank," Gechev says. According to the deputy prime minister, cash privatization is progressing at twice the pace of 1994. "Yet achievements so far are far behind our ambitious program for the privatization of 584 state firms in 1995," Gechev says.

    The Bulgarian Telecommunications Company will ask the cabinet to raise the prices of long-distance and international calls by 40%, "24 Chassa" quotes the chief of the company Mihail Danov as saying. This is the only way to raise external loans, "24 Chassa" says. According to the paper, foreign banks would only commit loans if the company becomes self-financed. According to Danov, this is hardly possible at the present price levels. "24 Chassa" recalls last week Danov promised not to raise the price of trunk calls. The telecommunications organization arranged a $30 million loan with the World Bank. Another ECU 32 million is expected from the European Bank for Reconstruction and Development and ECU 70 million from the European Investment Bank, "24 Chassa" writes.

    "Troud" runs an article by Krustyo Petkov, leader of the Confederation of Independent Trade Unions, headlined "Inflation Boomerang Returns, New Decisions Expected". According to Petkov, following four years of reform, Bulgaria is lagging behind the other new democracies, including Albania and Romania, with only Russia trailing. "Inflation proved a hard nut to crack for three governments, with Bulgaria breaking the Eastern European record with 121.9% inflation in 1994," Petkov writes. He gives an ironic list of government measures to fight inflation: manipulation of statistics, strong price controls, price dumping with low-quality

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