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News from Bulgaria / May 10, 96

From: (Embassy of Bulgaria)

Bulgarian Telegraph Agency Directory



10 May, 1996








  • [07] PETROL





    Sofia, May 9 (BTA) - "The 9th of May is a day of hope, peace, prosperity, security and a chance to share the traditional European values," President Zhelyu Zhelev said in his address on Europe Day, May 9, broadcast on national media this evening. Zhelev expressed his confidence in the success of the European orientation of Bulgaria and the revival of the country's relations with the world.

    According to the President, the European-style structuring of Bulgaria requires the continuous efforts of the Bulgarian nation, governments and parliaments, given that none of the governments establishes a monopoly over these processes. "On the road to its European future Bulgaria has to cope with the existing crime and corruption, economic chaos and the attempts to instill hatred," Zhelev stated.


    Sofia, May 9 (BTA) - The Government today approved a strategy for development of farming and food-processing in Bulgaria until the year 2000. Under the strategy, agriculture and food-processing are to be modernized, production intensified and performance approximated to or equalized with that of the European Union, prices of agricultural products stabilized, living standards improved and working conditions in the countryside improved. The strategy also includes land reform, accelerated privatization in agriculture and food-processing, and restitution of farm land ownership. The owners of 55 per cent of agricultural land have so far taken possession, but 70 per cent of the land is still used on a short-term and temporary basis.

    The Government approved new Social Assistance Regulations. The 1992 version of the Regulations has showed a number of flaws, writes the proposer of the draft, Labour and Social Affairs Minister Mincho Koralski. The new Regulations assert possibilities to increase the guaranteed minimum income as far as the state of finances of a particular municipality allows it, liberalize entitlement criteria, introduce extra welfare benefits for the acquisition, preservation and maintenance of housing, and regulate the rights to social assistance of orphans, disabled persons, refugees, former prison inmates etc.

    The Government approved a proposal of the Privatization Agency to initiate a procedure for privatization of a 25 per cent stake in the Bulgarian Telecommunications Company Ltd. The cabinet members assigned the Head of the Concessions Office of the Council of Ministers to draft a decision on the granting of a concession for the Bulgarian Telecommunications Company.

    The ministers specified today the positions of the Bulgarian delegation to the Review Conference on the Treaty on Conventional Armed Forces in Europe which will be held in Vienna on May 15 and 31 and will be chaired by the Netherlands. The Bulgarian delegation will be headed by Ivo Petrov, Bulgaria's Permanent Representative to the United Nations Office at Vienna and for OSCE Negotiations and Fora.

    The Government approved a report on the building of protected communications between NATO's leadership and the state leadership of Bulgaria. In October 1995 the political and military council on the Partnership for Peace (PFP) programme suggested to the partner states to build protected telephone communications with the NATO leadership, to be used at top political and military level. The equipment for these communications will be in compliance with NATO's standards and will be supplied free of charge. The same kind of link with NATO's headquarters will be established by all capitals of the PFP members.

    The Cabinet gave its consent for conduct of elections for president of the Russian Federation on the premises of the Russian Embassy in Sofia and the consulates of the Russian Federation in the country on July 16. The decision is in connection with a note dated April 3.

    The composition of the Bulgarian delegation to attend the celebrations on the Day of Slav Letters and Preceptors Sts Cyril and Methodius in Rome was specified today. The delegation will be headed by Education Minister Ilcho Dimitrov.

    The ministers approved the Bulgarian position for the forthcoming session of the mixed Bulgarian-Turkish commission on transport, to be held in Ankara on May 16 During this visit Bulgaria will suggest to Turkey to sign a new convention on the servicing of the border railway station Kapikule, which will replace a 1971 convention between the two states.

    The Cabinet decided to send on behalf of Bulgaria's Prime Minister Zhan Videnov an address to the Russian Prime Minister on the preparation of a draft agreement for cooperation in the reconstruction and modernization of the N-plant in Kozlodoui (on the Danube). The procedure for the negotiations is to be specified at a later stage.


    Sofia, May 9 (BTA) - I believe that the Government and the National Bank of Bulgaria (BNB, the central bank) are taking decisive measures to stabilize the foreign exchange market, IMF Mission Leader for Bulgaria Anne McGuirk said after her meeting with Prime Minister Zhan Videnov today. The current situation of the banking system was described as most delicate and quite difficult, the news release of the Government's press office says.

    Mrs McGuirk said she is optimistic about the goals which the IMF's mission has set itself and will seek to achieve within the next two weeks. In her view the problems of the structural reform in the country are the most decisive ones and the Government needs courage in the application of measures for liquidating the losing enterprises.

    Asked if an agreement between the IMF and Bulgaria may be expected, Mrs McGuirk said that at today's meetings with BNB Governor Lyubomir Filipov and Prime Minister Videnov the key topics to be discussed at the talks have been identified. Stabilization of the banking system and restructuring of the real economy sector are at the basis of a future agreement with the Fund, Anne McGuirk pointed out.

    Until recently I was 70 per cent confident that we shall sign an agreement with the IMF, but today I am already 90 per cent confident, Mr Filipov said.


    Sofia, May 9 (BTA) - The Governing Board of the central National Bank of Bulgaria (BNB) this afternoon decided to set the base interest rate at 108 per cent p.a., effective Friday, May 10. The bank unveiled intentions to intervene in the forex market in support of the lev which has dived against the dollar in recent weeks. The central bank also raised to 20 per cent the interest it is paying commercial banks on the current accounts which they hold with it. The minimum reserve assets which commercial banks are required to deposit with BNB were set at 10 per cent of their eligible liabilities, up from 8.5 per cent before. The BNB Governing Board also decided that the central bank's Banking Supervision Department conduct inspections of the foreign-exchange transactions of commercial banks and finance and brokerage houses which deal actively on the currency market. So far the BNB has looked on as the lev depreciated by more than 100 per cent against the dollar in the last couple of weeks. "Yesterday's central rate of the lev against the dollar, which the BNB set at 103 leva, is sufficient to encourage exports but definitely impedes imports," Mr Filipov noted today. If banks tend to decapitalize further, BNB will be forced to keep resorting to extreme remedies like today's, Governor Filipov added. BNB hopes for the start of a process of recapitalization of the banks, which will improve their liquidity and therefore stabilize the market. The central bank will wait to see the effect of the move taken today and will determine its foreign-exchange policy in a month's time. The exchange rate can be brought under control within a month or two, Finance Minister Dimiter Kostov told reporters today. He cited among his arguments the forthcoming signing of an agreement with the International Monetary Fund. Long queues of people wishing to withdraw their forex savings formed in front of most banks in Sofia today. The Chief Executive Director of Bulbank Chavdar Kantchev appeared on National Television, calling on depositors to have greater confidence in the largest Bulgarian banks. He said that all Bulbank customers can withdraw their forex deposits without notice. For Friday, May 10, BNB set a central rate of 122.56 leva/1 US dollar, nearly 10 leva up from today's rate.


    Sofia, May 9 (BTA) - On Friday Parliament is expected to take a vote on a personnel change in the Government of the Democratic Left, the second such replacement since it went into office in January 1995. At the beginning of this week Prime Minister Zhan Videnov formally submitted to Parliament a motion to replace Interior Minister Lyubomir Nachev by the incumbent Chairman of the National Assembly Committee on National Security Nikolai Dobrev MP of the Socialist Party. Mr Nachev's resignation was prompted by a tragic incident last Friday, in which unidentified gunmen shot and killed three policemen when they tried to arrest them. The cabinet change initiated by the Prime Minister comes at a time when the Government and its policy is drawing fierce fire from the parliamentary opposition, the trade unions, President Zhelyu Zhelev and quarters within the ruling Socialist Party itself. The Government is blamed for its failure to cope with rampant crime, for its handling of the economy and the delay of structural adjustment which has plunged the banking system into a deep crisis, and for its social policy. Local politicians and analysts believe that the vote on a new interior minister will open the way to further cabinet changes. Leaders of the reformist Alliance for Social Democracy (ASD) within the Socialist Party said that the country is facing a deep crisis and that the BSP leadership is confused and now behaves like "an investor in a collapsing Ponzi scheme."

    The opposition Union of Democratic Forces (UDF), Popular Union and Movement for Rights and Freedoms (MRF) said that they will take part in the vote on the personnel changes in the cabinet only provided that Mr Nachev's resignation and Mr Dobrev's election are put to separate votes. "We are in favour of Nachev's resignation but do not think that whoever succeeds him will cope with the problems of crime as long as the Left is in power," said UDF Floor Leader Yordan Sokolov. "This time we have decided to act as a united opposition," Mrs Guylbie Redjep MP of the MRF told BTA. George Ganchev, leader of the Bulgarian Business Bloc (BBB) which so far has been supporting the Socialists, said yesterday that he will press for a BBB nominee for the interior portfolio and threatened to bring about early parliamentary elections.


    Sofia, May 9 (BTA) - Parliament today passed the Municipal Property Act. It is the first Bulgarian law regulating this type of property. Together with the law on state property passed yesterday, and the effective amendments to the Property Act, it forms a package of laws regulating property relations. The law regulates the acquisition and management of, and disposal with movable and immovable municipal property. The distinction among public, private and municipal property is defined by the Constitution.

    A special chapter in the law regulates the management of immovables - private municipal property - including its sale, exchange, partitioning and conceding limited real rights. The law also provides for the forcible expropriation of private property for municipal needs. It shall apply only in cases when these needs cannot be otherwise met, and after fair compensation has been ensured in advance.

    [07] PETROL

    Petrol prices will go further up because of the jump of the dollar against the lev. In 1995 they remained almost unchanged due to the stable dollar-lev exchange rate, says Bedo Doganyan, Executive Director of the Petrol company, in "24 Chassa". Fuels will continue to be monitored by the government for at least ten more years in view of the low living standards. The company, worth at least 6,000 million leva, has 450 petrol stations and a 37 per cent market share. The last two years were successful for Petrol, says Doganyan, adding that the company reaped a handsome profit in 1994 thanks to exports. While Greece's embargo against Macedonia was in force, all exports to the latter were handled by Petrol. The company made a killing by selling 120 petrol stations and warehouses for 440 million leva, Doganyan says. Now it has directed its efforts to a reform in the management of petrol stations. One hundred facilities will be franchised this year and all the rest in 1997.


    Sofia, May 9 (BTA) - New space technologies, armaments for the landed forces and telecoms systems will be the highlights in the Hemus'96 international exhibition on defence technologies and equipment to open in Plovdiv, Southern Bulgaria, on May 28, Deputy Defence Minister Boris Radev said at the exhibition's opening. Participating will be 74 Bulgarian and 52 foreign companies, including US, Russian, Belorussian, Ukrainian, German, Chinese, Swiss, Swedish, Polish, Romanian and Slovenian ones.

    The number of Bulgarian exhibitors have grown 51% since the first issue of the arms exhibition in 1994, while the share of foreign companies have quadrupled and the exhibition area they will use more than tripled, said Radev. The third Hemus issue will show it has become a traditional event and made itself a name as a venue for trade in special products, he said. The exhibition is open for new participants, said the Deputy Defence Minister who is also one of the members of the Organizing Committee. A scientific seminar on different types of combat equipment, presentations and cultural events will accompany the schedule of the exhibition.

    The foreign guests to the exhibition, including all military attaches based in Sofia, will see a demonstration of the broad capacities of the Zmeevo, Southern Bulgaria, artillery ground. It meets fully the international standards and offers producers certification of all types of fire arms for a charge, said Radev. In the conditions of strong competition Bulgaria has a capacity to struggle for this market with its fields. One near Shabla, on the Black Sea, is already being used by Greek partners.

    Bulgaria will show at the exhibition state-of-the-art space aparata, anti-aircraft systems, a new AK rifle with a grenade launcher, small-sized, but powerful radio-systems, multipurpose landing gear and automobiles. Three types of upgraded armoured personnel carriers with KAMAZ diesel engines will also be displayed.

    Bulgarian companies will participate with fastening facilities for the aviation (for the installation of missiles and other equipment in aircraft). As most interesting samples of the Bulgarian production, Deputy Minister Radev pointed two Bulgarian model planes: training and unmanned (suitable for air-target).

    The Souhoi Russian design company will show training aircraft and its latest design, the Su-39 fighter, Radev stated. The exhibition will be attended by members of the Bulgarian-Russian Commission on Scientific, Technical and Industrial Cooperation, who will hold a session at the same time.


    The Government will suggest to the National Assembly tomorrow that 77 enterprises be dropped from the list of enterprises subject to mass privatization and 93 new be added to the list, it emerged after today's meeting of the Council of Ministers.

    The closing date for purchasing voucher books was yesterday. The sales of the books began on January 8. According to reports from the Mass Privatization Centre, about 40 per cent of the eligible persons have purchased voucher books (6,700,000 of the 8 million population of Bulgaria are eligible to participate in the voucher privatization.)

    The key motives for dropping certain enterprises from the initial list, which was announced several months ago, is their worsened financial state or their being at an advanced stage of restitution, Chairman of the Mass Privatization Centre Kalin Mitrev told a news conference today. He specified that it is small enterprises that will be removed from the list. The suggested amendments will increase the number of enterprises slated for mass privatization from 1,063 to 1,079. The new enterprises are in relatively stable financial state and clear legal status, Mr Mitrev said.

    Among the enterprises suggested for inclusion in the list are the shipyard in Varna (on the Northern Black Sea coast), which offers 25 per cent for denationalization and has 515 million leva capital, as well as the chemical works Polimeri in Devnya (Northeastern Bulgaria), which has also offered 25 per cent for privatization and has a capital of 243 million leva. The suggested amendments in the list have been coordinated with the respective ministries and departments, Mr Mitrev said.


    The lists of enterprises which will be wound up or rehabilitated are ready but will not be made public before the beginning of next week, Government Spokesman Nikola Baltov told a news conference today. The two lists were approved at today's Cabinet meeting and, as Mr Baltov said, will be on the agenda of the current negotiations in Sofia with the international financial institutions. The closures will not increase appreciably the unemployment rate, Labour and Social Affairs Minister Mincho Koralski said. He specified that the 28,000 people who will be made redundant represent less than 1 per cent of the country's labour force. Mr Koralski also said that the liquidation list includes enterprises with financial and production underperformance in 1995. Their liquidation will not wipe them off Bulgaria's economic map. They have self-contained parts which could start independent existence after the liquidation, the Minister said. The winding up process must start immediately and may take between two and seven months. The Government's top priority is to guarantee that the workers in the enterprises earmarked for closure are compensated. Mr Koralski said that these enterprises owe their workers 3,000 million leva. The Minister also indicated that society and the economy are losing some 48,000 million leva annually from the inefficient enterprises which eat up the funds that could be invested in the private sector or spent on an adequate social policy. He said that a programme will be worked out for employment of the redundant manpower in the implementation of infrastructural and cross-border projects. The Government is planning to set up a fund for lending and assistance to small- and medium-sized businesses. "We expect financial support from the international financial institutions for this project, but even without it we will implement it," Mr Koralski said.
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