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News from Bulgaria, 96-07-31

Bulgarian Telegraph Agency Directory - Previous Article - Next Article

From: Embassy of Bulgaria <>



31 July, 1996




    Sofia, July 30 (Andrei Sharkov of BTA) - Military relations between Bulgaria and Britain are good, and there are worthwhile prospects for their further expansion and deepening, Bulgarian Defence Minister Dimiter Pavlov and British Defence Secretary Michael Portillo told reporters here today. At the invitation of his Bulgarian counterpart, Mr Portillo is paying a one-day official visit to Sofia, the first by a UK secretary of defence. Tomorrow he will continue his East European tour, which will also take him to Bucharest, Skopje and Ljubljana.

    Mr Portillo assessed in positive terms Bulgaria's participation in NATO's Partnership for Peace initiative and specifically its performance in PFP exercises. Military units of the two countries may some day act side by side in such exercises, he noted. Therefore, achievement of interoperability and reciprocal adaptation is particularly important for attaining the common objective: building a European security architecture. "Equipment here plays a minor part; what really matters is our understanding, the language, the procedure," he told reporters, speaking through an interpreter.

    Bulgaria is helping in the language training of Bulgarian officers and in personnel training, Mr Pavlov recalled, appreciating highly the join work in the eleven areas of military cooperation listed in the 1995 agreement. The 1996 programme for cooperation between the two military departments envisages 32 joint events. Vigorous bilateral contacts must be maintained irrespective of whether Bulgaria will join NATO, Mr Portillo stressed. He sees fine cooperation opportunities in the military industry.

    Mr Portillo welcomed Bulgaria's initiative to organize a Balkan defence ministerial in Sofia. "Britain welcomes Bulgaria's ties with Russia as they can contribute substantially to European security. We, too, are trying to build ties and bridges in Europe," he said, answering a reporter's question.

    Later in the day Mr Portillo conferred in succession with Foreign Minister Georgi Pirinski, Prime Minister Zhan Videnov and President Zhelyu Zhelev. Bulgaria's participation in the European security architecture was on the agenda of the talks.

    It should not be considered that Bulgaria, unlike other Central and East European countries, is less interested in building up a steady security system, Minister Pirinski stated at his meeting with Portillo, Foreign Ministry Spokesman Pantelei Karassimeonov said after the meeting. Bulgaria is against the establishment of new dividing lines and insists on forming partnerships with all countries in the area of security, Pirinski said.

    Prime Minister Videnov familiarized the guest with the serious discussion under way on the national security doctrine, the implementation of military reform and of recently adopted laws in the filed of the armed forces, Nikola Batalov, Spokesman for the Government, said after the meeting between Videnov and Portillo. It was noted that the national debate is an element of the European dialogue on security, that the enhanced dialogue with NATO and Bulgaria's participation in the PfP initiatives are very important for this country. In regard to the NATO membership issue, the British Defence Secretary described Bulgaria's stance as similar to the ones held by a number of countries, like Austria and Spain for example, in the process of the organization's earlier enlargement. According to Mr Portillo, Russia plays an important role in the European security architecture.

    Bulgaria should sooner or later join the Euro-Atlantic structures, President Zhelev said meeting Portillo. As an argument to this end Zhelev pointed the membership in these structures of two of Bulgaria's neighbours (Turkey and Greece) and the bid of other two (Romania and Macedonia) to join. Bulgaria cannot remain isolated from the territory of European security, Zhelev added. Most willing to join NATO are countries which are afraid of Russia, according to the guest. Out of a bloc opposing Russia NATO has become a bloc cooperating with this country, Michael Portillo stated. Bulgaria can be a bridge between the two, he said, quoted by Stefan Dimitrov, Chief of the President's Military Office.

    Bulgaria is among the most active countries in the PfP initiatives, Mr Portillo said in a lecture delivered before the Atlantic Club.


    Sofia, July 30 (BTA) - Parliament today passed on second and conclusive reading the updated version of the 1996 National Budget Act as moved by the Government. The new version projects central government revenue at a total of 358,216.9 million leva and expenditures at 438,932.6 million. The resulting budget deficit is 22,402.9 million leva higher than the original version of the Budget Act, voted in February 1996. The updated budget is based on the following macroeconomic projections: average annual exchange rate of 150 leva per US dollars, 1996 annual inflation rate of little over 100 per cent, and average annual level of the base interest rate of 72 per cent for July-September and 50 per cent for October-December.

    Public debt interest payments are the largest budget expenditure item, a total of 231,003.4 million leva. If this limit is used up, the Council of Ministers must move a new 1996 budget update. Prime Minister Zhan Videnov told reporters yesterday that the budget will not be further updated in the autumn. Parliament today also adopted an updated sum of central-government budget subsidies for the municipalities, 35,423.931 million leva in all. Aggregate income tax revenue (28,100 million leva according to the central government budget revenue side as updated) will be shared up equally between the local and central government budgets, according to a provision pushed through by the majority which voted down an opposition motion that this ratio be 70:30 in favour of the municipalities. The outlays for ministries, central government departments and other state-financed organizations were also updated today, totalling 121,505 million leva.


    The National Assembly passed today the Government-sponsored Act for Financial Rehabilitation of State-owned Enterprises. The enterprises to which this legislation will be applied will be specified by the Government. Under a clause in the law, the financial rehabilitation will seek to offset the losses and to restructure the obligations of the enterprises in order to reduce their effect on the other sectors of economy.

    The law provides for the enterprises, named by the Government, to stop paying their obligations due by June 30, 1996. These enterprises, however, will not be allowed to sign loan contracts and other deals which would increase their indebtedness. The specified enterprises will operate on programmes for financial rehabilitation, worked out by the Government. The programmes will be applied for no longer than 12 months.

    Under the law, depending on the results from the programmes for financial rehabilitation and with the consent of the Minister of Finance, the enterprises will be allowed to negotiate with their debtors rescheduling, delaying, writing-off or reducing of their obligations or other means for repayment the debts, interest payments included. In case no financial rehabilitation is achieved within the planned period, the law envisages taking actions for their liquidation.

    A special rehabilitation fund will be established in support of the processes of stabilization of the enterprises. It will collect money from the State Budget, the State Fund for Reconstruction and Development, from dividends payable to the state, donations and loans granted by the international financial institutions. The Government will specify the procedure and the conditions for using the fund's money. The funds will be controlled by the Minister of Finance and will be kept on an account at the National Bank of Bulgaria (BNB, the central bank).

    A clause in the law's final provisions defines as state-owned enterprises the commercial enterprises in which the state is a sole owner of the capital, the commercial partnerships in which the state holds more than 50 per cent interest, the state-owned companies not transformed into commercial partnerships and those state-owned enterprises juristic persons set up by a law which are not commercial partnerships.

    The law will be in force by December 31, 1998.


    The National Assembly passed today amendments to the Privatization Funds Act. The legislation was adopted in connection with the process of privatization through investment vouchers in the country. Today's amendments will seek to accelerate the process of mass privatization and to eliminate certain shortcomings of the law.

    Head of the Mass Privatization Centre Kalin Mitrev said today at a meeting of the parliamentary Economic Committee that more than 1 million Bulgarian citizens have so far transferred investment vouchers to the privatization funds. Head of the Securities and Stock Exchanges Commission Hristian Tanoushev told the MPs that 141 registration statements from privatization funds have been received at the Commission so far; the prospectuses of 92 funds have been approved and 44 funds were denied registration.

    At the move of the Government, the Parliament adopted amendments to the law, under which the Council of Ministers will be able to work out a list of the state officials to be banned from taking part in the management of privatization funds. Another amendment sets the requirement that on filing the registration statement, the founders of a privatization fund should have on the fund's capital no less than 10 million leva in cash or in state securities. On submitting with the Securities and Stock Exchanges Commission their applications for the conduct of business in a privatization fund capacity, the funds must pay up in full the subscribed capital. The funds are also required to have at least 70 per cent of their capital in investment vouchers.

    The citizens will be allowed to transfer investment vouchers to privatization funds between auction sessions. Another amendment in the law specifies the conditions for foreign citizens to participate as founders in privatization funds.


    Sofia, July 30 (BTA) - The Constitutional Court today determined to consider President Zhelyu Zhelev's petition as to whether the right to strike can be denied to definite categories of workers and employees, Court member Georgi Markov, rapporteur on the case, said today. The President asked the Constitutional Court to interpret a constitutional clause according to which "workers and employees have the right to strike in defence of their collective economic and social interests. This right is exercised on terms and according to a procedure established by statute." The petitioner challenges the constitutionality of two provisions of the Settlement of Collective Industrial Disputes Act, which forbid strikes in the power industry, communications, health care, the system of defence, the Ministry of the Interior, and the judicial, prosecuting and investigative authorities.


    Sofia, July 30 (BTA) - "President Zhelyu Zhelev returned to Parliament the amendment to the state budget act, guided by considerations of principle. The amendment is an attempt by the Parliament to seize powers, which are the competence of the independent judiciary power," a statement of the President's press office says, adding furthe that "In a state of law the laws are valid for everyone, the state institutions included. The laws in such a state must be applied, no matter whether they are convenient to "us" or not". The statement was issued in connection with "unjustified attacks by Socialist Prime Minister Zhan Videnov against the President, claiming that by returning for reconsideration the amendment which tries to settle the dispute between Chimko and the Multigroup economic conglomerate, the President is harming the public finances."

    The bill was apparently occasioned by a highly controversial assignment contract of September 1994, whereby Bulgargas transferred to Credit Bank and Discount House the unpaid bills of the country's largest fertilizer manufacturer, Chimco of Vratsa, and the largest iron and steel works, Kremikovtsi of Sofia, for gas delivered between 1991 and 1993. Under the amendment which the Parliament passed, "all amounts due from juristic persons and sole traders for the sale of natural gas delivered under commercial contracts and under international agreements, including the Yamburg Agreement, to which Bulgaria is a party through its representative Bulgargas Inc. should be treated as government claims."

    The Prime Minister said yesterday that the returning of the amendment is "a purposeful attempt to injure the public interests." "I do not want to lay charges on Zhelyu Zhelev that this act is servicing financial groups, which several years ago financed even his election campaign. This is hardly the case, but the fact can be interpreted in that way, too" the Prime Minister said.

    Chimco and the two financial intermediaries (which are affiliated to the private conglomerate Multigroup) are locked in a legal battle over the contract. The assignee argues that the agreement is perfect and insists on its performance. It is suing Chimco for default, claiming 1,000 million leva. The debtor wants the contract voided, claiming that it has already paid the Exchequer the full amount of principal and almost all interest on its debt to Bulgargas. Multigroup won the case at the first- instance district court, and the Arbitration Court also issued an award in its favour. The case has now gone before the Supreme Court for appellate review.


    Sofia, July 30 (BTA) - The press runs reports on the second-reading debates in Parliament on amendments to the 1996 national budget, which started yesterday and continue this morning.

    "Douma" quotes Prime Minister Zhan Videnov as saying that there will not be a second amendment to the 1996 budget in the autumn. "Pari" quotes Deputy Chairman of the Budgetary Committee in Parliament Ventsislav Dimitrov, who is an MP of the opposition Popular Union, as saying that President Zhelyu Zhelev may challenge the budget update before the Constitutional Court because of the reduced subsidies to local governments. On the basis of the 1995 National Budget Act, passed in February, a number of municipalities spent funds within the amount of expenditure set in February and have no ways to return them now.

    The press reports on the decision of the Supreme Court of July 16, 1996, which revokes articles of a Cabinet's decree of 1991 on foreign currency regulations. The decision allows Bulgarian citizens to make payments in foreign currency in the country and to open bank accounts abroad, which were so far banned.

    The decision will take effect after its promulgation but even then it will not change the foreign currency regulations, head of the Legal Department of the central bank Borislav Startev says, quoted by "Troud".

    The press quotes Videnov as saying that the Court made an ill- considered decision which the Cabinet will correct with another decree. Interviewed by "Pari", Central bank Governor Lyubomir Filipov describes the Court's decision as irresponsible.

    Foreign investment in Bulgarian in the past five and a half years amounted to as little as USD 610,049,000, "Troud" says, citing the Foreign Investment Agency. Foreign investment in the first half of 1996 total USD 92,600,000, with USD 60 million made in the first quarter. 44.7 per cent of investment were made in industry. Investments in trade amounted to half as much. As little as USD 19.7 million went into telecommunications. German companies continue to top the list of this country's foreign investors, followed by Dutch companies with as little as USD 62 million. Russian investments in Bulgaria amounted to USD 22.7 million, placing it in the ninth position.


    Sofia, July 30 (BTA) - Today the leadership of the Bulgarian Ministry of the Interior decided to strengthen the measures for crime control, the Interior Ministry press office said. The decision was prompted by the analysis of the cases of terrorism, reads the press release. The danger increases of the use of the country as a transit point for international crime and enlargement of the black market of weapons, the press release says.

    The Ministry plans to provide reliable protection and control of strategic sites, border checkpoints, bus stations, ports and airports. Procedures of cheching people working with hazardous substances and the units where they are kept will be updated. The Interior Ministry will seek the assistance of state institutions and of the civil society in implementing the plan, the press release says.


    Atlanta, July 30 (BTA) - To everybody's surprise, the Bulgarian volleyballers beat the US, eliminating it from the quarterfinals. True to their unpredictable style, the Bulgarians beat the US 3-2 and are now due to meet Olympic, European and world vice-champion Netherlands.

    The circumstances in Pool A developed in such a way that the winner of this game goes to the quarterfinals and the loser back home. The Bulgarian volleyballers once again proved they can play well only when things get hot and, threatened to lose the match with 1-2 games, they reversed it, snatching a valuable victory. This was a severe blow on the Americans in the team games in Atlanta, and the squad of the US , the country in which this game originated 101 years ago, could not make it to the quarterfinals.

    In the Bulgarian team, Martin Stoev was most efficient (45.83%). Captain Dimo Tonev and Nikolai Zhelyazkov played well in defence. Bulgaria have lost to the Dutch in their last four meets.

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