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News from Bulgaria, 96-07-22

Bulgarian Telegraph Agency Directory - Previous Article - Next Article

From: Embassy of Bulgaria <>



22 July, 1996




    Sofia, July 20 (Vanya Ivanova of BTA) - At its meeting in Washington D.C. yesterday, the Executive Board of the International Monetary Fund (IMF) approved a stand-by credit for Bulgaria, authorizing drawings up to the equivalent of SDR 400 million (575 million US sollars) over the next 20 months, the Government Press Office said. The loan will be drawn in eight tranches, with the first SDR 200 million becoming available before the end of this year, and SDR 80 million (125 million dollars) will come as early as next week, the Council of Ministers said in its press release.

    Since 1991, Bulgaria has made three stand-by arrangements with the IMF, to an aggregate amount of SDR 753 million (901 million US dollars). In the autumn 1994 the Fund suspended drawings under the third arrangement, and negotiations in 1995 failed to produce a fourth stand-by arrangement. The conditions set by the IMF for the conclusion of a new deal included a reform in the banking sphere , accelerated privatization, enforcement of financial discipline in state-owned enterprises, and structural adjustment in the real economy sector (closure of some loss-making state-owned enterprises and preparation of rehabilitation programmes for others).

    On May 27, 1996 representatives of the IMF and of the Government reached agreement in principle on a comprehensive programme that would be supported by a Fund arrangement. "The reason why the IMF has decided to support the government reform programme is that it sees it as a strong programme, as the programme Bulgaria needs to address the structural problems," Mr Franek Rozwadowski, IMF Resident Representative in Sofia, said in an exclusive interview for BTA on July 16. He also said that the IMF does not have any specific requirements about the way the Government will utilize the loan. "It is, though, required to continue implementing the structural and macroeconomic policies that it has decided to implement," the IMF official said, noting that the Government has shown progress in carrying out the reform in the past two or three months.

    In the real economy sector progress has been in preparing the reforms. A number of necessary measures have been taken in the banking sector as well. "The decision of the IMF Executive Board to approve a loan for Bulgaria shows that the Fund endorses the Government's programme and the action it is taking to pull the country's economy out of the crisis," Finance Minister Dimiter Kostov said on national television last night. He emphasized that technically the money from the Fund will replenish the central bank's foreign-exchange reserves and will help stabilize Bulgaria's balance of payments and the exchange rate, while servicing the external debt will be considerably facilitated. Mr Kostov also said that negotiations are under way with the World Bank, "with realistic prospects for finalization within two months, which will be a big relief for foreign debt service."

    "The IMF Executive Board said 'yes' to the Government's economic programme for restructuring of the real economy, for stabilization of the banking sector and for ensuring the necessary medium-term conditions for attainment of economic growth and active adaptation to world economic structures," Deputy Prime Minister and Minister of Economic Development Roumen Gechev said on national television this evening. Appearing in the Panorama news and views talk show, he emphasized that the arrangement also comes as an acknowledgement of Bulgaria's economic policy and its integration into the world economy. The Deputy Prime Minister explained that under the agreement with the IMF, the most important effect of measures taken in the enterprise sector and the banking sphere will be a regained confidence in the national currency, which would lead to an increase of lev and hard-currency savings deposits.


    Sofia, July 21 (BTA) - The budget deficit for the current financial year will be increased by nearly 13,000 million leva if Parliament votes in the national budget update as moved by the Government. At a six-hour extraordinary sitting today, the Cabinet approved in principle new budget parameters proposed by Finance Minister Dimiter Kostov. The new version projects central government revenue at 390,000 million leva, up from 250,000 million leva before, and expenditures at 463,000 million leva, as against 308,000 million leva before. The budget deficit is expected at 71,000 million leva, or 4.8 per cent of the nominal gross domestic product. The Finance Minister does not think that annual inflation will exceed 100 per cent. "Our main objective is to adapt the budget in a way to counter the tendency towards destabilization of the economy as a result of the banking sector crisis," Mr Kostov explained after the Cabinet meeting. After amendment of some tax laws and specification of the potential amount of tax revenue, the revenue side of the budget was increased by 140,000 million leva. The expenditure side takes into account the influence of the higher base interest rate, the Finance Minister said. The increase of expenditure is mainly due to the larger outlays for social security and wages.


    Sofia, July 19 (BTA) - "The Balkan meeting opened new important opportunities for Bulgaria carrying out active foreign policy," Bulgarian Foreign Minister Georgi Pirinski pointed out in Parliament today. In his words, the meeting of Balkan foreign ministers, held in Sofia on July 6-7, clearly showed that the thesis about Bulgaria's isolation "is absolutely false and just crumbled for everybody who wants to see the objective reality". Minister Pirinski made the above statement in reply to the attacks by former prime minister Filip Dimitrov. According to Mr Dimitrov, the meeting was a failure because Macedonia did not attend it, not all the countries were presented at the level of foreign ministers and the final document was not signed.

    Mr Pirinski explained that it had never been planned to sign the final document. The two previous Balkan meetings ended by just issuing communiques. "The level of representation depends on the participating countries," he said. Internal issues may be one of the reasons for a country's choosing a definite representation level, Mr Pirinski said, citing Turkey, which had been represented by a deputy minister. Commenting on Macedonia's refusal to attend the conference, prompted by the disputes about its name, Minister Pirinski said that Bulgaria could not but adhere to the standard diplomatic practice. "Both before and after the Sofia meeting the republic of Macedonia did attend a lot of international multilateral events under the name it is referred to in the documents of the United Nations. If I were you, I would rather ask why it was for the Sofia meeting that the Republic of Macedonia refused to comply with this practice, what are the reasons for it and whether Macedonia's is a goodwilled position or it is not so goodwilled," Minister Pirinski said in his reply to the MP. "Since the very first days of Macedonia's existence, Bulgaria has provided no ground whatsoever for such attitude," he stressed. He added that Macedonia's proposals made during the preparations for the meeting were included in the final document - the Sofia Declaration on Good-Neighbourly Relations, Stability, Security and Cooperation in the Balkans.

    Mr Pirinski, who has been Bulgaria's chief diplomat for a year and a half and the presidential candidate of the ruling Bulgarian Socialist Party, stressed in conclusion that Bulgaria had played successfully its role as the meeting's host. He said that this was a serious step along the road to the final goal of full integration in single Europe. "The meeting is a proof that Bulgaria can be the initiator of a stability policy in the Balkans," Foreign Minister Pirinski said.


    Sofia, July 19 (BTA) - Foreign policy undoubtedly provides a major resource for the modernization of the Bulgarian state and the successful implementation of the transition, as long as its potential is actually used, Bulgarian President Zhelyu Zhelev said during a traditional annual lecture before the Bulgarian Atlantic Club. The lecture was on "The Potential of Foreign Policy".

    Zhelev stated that given the present-time development of communications, Bulgaria's being located at crossroads provides great opportunities for economic development. The fact that four of the trans- European transport corridors on the lists of the European Union cross in Bulgaria, is a promising one. These are the East-West corridor linking Bourgas (on the Eastern Black Sea), Plovdiv (Southern Bulgaria), Sofia, Skopje, Tirana, Duras, and Brindisi; the North-South corridor: Istanbul, Plovdiv, Sofia, Arad, Budapest, Bratislava, Prague, Dresden, Berlin, with the branch to Sofia-Thessalonoki-Athens; the corridor linking Plovdiv, Bucharest, Chisinau, Kiev and Moscow and the water corridor Rhine- Main-Danube.

    The President stressed that Bulgaria's location offers excellent opportunities for air transport as well. As an example he cited the potential of the 20 military airports across the country, eight of which can be used by heavy-duty cargo aircraft. "We have been made such offers by U.S. companies in 1993 and 1994, but the opportunities got missed," Zhelev said.

    The President criticized the foreign policy of the Government of the ruling Bulgarian Socialist Party (BSP) for, in his view, the untapped opportunities and the danger for Bulgaria being left in an isolation. Zhelev said that Bulgaria is the only East-European country whose Government is not pressing for becoming a NATO member. According to him, "In the future structure for collective security which is now taking shape, and into which the North Atlantic Treaty will be inevitably transformed, Bulgaria is starting to look more and more like a hole in the security systemÓ. He also said also that the BSP's Government is the first Bulgarian cabinet to pursue an imbalanced policy on the Balkans and to try to revise the chief aims and priorities of Bulgaria's European policy.

    The President said that the Balkan policy of the Socialist Government is imbalanced because of the tendencies towards ideologization and preferences to similar parties in neighbour states. Zhelev stated that at the present moment Bulgaria is "turning its back to Turkey in favour of Greece". "We have always insisted on having good relations with Greece but it is impossible to disrupt the balance in Bulgaria's policy of equally good ties with its two NATO neighbours," Zhelev said.

    The President assessed the Government's initiative to hold the Balkan foreign ministers' meeting in Sofia on July 6-7 in positive terms and expressed his regret that Macedonia did not attend it. According to the head of state, Bulgaria's efforts to maintain good-neighbourly relations with the former Yugoslav Republic of Macedonia are not always reciprocated with adequate attitude; he recalled that Bulgaria was the first which recognized Macedonia's independence.

    Zhelev expressed his view that when Prime Minister Zhan Videnov's team came to power, for the first time the Government and the President failed to agree on key foreign political problems and this was the reason for creating the myth about the two foreign policies of the country: one pursued by the President and the other one by the Cabinet.

    The head of state reiterated his view that in the period of transition, a strong presidential institution would meet more adequately the country's needs. Zhelev voiced this view on national radio and television a week ago and recalled he had stated it even before the adoption of Bulgaria's new Constitution in 1991.

    "To me, today's lecture of the President alludes to a definite person - Foreign Minister Pirinski, the BSP's candidate in the October presidential elections," Elena Poptodorova, MP of the Democratic Left (the BSP-led parliamentary coalition) and member of the Atlantic Club, said commenting on the President's statements. Poptodorova said that Pirinski should be given the opportunity to answer the attacks.

    "I promise that I will invite Foreign Minister Georgi Pirinski to deliver a lecture at the Atlantic Club and state his position," Atlantic Club President Solomon Passi said at today's meeting of President Zhelev with members of the Club. "I will give the floor to the presidential candidate of the united opposition, Peter Stoyanov, too," Passi added.


    Sofia, July 19 (BTA) - The EU-Bulgaria Joint Parliamentary Committee will hold its third meeting on July 24-26 in Sofia. The forum is expected to be used for exchange of opinions among representatives of Ireland, which currently holds the EU presidency, the Bulgarian Government and the European Commission.

    Among the issues on the agenda is the progress of the EU intergovernmental conference, the political and economic situation in Bulgaria, the initiatives of the EU and Bulgaria for the stabilization of Central and Southern Europe, economic relations between Bulgaria and the EU and in particular issues concerning agriculture, textile production, industrial goods and the harmonization of Bulgarian legislation with the European laws, the social situation and the development of the civil society in Bulgaria, as well as some visa problems.

    Bulgarian MP Elena Poptodorova is drafting together with MP Wilmia Zimmerman a joint report on the visa issues. Bulgaria insists on its removal from the EU visa blacklist. An expert group which was in Bulgaria in June has already prepared their estimates. It is expected for the Poptodorova and Zimmerman report to make a recommendation for specifying clearly the criteria and the requirements to Bulgaria in connection with the visa regime and the emigration policy, Mrs Poptodorova told a news conference today.


    Sofia, July 19 (BTA) - Bulgaria's Parliament today ratified the Treaty of the European Energy Charter and the Protcol on Energy Efficiency and Related Environmental Aspects. The European Energy Charter was signed in The Hague on December 17, 1991 by 51 countries. This instrument set a new beginning in European relations in the field of reliability of energy supply and optimization of energy production, transformation, transmission, distribution and consumption. The European Energy Charter Treaty, signed in Lisbon on December 17, 1994, is the fundamental agreement regulating relations in this sphere.

    Bulgaria's accession to the Treaty does not jeopardize its sovereign rights in the energy sector, the National Assembly Standing Committee on Power Generation and Energy Resources observed. The Treaty expressly says that each state party has discretion in determining the geographical areas within its territory which will be provided for exploration and exploitation of its energy resources. The Protocol on Energy Efficiency and Related Environmental Aspects enjoins the signatories to take action for improvement of energy efficiecny at all stages of the energy cycle, including the relevant statutory framework, institutional establishment and system for preferential financing of energy efficiency projects.


    Sofia, July 19 (BTA) - Parliament today decided to schedule the presidential elections for October 27, accepting the proposal of the ruling Socialists. The opposition preferred November 9. This will be the second presidential election in Bulgaria after the 1989 launch of democratic changes. Under the Constitution, presidential elections are held three to two months before the expiry of the term of the sitting president, which in this case means from October 19 to November 19. Incumbent President Zhelyu Zhelev was elected on January 19, 1992 and his term expires in January 1997.

    The opposition insisted to have the elections in November claiming there is still farm work to be done in October and it will prevent many farmers from voting. Under the Constitution the President of Bulgaria is elected in a direct vote and stays in office for five years. To qualify for president, the candidate should be a Bulgarian citizen by birth, be aged over 40 and must have lived in the country for the past 5 years. Winner in the election is the one who garners over half of the votes, if more than 50% of the eligible voters have voted. If noone manages to get the 50% of the votes, the two most successful contenders participate in run-off elections.

    Four candidates have already entered the presidential race: Foreign Minister Georgi Pirinski of the ruling Bulgarian Socialist Party, Peter Stoyanov of the united opposition, Alexander Tomov, leader of the Civic Alliance for the Republic, a coalition with no deputies in Parliament, and George Ganchev, leader of the parliamentary Bulgarian Business Bloc. The latest opinion polls show that Pirinski and Stoyanov enjoy equal approval ratings after the former has until recently lead the polls. Shifts, however, are not unlikely as the Constitutional Court next Tuesday is due to announce an interpretation of the constitutional provision on Bulgarian citizenship, which might affect New York-born Pirinski.

    The elections will be held under a special law passed in 1991 and amended twice - in 1991 and in May 1996. Unlike the 1992 elections this time white ballot papers will be used. The last amendments to the law also introduced more stringent requirements for the contenders. An independent candidate must be nominated by 15,000 supporters through an initiative committee. To nominate candidates for president and vice president, the political parties, coalitions and initiative committees must also provide to the central bank a 250,000 leva non-intrest-bearing deposit (equal to 1,300 US dollars at the current exchange rate).


    Sofia, July 19 (BTA) - The candidate of the ruling Bulgarian Socialist Party and its coalition partners, Georgi Georgiev Pirinski, was called up for military service in the Bulgarian army but was not conscripted for reasons of health; this is evident from documents kept in the Central Military Archives, Defence Minister Dimiter Pavlov said in Parliament today. Now Georgi Pirinski is on the Sofia list of reserves, Minister Pavlov added replying to Dyanko Markov, MP of the Union of Democratic Forces, who wanted to know why the BSP presidential candidate (if elected, he would be Supreme Commander-in-Chief of the army) "did not do his compulsory military service and was not sworn in as a conscript".

    The opposition is awaiting the ruling of the Constitutional Court concerning the interpretation of the constitutional term "natural-born Bulgarian". It petitioned the Court because Georgi Pirinski was born in the United States and his mother was an American citizen at the time.


    Sofia, July 19 (BTA) - The largest parliamentary opposition group, the Union of Democratic Forces (UDF), demanded that the Government provide information about the expected grain harvest and supply in Parliament today. According to UDF leader Ivan Kostov, as the data were hidden by the Cabinet, the opposition has no possibility to offer a way of overcoming the grain crisis. Prime Minister Zhan Videnov exercised his right to postpone the reply to the opposition's questions. The opposition insists to hold a debate on the grain crisis early next week. By its proposal, Parliament should have had a closed sitting on the problem today.

    Giving a news conference later today, the UDF leaders asserted that grain had been taken from the contingency and the wartime reserves and that the Government had harmed depositors' interests by issuing a decree on the State Savings Bank floating loans to flour mills. According to the UDF, nearly all the foreign exchange reserve would have to be spent to import wheat. There are bread and wheat shortages in some parts of the country. Data published by the press show that 164 companies have exported 685,000 t of wheat of the 1995 harvest, while the export quota was actually only 540,000 t. Grain prices are climbing up, flour has disappearead from the shops, there are problems with the bread supply.

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