News from Bulgaria / Dec. 28, 1995

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

Bulgarian Telegraph Agency Directory

EMBASSY OF BULGARIA

WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

CONTENTS

[01] BULGARIA PROPOSES TO NATO TO TAKE PART IN IMPLEMENTATION OF BOSNIAN PEACE ACCORD

Brussels, December 6 (BTA spec. corr. Atanas Matev) The Bulgarian government proposed today to take part in the implementation of the Bosnian peace accord overseen by a NATO force.

The proposal was contained in a letter presented by Bulgarian Foreign Minister Georgi Pirinski to NATO's acting Secretary-General Sergio Balanzino. Pirinski was in Brussels today for the session of the North Atlantic Cooperation Council (NACC).

The Bulgarian government said in the letter it was ready to start discussing the conditions of contributing to the success of the international mission in Bosnia.

The letter was written on a proposal by the Ministries of Foreign Affairs and Defence considered on Tuesday following an inquiry by the NATO Secretariat about the possible participation and support by individual NACC member states to the NATO force policing the enforcement of the military aspects of the Dayton peace accord, Pirinski told the press.

The proposal envisages support to the international peacekeepers in Bosnia-Herzegovina and on Bulgarian territory, including the sending of teams of engineers and medics to Bosnia, logistical support and holidays in Bulgaria for the peace force, Pirinski also said.

The Bulgarian Foreign Minister stressed two key points in Bulgaria's future talks with NATO about the proposal. First, any steps in support of the international peace force in Bosnia should be approved by Bulgarian Parliament. Ruling out involvement in military operations, Pirinski said that since the NATO-led mission was, inter alia, of a military nature, the proposal should be voted in Parliament. Second, Bulgaria's participation in the implementation of the peace accord would require external financing. This country has suffered extensive damage due to the enforcement of international sanctions against Serbia and cannot carry a new financial burden, Pirinski said.

NATO's reply to the Bulgarian proposal is expected in the coming days. NATO member states have already commended it. The leaders of the German delegation to the NACC session mentioned it at a briefing.

During the session Pirinski met with the newly elected NATO Secretary-General Javier Solana and wished him success in his responsible position.

The session focused on two major issues, NATO's enlargement and the international force implementing the Bosnian peace accord.

[02] BULGARIAN PRESIDENT ZHELEV TO VISIT ALBANIA THURSDAY

Sofia, December 6 (BTA) - Bulgarian President Zhelyu Zhelev will visit Albania on December 7 and 8. Zhelev will arrive in Tirana from Italy, where he is on a three-day visit. According to preliminary announcements, a major topic of Zhelev's talks with Albanian President Sali Berisha will be the Kosovo problem. According to reports in the Bulgarian press, Berisha will ask the Bulgarian President for support for the Albanian request that the UN deploy peacekeepers in Kosovo, while the Bulgarian Foreign Ministry expects Zhelev to reiterate the stand in support of the return of a mission of the Organization for Security and Cooperation in Europe, rather than the UN. The two Presidents are also expected to discuss bilateral relations. This will be the Bulgarian President's second visit to Albania. Zhelev made a three-day official visit back in 1993, when the two countries signed a Treaty for Friendship and Cooperation. They also reached agreements in principle on the expansion of links in transport and communications. On the sidelines of the 50th Session of the UN General Assembly in New York last October, the Presidents of Bulgaria, Albania, Macedonia and Turkey signed a declaration on building the East-West transport corridor, to link the Adriatic and the Black Sea. This issue has been discussed during Zhelev's ongoing Italian visit. Berisha made an official visit to Sofia in April 1994. Bulgaria and Albania established diplomatic relations in 1914, severed during the two world wars.

[03] PRESIDENT ZHELYU ZHELEV ENDS VISIT TO ITALY

Rome, December 6 (BTA exclusive by Hristo Petrov) Presidential Spokesman Valentin Stoyanov today familiarized the Bulgarian reporters with last night's meeting between President Zhelyu Zhelev and Italian Prime Minister Lamberto Dini, attended by Italian President Oscar Luigi Scalfaro. Italy supports and hails Bulgaria's desire for full membership in the European Union, the Italian Head of State stressed. A Bulgarian bid to join NATO will be likewise supported. Bulgaria has a similar location as Greece and Turkey, on southern flank of NATO. The Italian President said his country will work for building the East-West corridor. He will send a written confirmation to President Zhelev that he is joining the New York declaration of the state leaders of Turkey, Macedonia, Albania and Bulgaria. Scalfaro asked Zhelev to brief the other presidents who signed the declaration on the contents of his letter. Prime Minister Lamberto Dini fully supported President Scalfaro's statements. In Naples today, Zhelev met with Admiral Leyton Smith, Allied Commander Southern Europe. Admiral Smith discussed the situation in the Balkans and the peacekeeping measures in Bosnia and Herzegovina. President Zhelev expressed his views about Bulgaria's possible membership in NATO and the contribution of Bulgaria for building European security. The Bulgarian MPs accompanying the President also discussed the stands of their factions on these issues. Bulgarian Ambassador Dimiter Lazarov today gave a reception in honour of President Zhelev, attended by President Scalfaro. The reception completed Zhelev's three-day official visit to Italy. Tomorrow he will be received by Pope John Paul II.

[04] SLOVAK PM VLADIMIR MECIAR TO ARRIVE IN SOFIA

Sofia, December 6 (BTA) - A Slovak government delegation, led by Prime Minister Vladimir Meciar, tomorrow arrives on a two-day official visit to Bulgaria. Meciar will meet with his Bulgarian counterpart Zhan Videnov, with National Assembly Chairman Blagovest Sendov and President Zhelyu Zhelev. The second day of the visit will see the signing of intergovernmental accords. Bulgaria and Slovakia have signed accords on trade and payments, reciprocal investment promotion, economic and scientific-technological cooperation and cooperation between the chambers of commerce, and a memorandum on trade liberalization. Bulgaria recognized the independence of Slovakia on December 23, 1992. On January 1, 1993 the two countries established diplomatic relations. In April 1994 the sides reached an agreement in principle on a comprehensive review of documents signed between Bulgaria and the former Czechoslovakia, with a view to establishing their validity. In late 1994 Bulgaria eliminated its trade deficit with the former Czechoslovakia. Trade between Bulgaria and Slovakia in the first half of 1995 hit $9.98 million, with this country having a surplus. Major Bulgarian exports include copper ore and concentrate, rubber bands, zinc, auto parts, wines, impregnated textiles, etc.

[05] IMF REPRESENTATIVES IN BULGARIA

Sofia, December 6 (BTA) - Talks between representatives of the International Monetary Fund (IMF) and Bulgarian officials continue in Sofia. The IMF officials met with Deputy Prime Minister and Minister of Economic Development Roumen Gechev. The talks discussed two areas of issues that are important for the contacts of the Bulgarian government with international financial institutions, as well as the major macro-economic indicators of this country's economy and the start of the mass privatization, the cabinet's press office said. As regards the macroeconmoic framework, the IMF officials estimated 1995 as the best in the past five years. Kincaid stressed that the IMF is satisfied with the low inflation indicator, the considerable drop in unemployment, the efficient management of the 1995 budget, as well as with the economic growth, that in industry inclusive. After familiarizing themselves with official information available from the Council of Ministers, the Ministry of Economic Development and the Privatization Agency, the IMF officials concluded that cash privatization in 1995 is being carried out two times faster than in 1994, and at the fastest pace since the start of the reforms five years ago. IMF advises against the passage of an ordinance on deposit protection, National Bank of Bulgaria (BNB) Governor Todor Vulchev said. In the presence of outgoing IMF Mission Leader for Bulgaria Russel Kincaid, experts of the team of Charles Enoch, who provide legal assistance on drafting of the new legislation, estimated in positive terms the project on bank insolvency, but recommended that passage of deposit protection should be postponed. There is no such an ordinance in Greece, while in Austria a similar document became effective in 1985, Vulchev said. The proposals made so far favour the option that deposits of up to 30,000 leva (about US$ 450 at the current official lev/dollar exchange rate) should be guaranteed 100 per cent, those up to 80,000 leva - 80 per cent. No guarantees are provided for deposits of more than 100,000 leva, Vulchev said. The IMF Mission approves the programme for bank rehabilitation but firmly supports its view that the money should come from the budget and not the central bank, Vulchev said. The Finance Minister's proposal to use the proceeds from privatization was estimated as acceptable. According to Vulchev, there are other sources that could be used to this effect, as for instance the US$ 100 million for credit and recapitalization of United Bulgarian Bank expected from the European Bank for Reconstruction and Development. The inflationary factors topped the agenda of talks of Kincaid and his successor Anne McGuirk. In the afternoon they met Vesselin Blagoev and Kalin Mitrev who are in charge of cash and voucher privatization respectively. Atop the agenda of the two IMF officials tomorrow is a discussion with the BNB Governing Board. Vulchev said they will discuss the monetary policy, leva refinancing, the management of the money supply and reserve money, the interest rates policy. The IMF has long been recommending elimination of the automatic overdraft and switching to an average monthly reporting of mandatory minimum reserves of commercial banks, which will stabilize the financial system, Vulchev added. Kincaid is leaving Bulgaria on Thursday afternoon. On December 20 he will present his report on Bulgaria's economic development before the IMF Board. McGuirk is leaving on Friday. Following the end of today's talks between the IMF representatives and the Bulgarian cabinet officials, it was stressed that results of the past few days provide ground for optimism that this country's agreements with IMF and the World Bank will be concluded. The talks and meetings between Bulgarian cabinet officials and the IMF representatives will continue during the next few days.

[06] BULGARIA, YUGOSLAVIA TO SIGN TRADE ACCORD NEXT WEEK

Sofia, December 6 (BTA) - During a visit to Belgrade on December 11-12 a Bulgarian government delegation is expected to sign a bilateral trade accord and memorandum on air transport. The sides are also expected to schedule the next session of the intergovernmental committee on economic, scientific and technical cooperation. The upcoming visit was atop the agenda of a meeting here today between the Bulgarian Deputy Prime Minister and Minister of Trade and Foreign Economic Cooperation Kiril Tsochev and the Charge d'Affaires of the Federal Republic of Yugoslavia in Sofia Rados Smilkovic, said the Cabinet Press Office. Tsochev outlined before Smilkovic the main issues at the forthcoming talks and the fields where opportunities for cooperation will be sought. The sides will focus on the revival of Bulgarian-Yugoslav trade contacts, seeking to bring trade back to its prewar level of USD 300 million annually, which is way above the present USD 30 million. Other priorities are the development of transport links between the two countries, joint construction projects, communications, the recovery of joint ventures, and development of interbank relations. The sides will consider opportunities for joint implementation of European Union initiatives for the reconstruction of Serbia and Montenegro. Tsochev and Smilkovic further discussed possible cooperation with a view to breaking through on markets in third countries. The Bulgarian delegation, which Deputy Prime Minister Tsochev will lead to Belgrade, will include private entrepreneurs, representatives of state- run companies and officials of the central bank and the Bulgarian Chamber of Commerce and Industry. The delegation will meet Yugoslav Prime Minister Radoe Kontic, Serb Prime Minister Marianovic, Yugoslav Minister of Trade George Siradovic, the Chairman of the Yugoslav Industrial Association Miloevic and other Yugoslav cabinet ministers and members of the governments of Serbia and Montenegro. The visit by the Bulgarian delegation was arranged prior to the signing of the Dayton peace agreement, which is indicative of Bulgaria's serious attitude to its relations with Yugoslavia, Tsochev told the Yugoslav Charge d'Affaires. Smilkovic said in return that Bulgaria should see in Yugoslavia a well-meaning and promising partner.

[07] PROSECUTOR GENERAL'S OFFICE TO LAUNCH INQUIRY

Sofia, December 6 (BTA) - The Prosecutor General's Office is launching a preliminary inquiry into illegal grain exports after tips-off by the press, Prosecutor General Ivan Tatarchev told journalists today. The case was taken up by the district prosecutors whose efforts will be focused mostly on Black Sea towns as press reports said the grain was exported by sea. If the findings of the Prosecutor General's Office indicate the law has been violated, the case would be taken over by the investigative bodies. Press reports in mid-November said the grain export target has been overshot. Dailies wrote that 164 companies have exported a total of 685,000 tonnes of wheat. Other reports set the amount of illegally exported grain at 150,000 to 200,000 t. Experts predicted that some time soon Bulgaria will be forced to import grain at much higher prices. Later the press identified a margin of some 1.6 million tonnes between the bread wheat export figures of the Agriculture Ministry and the National Statistical Institute. Some dailies wrote in late November that in the July-October period this country has exported a total of 950,000 tonnes of grain by sea only. The reports cited officials of the state shipping inspectorates based in Black Sea towns. Most of the grain reportedly went to Turkey, the Middle East and Africa. The Varna flour mill, for example, will run out of flour in mid-December. On November 23, the cabinet issued an ordinance extending the ban of grain exports until September 30, 1996. The ban includes wheat, oats, rye, barley, maize, flour, semolina, and grits. Cabinet representatives expressed a hope that the ordinance will ensure the fulfillment of the quota of 1.1 million t of wheat to meet the needs of the population in the big cities and that outside wheat-growing regions. According to Agriculture Minister Vassil Chichibaba, the cabinet's ordinance will force the companies which bought and hid grain, to sell it on the domestic market, as the costs to store it expecting competitive international prices will prove too high. The Agriculture Ministry published data on over-reporting of grain which caused the dismissal of state mills chiefs in late November. The opposition press published statements that companies close to Prime Minister Zhan Videnov are among the big players in the grain affair. Knowledgeable sources estimated that average profits of exporting one tonne of wheat in September amounted to more than US$ 100. The opposition forces: the Union of Democratic Forces (UDF) and the Popular Union, accused the cabinet of the grain shortage. In Parliament, UDF submitted questions on the grain scandals to Videnov, Chichibaba, Deputy Prime Minister and Minister of Trade and Foreign Economic Cooperation Kiril Tsochev, and to Finance Minister Dimiter Kostov. UDF leaders made it clear that they will demand the cabinet's resignation. The opposition leaders will submit a motion for setting up of an ad hoc parliamentary committee to investigate the grain scandals. There was 'a grain affair' when the UDF cabinet was in office. At the time, the Prosecutor General's Office, together with an ad hoc committee, again investigated companies which traded in grain.

[08] BUSINESS PRESS

Sofia, December 6 (BTA) - "The banks' condition is critical, urgent measures should be taken to stabilize them," banker Emil Kyulev, Co-Chairman of the Association of Commercial Banks (ACB) told "Troud". ACB members gathered for their traditional meeting in the winter resort of Borovets. According to the ACB report delivered at the meeting, fast privatization of state-owned companies and adoption of legal framework about bankruptcies are needed. "Uncertainty about ownership and the absence of legal instruments for debt collection are the most serious obstacles to the development of market economy," reads the report. The banks have been paid only 42.6 percent of the interests due to be paid on loans extended to state- run enterprises. Financial institutions keep on extending loans, so that companies may service some of their debts. The idea for the establishment of a "bank-hospital", intended to take over bad debts, was substituted by the program for rehabilitation of the banking system. The program focuses on the further consolidation of banks and their privatization. The 1996 budget envisages about 6,000 million leva for stabilization of the banking sector. The debts in the banks' portfolios account for 40 percent of the gross domestic product, "Troud" recalls. The Government discusses whether to sell its interest in United Bulgarian Bank to the European Bank for Reconstruction and Development, "24 Chassa" writes quoting Deputy Prime Minister Roumen Gechev as saying at the bankers' meeting.

A Bulgarian stock exchange was set up in Sofia yesterday, "Pari" writes. Its capital is 100 million leva. The stock exchange was founded by First Bulgarian Stock Exchange, Black Sea Stock Exchange, Plovdiv Stock Exchange, Danube-Rousse Free Exchange and North- Veliko Turnovo Stock Exchange.

Bulgaria fulfilled its agricultural quotas for exports to EU for 13 commodities only, "24 Chassa" writes referring to a Ministry of Labour analysis. Bulgarian exports to EU include cheese, yellow cheese, cucumbers, frozen pea and tinned cherries. Commodities exported to EU account for 38 percent of the country's total export. Fifty-three percent of imported goods in Bulgaria are from the EU.

A business delegation of the Bulgarian Chamber of Commerce and Industry was on a visit to the Republic of South Africa from November 25 to December 3. Representatives of 22 Bulgarian companies, who were on the delegation, signed contracts with South African companies in the spheres of mechanical engineering, metallurgy, electronics and food processing, "Continent" says. The most important agreement are in the field of mechanical engineering and provide the export of general-purpose machines, diesel engines, lathes and cranes