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News from Bulgaria / May 13, 96

From: bulgaria@access1.digex.net (Embassy of Bulgaria)

Bulgarian Telegraph Agency Directory

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

13 May, 1996


CONTENTS

  • [01] IMF APPROVES PROGRAMME OF BULGARIAN GOVERNMENT

  • [02] P.M. VIDENOV: GOVERNMENT LAUNCHES A RADICAL STUCTURAL REFORMS PLAN

  • [03] PARLIAMENT ELECTS NIKOLAI DOBREV INTERIOR MINISTER

  • [04] N.DOBREV, NEW INTERIOR MINISTER OUTLINES PRIORITIES

  • [05] EX-P.M. BRUISED, WIFE IN HOSPITAL AFTER CAR CRASH

  • [06] INTERNATIONAL PLOVDIV FAIR ENDS

  • [07] MEDICAL SUPPLIES TO GO ON DISPLAY IN SOFIA

  • [08] JANUARY-APRIL INFLATION FETCHES 9.1%

  • [09] BULGARIAN MILITARY DELEGATION ENDS VISIT TO BELGRADE

  • [10] GERMANY: NUMBER ONE INVESTOR IN BULGARIA

  • [11] FOREX MARKET SETTLED IN WAKE OF BASE INTEREST HIKE

  • [12] SOCIALISTS DISCUSS CONCEPT FOR ECONOMIC REFORM

  • [13] SOFIA SOCIALISTS WANT THEIR LEADER TO RESIGN

  • [14] P.M., CABINET GET POLITICAL SUPPORT FOR STRUCTURAL REFORM


  • [01] IMF APPROVES PROGRAMME OF BULGARIAN GOVERNMENT

    Sofia, May 10 (BTA) - Deputy Prime Minister and Minister of Economic Development Roumen Gechev met today IMF Mission Leader for Bulgaria Anne McGuirk. The meeting was also attended by Finance Minister Dimiter Kostov, Labour and Social Affairs Minister Mincho Koralski and the resident representatives of the World Bank and the IMF in Bulgaria - Alberto Musalem and Franek Rozwadowski, the government press office said.

    The talks were part of a series of meetings between an economic government team and the IMF. Following the concrete steps taken by the Bulgarian government and their meeting with Prime Minister Zhan Videnov, the IMF representatives are convinced that the signing of an agreement with Bulgaria is forthcoming.

    The steps taken by the government and the implementation of its decisions will speed up the official announcement of the preparations for its signing. There are no contradictions between the Bulgarian government and the IMF. The talks are specifying details such as the size of compensations, the legislative environment in which the Government would realize these steps and the terms within which Parliament can pass the respective amendments, if necessary. At the meeting it was pointed out once again that the international financial institutions fully accept the government's programme.

    [02] P.M. VIDENOV: GOVERNMENT LAUNCHES A RADICAL STUCTURAL REFORMS PLAN

    Sofia, May 10 (Evgeniya Droumeva of BTA) - This morning, before asking Parliament to take a vote on a motion for cabinet changes, Prime Minister Zhan Videnov made an unannounced statement and said that the Government, together with the National Bank of Bulgaria (BNB, the central bank), would launch a radical structural reform plan for the country in 1996, drawn up jointly with the international financial institutions. There is no alternative to these changes, Videnov stated and asked Parliament to support "the joint efforts of the Government and the BNB in the most difficult and crucial year of transition" to achieve financial and political stability in the country.

    "In the past few days the economic and financial situation in the country caused growing public concern. The situation is alarming indeed," Prime Minister Videnov said. In his words, the Government is well aware of the causes of this situation and the possible consequences in case of further deterioration. Videnov warned that there is a real "threat of persisting and excessively grave financial destabilization related to both domestic and external issues". The opposition MPs booed and hissed his statement that these were similar to the financial crisis that shook most of the former socialist countries in the last couple of years.

    Videnov set out the main points of the structural reform plan. The Government firmly supports the BNB's efforts to stabilize the lev and will back them by bold measures to increase the country's hard currency revenues by promoting exports, speeding up major privatization deals and attracting investment, Videnov stated. He said that Parliament could help a lot by rapidly adopting the 1996 Privatization Programme, the Privatization Act amendments and tax relief for privatized enterprises and foreign investors.

    The Government is ready to join the BNB in guaranteeing deposits in commercial banks, the Prime Minister said and expressed officially the Cabinet's readiness to take further direct legal commitments to guarantee the savings of the public. The enactment of a very concise and unambiguous law on securities guaranteeing bank deposits along with amendments to the Banks and Lending Act will enable the BNB to implement decisive measures for banking rehabilitation, and the Government to guarantee deposits in ailing banks, Videnov said.

    He informed the MPs that the Government had already launched a large-scale campaign to cut down losses in the real sector. In the coming months this will substantially stabilize the banking system, re- establish confidence in the Bulgarian lev and bring the country much closer to a more adequate economic structure, Videnov believes.

    The Cabinet expects to conclude agreements with the international financial institutions in July which, as Videnov said, will "strengthen the country's financial stability, normalize its international foreign exchange and financial relations", and allow Bulgaria to use the advantages of its balanced Balkan policy and its consistent policy of integration in united Europe. To achieve this, the joint efforts of the Government and the BNB must be supported, Videnov said. "We count on the common sense, genuine patriotism and proven sense of responsibility of the millions of Bulgarians who live with shortages but create wealth and retain their presence of mind, realism and sense of proportion," Videnov said.

    [03] PARLIAMENT ELECTS NIKOLAI DOBREV INTERIOR MINISTER

    Sofia, May 10 (Iva Toncheva of BTA) - Nikolai Dobrev, 48, a licensed mining engineer, member of the policy-making Executive Bureau of the ruling Bulgarian Socialist Party (BSP) and so far Chairman of the National Assembly Committee on National Security, was elected Minister of the Interior by Parliament today Minister of the Interior. One hundred and twenty-four out of a total of 240 MPs voted to accept the resignation of Lyubomir Nachev and to elect Mr Dobrev to succeed him as interior minister. This is the second personnel change in Zhan Videnov's Socialist Government since it took office sixteen months ago. The ministers of trade and agriculture were replaced in January. The vote was taken by secret ballot, and only the MPs of the Socialist-led Democratic Left and part of the MPs of the Bulgarian Business Bloc (BBB) took part in the voting. The opposition Union of Democratic Forces (UDF), Popular Union, ethnic Turks' Movement for Rights and Freedoms (MRF), part of the BBB and the independents did not vote in protest over the lack of a debate on Mr Nachev's resignation and on the plans of his successor concerning the crack-down on rampant crime. The opposition also objected to the single vote taken on Mr Nachev's resignation and Mr Dobrev's election. Lyubomir Nachev resigned at the end of last week after three policemen were shot and killed by still unidentified gunmen when the former tried to arrest them in a Sofia suburb. Presenting today his motion for a cabinet change, Prime Minister Zhan Videnov said that Mr Nachev assumed responsibility for the incident, as well as for rising skepticism about the authorities' capability to cope with crime. "We don't think that Nachev alone is to blame for the present state of affairs, the Government is helpless to control crime," said UDF Floor Leader Yordan Sokolov. He stressed that not only the interior minister but the whole Government, the parliamentary majority and its present policy must be replaced. The leader of the Bulgarian Agrarian National Union Anastasia Moser warned about merging of party and state. She resented the fact that a top Socialist Party functionary was elected Minister of the Interior. "The real problem is the crazy populist programme which swept the BSP into power. I hope the Bulgarian people realizes this and that we are in the run-up to early parliamentary elections," Mrs Moser said. Mr Georgi Dilkov MP of the BBB demanded that Mr Dobrev commit himself to crime control before his election. The Movement for Rights and Freedoms stood out of the vote, arguing that it did not vote into office the incumbent Cabinet, either. "We expected the whole Government to resign, not just the interior minister," said MRF Deputy Floor Leader Gyuner Tahir.

    [04] N.DOBREV, NEW INTERIOR MINISTER OUTLINES PRIORITIES

    Sofia, May 10 (Ani Parmaksizian of BTA) - Bulgaria's new Interior Minister Nikolai Dobrev, 48, outlined his three priorities speaking to the press after his election by secret ballot today. He is the ninth minister of the interior since the beginning of democratic changes in 1989.

    His top priority will be to turn the combating of crime from a formal into an actual priority of the Left. "I will insist that these problems be put more often on the agenda of both Parliament and the executive," said Socialist MP Dobrev. He chairs the Parliamentary Committee on National Security.

    Dobrev was born in Gotse Delchev (Southwestern Bulgaria). He is a graduate of Sofia's Institute of Mining and Geology and has worked as an engineer at a laboratory for nuclear geophysics and geochemistry. He is married with two children. He extends a hand to the investigative authorities and the prosecutor's office. "I believe crime control is such a demanding task that ideological and other differences should not stand in the way of pooling the efforts of these important institutions and the Interior Ministry," he said.

    The newly elected minister said he would "ask for support all political forces, both the partners and the opponents of the Left". "I would be glad to hear expert opinions from the [opposition] Union of Democratic Forces, Movement for Rights and Freedoms and Bulgarian Business Bloc. I will put to good use anything that would help to combat crime," Dobrev told the press.

    Nikolai Dobrev elaborated on his tasks within the Interior Ministry. "The principles on which the Ministry is based should be reinstated and put to work," he said. One of them is the principle of statehood because "the Ministry works only for the state and cannot work for economic groups, political forces and individuals".

    Restoring the technology of operative work, the most important component of the Ministry's job, and adopting a new operative policy geared to the structure and characteristics of crime are the Ministry's second priority.

    The third priority is strengthening the rule of law, which Dobrev summed up as "the firm hand at the roots of the system, no extrajudicial measures, no strong-arm tactics, nothing extraordinary". "When you are trying to cure the diseases of society, you must be healthy," Dobrev said, stressing that the firm hand will be felt mostly at the Ministry, above all by those who are ill with corruption, inactivity and lack of professionalism".

    Dobrev was nominated for the portfolio of the interior by Videnov last Saturday after Lyubomir Nachev resigned over the shooting of three policemen in a Sofia suburb the previous day.

    [05] EX-P.M. BRUISED, WIFE IN HOSPITAL AFTER CAR CRASH

    Sofia, May 10 (BTA) - Former prime minister and leader of the opposition Union of Democratic Forces Filip Dimitrov had a car accident on the Trakiya highway near Ihtiman, Southern Bulgaria, last night, said traffic control authorities. Dimitrov was bruised, but his wife, Elena Dimitrova and US citizen Azamy Rosehold, who were also in the car, were seriously injured and are now in Sofia's Pirogov emergency hospital out of life danger. Driving his Ford Escort, Dimitrov though something leaped in front of the car and to avoid it he crashed into the crash barrier.

    [06] INTERNATIONAL PLOVDIV FAIR ENDS

    Plovdiv, May 10 (BTA) - 59 exhibitors - 41 Bulgarian and 18 foreign - received gold medals today in the last day of the Plovdiv, Southern Bulgaria, Spring Fair. It is encouraging that of the 800 Bulgarian companies that participated in the Fair 550 were manufacturers, Minister of Trade and Foreign Economic Cooperation Atanas Paparizov told a closing news conference.

    A quarter of the Bulgarian participants have already invested in the Bulgarian economy, or are planning to do so, according to the findings of Gallup International pollsters. The light industry, infrastructure and agriculture seem to be their first choice. Trade and services come only after that which indicates that the tendency to seeking quick profit has already been reversed. A quarter of exhibitors signed contracts at the Fair in spite of the skyrocketing US dollar. Another 20% reported they have come to the stage of preliminary arrangements.

    [07] MEDICAL SUPPLIES TO GO ON DISPLAY IN SOFIA

    More than 650 companies of 27 countries will enter the specialized exhibition of medical equipment and consumables "Sofia '96," which will be held in Sofia between 14 and 17, 1996, writes "Douma." For lack of a sufficiently large hall the display will be divided between three sports complexes in the capital city. Apart from medical and dental equipment, the exhibition will feature new medicines, laboratory, measuring and analytical devices, computer hardware and other high-tech products, said Ivan Ivanov, Manager of the Bulgarreklama Agency which traditionally organizes the event. Most exhibitors will come from Germany, Switzerland and the US, writes "Douma." Bulgaria will be represented by 165 manufacturers and distributors of medicines and medical equipment.

    [08] JANUARY-APRIL INFLATION FETCHES 9.1%

    Sofia, May 10 (BTA) - The National Statistical Institute reported a 2.9% inflation in March-April and 9.1% in January-April. Foods rose 7.1% from January, alcohol 12.8%, tobacco products 3%, housing 11.2%, energy for household consumption 17.1%, furniture 6.7%, footwear and clothes 5.8%, health services 9.5%, education and leisure time services, public transport and communications 20.5%.

    Consumer prices went tangibly up in April including 1.8% for foods, 2.8% for nonfoods, 7.7% for services and 1.8% for catering services. A more dramatic rise was identified in the prices of electricity (18%), vegetable juices and baby food (18%), central heating and hot water (17.6%), citrus fruit (16.3%), coal and briquettes (14.8%).

    January-April saw prices dropping for pork (10.3%), cooked sausages (5.1%), minced meat (3.6%), legumes (3.1%) and mutton (2.2%), among other. The price of several goods and services went slightly down in April.

    [09] BULGARIAN MILITARY DELEGATION ENDS VISIT TO BELGRADE

    Belgrade, May 10 (BTA corr. L. Mitakiev) - The three-day official visit of a Bulgarian military delegation to the FR of Yugoslavia ended with the signing of a Plan for Cooperation between the general staffs of the two armies. The Bulgarian delegation was headed by Chief of General Staff Colonel General Tsvetan Totomirov. The Plan provides for establishing contacts between the Third Army of the FR of Yugoslavia and First Bulgarian Army aimed at ensuring security along the common border, Yugoslav Chief of General Staff Colonel General Momcilo Peresic told BTA and Serbian Television.

    The plan specifies the Agreement for Cooperation signed recently between the defence ministries of the two countries. Bulgaria has signed similar plans with all Balkan countries. "It is our duty to enhance cooperation between the two neighbouring armies in the interest of the two peoples and peace and security in the region," General Totomirov said.

    [10] GERMANY: NUMBER ONE INVESTOR IN BULGARIA

    Sofia, May 10 (BTA) - Germany is the number one investor in Bulgaria, with 38 per cent of total investment. This is not enough, however, compared to Germany's potential and the investment opportunities offered by Bulgaria, said Deputy Minister of Trade and Foreign Economic Cooperation Borislav Georgiev. He spoke at a seminar on "Five Years of Cooperation between Bulgaria and Unified Germany" held in Sofia today. German investment in Bulgaria totalled 850 million dollars in the past five years, said Mitko Vassilev, head of the German economic representation in Sofia. In 1995 Germany invested 2,000 million dollars in the Czech Republic and Hungary, he said.

    The seminar heard the findings of a German study on the barriers for investors in Bulgaria. The most serious barrier German companies face here is the condition of the market, followed by legal gaps, red tape, crime, inflation and the high taxes and fees.

    Germany is the third biggest buyer of Bulgarian-made goods and the second major importer in Bulgaria. Last year this country exported to Germany DM 436 million worth of goods and imported German goods worth DM 671 million, said Georgiev. A total of 55 Bulgarian- German partnerships have been registered here by end-1995; 60 German companies opened affiliates in Bulgaria, 169 offices and 183 Bulgarian distributors.

    [11] FOREX MARKET SETTLED IN WAKE OF BASE INTEREST HIKE

    Sofia, May 10 (Alexander Kirov of BTA) - The May 9, 1996 decision of the National Bank of Bulgaria (BNB) to raise the base interest rate to 108 per cent p.a. will calm the currency market but, on the other hand, will ruin the country's economy, Post Bank forex dealer Ivailo Bouyukliev told this reporter. In his view, the extreme measure taken by the central bank will stabilize the exchange rate of the lev against the dollar and it will fluctuate between 95 and 115 leva next week. The 41 per cent hike of the base rate is a temporary measure, BNB must lower the base interest very soon, Mr Bouyukliev emphasized.

    The present exchange rate is the result not of the Bulgarians' lack of confidence in the lev but of their lack of confidence in the banks Trade and Foreign Economic Relations Minister Atanas Paparizov told a news conference in Plovdiv (Central Bulgaria). He said there was no danger of hyperinflation because the government was ready with measures for resolving the crisis which will be announced on Monday, May 13, Paparizov said.

    Even today, the dollar rate quoted by the foreign-exchange offices has steadied between 100 and 101 leva buying and between 107 and 115 leva selling, which is below the central rate set by the BNB at 122.56 leva for today, dealers commented. In their view, after yesterday's decision of the central bank conditions for effective deals already exist but actual trading is slack. This applies to the cash market as well, where the dollar is quoted within reasonable limits, but no major deals are made, commented dealers of the Sofia-based Amigos and Bromak finance and brokerage houses. They believe that the market makers are temporizing. Holders of long dollar positions are recommended to square them off because they are getting ever more expensive to keep as a result of the dramatic increase of the difference between the interest paid on lev and on dollar deposits after yesterday's hike of the base interest rate.

    The forex market is expected to be steady next week, according to dealers of several major banks. They assume that BNB will probably try to keep the rate at under 100 leva/dollar, but the US currency will go on strengthening smoothly.

    A total of 13 million US dollars were bought and 11 million dollars were sold on the interbank market today. The central exchange rate for Monday is 108.09 leva/USD 1, which is 14.47 leva down from today's central exchange rate.

    [12] SOCIALISTS DISCUSS CONCEPT FOR ECONOMIC REFORM

    Sofia, May 10 (BTA) -The Executive Bureau of the Supreme Council of the ruling Bulgarian Socialist Party today heard reports on the state of the economy, the causes of the crisis, and measures for economic rehabilitation. The Socialist leaders reviewed the final version of a concept for structural reform of the economy, which will probably be discussed at a party plenum Sunday.

    The Government is considering a special programme for reducing the social cost of reform and creating a favourable climate for foreign investment, the media learnt after the meeting.

    Among reasons for feet-dragging on reform, the Socialists named the premature lifting of government controls, and the sharp change in forex and lending rules, back in 1991, Nikola Koichev, Chairman of Parliament's Economic Committee, said.

    [13] SOFIA SOCIALISTS WANT THEIR LEADER TO RESIGN

    Sofia, May 11 (BTA) - The problems of the governance, the financial and economic situation in the country, the recruiting policy, the political and organization shape of the party and absence of dialogue within it were discussed in a critical spirit at the sixth annual conference of Sofia Socialists. The forum was attended by Prime Minister and leader of the Bulgarian Socialist Party (BSP) Zhan Videnov. Sofia Socialist leader Alexander Marinov came under fire with delegates to the forum demanding his resignation. Marinov attacked his opponents saying their demands are too vague. He refused to step down, leaving the delegates to make their choice.

    Addressing the forum, Videnov said the Socialists should seek victory in the presidential elections, rather than in infighting. "The personalities are known, the BSP Supreme Council [the top leadership] has the capacity to accomplish this goal," said he. He believes noone has the right to jeopardize the victory because of personal, group or intra-party interests. The findings of a poll on the favourites for presidential nomination, covering Sofia's BSP clubs shows that among the most likely Socialist candidates for the presidential office are Foreign Minister Georgi Pirinski, former BSP leader Alexander Lilov and National Assembly Chairman Blagovest Sendov.

    [14] P.M., CABINET GET POLITICAL SUPPORT FOR STRUCTURAL REFORM

    Sofia, May 12 (BTA) - Prime Minister Zhan Videnov and the government today received the support of the top leadership of the Bulgarian Socialist Party (BSP) for the structural reform. In its plenum that continued over 10 hours today the BSP discussed the structural reform and immediate measures for the financial stabilization of the real economy and the banking sector. Among the speakers were Prime Minister Videnov, who is also leader of the Socialist party, and the head of the parliamentary Economic Committee Nikola Koichev, who was elected last night leader of the Sofia Socialists.

    Speakers at the forum stressed the need for taking urgent measures, even unpopular ones, for the structural adjustment of the economy. The forum considered a list of 65 loss-makers facing closure. Their liquidation will push the 12.5% unemployment up by some 1.1%. In the course of the debates today it emerged that some of the companies enlisted for closure can be rehabilitated. The list itself was not publicized because of fears that it might affect adversely the companies' relations with their foreign partners.

    A press release also says that a decision was taken for supporting mass and cash privatization, major infrastructure projects, the stabilization of the banking system and measures for strengthening the foreign exchange rate, including bank consolidation and guarantees for the bank deposits of the public. The BSP Supreme Council and the Socialist MPs pledged to back all action taken by the government through parliamentary and political means.

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