News from Bulgaria / Mar 12, 96

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

Bulgarian Telegraph Agency Directory

EMBASSY OF THE REPUBLIC OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

12 March, 1996

CONTENTS

[01] FOREIGN MINISTER PIRINSKI ON VISIT TO CYPRUS

The Cypriot question will be high on the agenda for Pirinski, who believes it is one of the most complex issues in Southeastern Europe. Pirinski today said before his departure he was interested in being familiarized on the spot with the Cypriot government's approaches, in the contest of the overall effort for lasting stabilization in the region and new initiatives in this area. He said the forthcoming negotiations on Cyprus' membership in the European Union were of interest to Bulgaria.

Asked if the question of illegal Bulgarians in Cyprus will be discussed, Pirinski said this was an issue which Bulgaria was seeking to resolve by an intergovernmental agreement; such an agreement has not yet been developed. "We should be seeking to create the same conditions for Bulgarians, as for the nationals of any other country," he said.

[02] FOREIGN MINISTERS OF BULGARIA, GREECE, ROMANIA TO MEET

The three ministers first met on August 26 and 27, 1995, in the home city of then Greek Foreign Minister Karolos Papoulias, Ioannina. They discussed infrastructure projects, opportunities to expand economic cooperation, and the situation in the Balkans. They agreed to hold an international seminar in Sofia on "The Role of Trans-European Infrastructure for Stability and Cooperation in the Black Sea Region." It took place from November 15 to 17, 1995 under the auspices of the Organization for Security and Cooperation in Europe. The ministers also reached a number of agreements on the expansion of trade and economic cooperation among the three countries. The second meeting of the ministers, dubbed Ioannina 2, should have taken place in late January, but was postponed following the resignation of Greek Prime Minister Andreas Papandreou and formation of a new Greek Cabinet.

[03] COUNCIL OF MINISTERS DECISIONS

The Council of Ministers discussed the cascading of military equipment from Belarus to Bulgaria under the Conventional Armed Forces in Europe Treaty. Defence Minister Dimiter Pavlov was authorized to organize the negotiations and sign the deal for the cascading of 100 mechanized infantry combat vehicles from Belarus to Bulgaria. The same amount of equipment will be destroyed on Bulgarian territory, the Government Spokesman Nikola Baltov said.

The securities and stock exchanges commission will require stock exchanges to be set up as joint-stock companies with a minimum paid-up capital of 100 million leva, to issue a licence, according to an ordinance passed by the Council of Ministers today. The document also sets requirements to investment brokers.

ZUNK (bad-debt) bonds worth 400 million dollars will be shared out for rehabilitation of the banking system, Deputy Prime Minister Roumen Gechev, Minister of Economic Development, said today. This step constitutes the first stage of the bank rehabilitation programme, approved by the Government today.

Gechev further said the competent bodies will decide these days how to distribute the bonds - to which banks and in what amounts.

At this point it is certain the United Bulgarian Bank will receive 100 million dollars worth of bonds, Gechev said. This proceeded from Bulgaria's commitment to participate in a joint project with the European Bank for Reconstruction and Development for rehabilitation of the United Bulgarian Bank. According to the project, the European institution should make a direct investment of 100 million dollars.

It is a matter of days for Bulgaria to receive funds from the World Bank, Deputy Prime Minister Gechev said today. He specified Bulgaria has utilized 40 million of the provided 440 million dollars. The terms are now being finalized for disbursement of 65 million dollars. They will be spent for bank rehabilitation and structural reforms, Gechev said. He specified the structural measures will include rehabilitation of key enterprises and liquidation of money-losing companies.

[04] CABINET APPROVES PRIVATIZATION AGENCY 1995 REPORT

Twenty of the companies that went private in 1995 were municipal and half of the 3,707,850,000 negotiated privatization-related payments has already been made into municipal budgets. The total effect of the privatization deals municipalities have concluded amounted to 1,500 million leva, according to the Privatization Agency report.

The number of voucher books for mass privatization sold to members of the public grows by the day but is still under 600,000, Mass Privatization Centre Chief Kalin Mitrev said today. Of 8 million Bulgarians, 6,700,000 are entitled to participate in mass privatization. The percentage of those who have already bought voucher books is highest in Sofia (over 10%) and lowest in the districts of Blagoevgrad, Kurdjali and Kyustendil. Low privatization activity is also reported in the provinces.

Mass privatization in Bulgaria was launched on January 8 this year. The privatization scheme envisages that each Bulgarian aged over 18 is entitled to 25,000 investment leva in a voucher book that can be acquired against 500 leva. Holders of investment vouchers can bid for the 1,063 enterprises put up for mass privatization.

[05] BCC WANTS PERSONNEL CHANGES IN BANK SUPERVISION

Sofia, March 11 (BTA) - President Zhelyu Zhelev has undertaken to consider an improvement of the composition of the Governing Board of the Bulgarian National Bank (BNB, the central bank) and possible changes in bank supervision, Dimiter Dimitrov, Chairman of the Board of Directors of the Bank Consolidation Company (BCC) and Deputy Minister of Economic Development, said after a meeting with President Zhelev today. Personnel changes are necessary in bank supervision in order for the banking system to function, regardless of the capital structure, he added. The personnel change the BCC chief has in mind is that of Bank Supervision Chairman Kamen Toshkov. According to the deputy economic development minister, the BNB Governor should choose the new candidate "if this hypothesis is realized".

If bank supervision acts according to its potential and powers, there will be no problem with artificial opposition between state-owned and private banks, Dimitrov said. The request for an international audit of the central bank made by the President and his advisers corresponds to our views too, he added. Private banks are deliberately creating the impression of some inequality and the President is convinced in this, the banker said. So as to prevent a manipulation of the public all banks should reveal their actual state by presenting their balance sheets, Dimitrov said. He hopes that the "Bulbank" project for rehabilitating the banking system will be launched by March 31. Financial assistance to banks will be rendered on a principled basis - support will go to those banks which have the potential in them of becoming the main body of the future banking system. The idea for these to be only state-owned banks is no longer topical.

[06] BULGARIAN PARLIAMENTARY DELEGATION VISITS BELGRADE

Sofia, March 11 (BTA correspondent Lyudmil Mitakev) - "We need take decisive actions to make up for the lost time in the relations between the two states," is the stand of Chairman of the Bulgarian National Assembly Blagovest Sendov and of Chairman of the Chamber of the Republics in the Yugoslav Federal Assembly Prof. Dr. Milos Radoulovic which they jointly stated at a meeting today in Belgrade. The meeting marked the start of the visit of a Bulgarian delegation, led by Parliament Chairman Blagovest Sendov, which includes MPs from five parliamentary groups. The visit is on the invitation of the Yugoslav Parliament.

The parliamentarians voiced their satisfaction with the activated bilateral relations, particularly following the visit of Bulgarian PM Zhan Videnov to the Federal Republic of Yugoslavia (FRY) and last week's meeting of the joint committee for economic and scientific-technical cooperation in Sofia. Both parties hope that trade between the two states will reach the worth of 500 million US dollars already this year.

Mr Sendov recalled that in Sofia Bulgaria expressed full understanding of the problems of Yugoslavia and stressed the fact that Bulgaria has never taken advantage of the difficulties that neighbouring Yugoslavia is facing. Mr Sendov voiced satisfaction with Belgrade's swift response for the drafting of agreements for cooperation and good neighbourly relations and on the avoidance of double taxation, which the two states are expected to sign. He expects that Belgrade will cooperate for allowing Bulgarian companies to take active part in the restoration of Bosnia and Herzegovina and more particularly in the building of infrastructure.

Mr Sendov dwelled in particular on the problems of the Bulgarian national minority in Yugoslavia. "Our compatriots represent a bridge that may bring closer the two neighbouring states," Mr Sendov said. He specified that Bulgaria lays no claims on Yugoslavia's legal framework on national minorities but on the concrete application of the laws. "We insist that the Bulgarian national minority receives equal treatment with the other national minorities," Mr Sendov said. He pointed out in that connection that Bulgaria would refrain from internationalizing the problems if it finds that the social economic situation of the Bulgarian minority is improving. Mr Sendov familiarized his host with Bulgaria's intention to grant 10 million leva for culture and information activities in the municipality of Dimitrovgrad and asked for cooperation for their efficient usage.

Yesterday before his arrival in Belgrade the Bulgarian delegation dropped in at the municipality of Dimitrovgrad and met with its Governor Nikola Stoyanov. The parties discussed certain problems and Bulgaria's potentials to settle them. Blagovest Sendov recalled that the Bulgarian Parliament voted budget allocations for improvement of the culture and information services in the municipality of Dimitrovgrad, which is inhabited by Bulgarians.

The Bulgarian delegation had another meeting in the Dimitrovgrad municipality to discuss concrete projects. Mr Stoyanov emphasized the significance of the Bulgarian minority as a bridge for cooperation between Bulgaria and FRY. Blagovest Sendov stressed that against the background of the overall political and economic development of the relations between the two neighbouring states the situation of the Bulgarians living in that area is also expected to improve.

In addition to the talks in the parliaments of FRY and of Serbia, the Bulgarian delegation is scheduled to hold meetings with Serb President Slobodan Milosevic, Yugoslav President Zoran Lilic and with Federal Prime Minister Radoje Kontic.

[07] LEV HOLDS OUT AGAINST US DOLLAR, THE QUESTION IS HOW LONG ?

Last week the banks turned over the record high amount of 335 million US dollars. By the middle of the week the US dollar climbed to 85 leva in the foreign exchange offices, although the central exchange rate was below 78.2 leva for one US dollar. The lev's depreciation was not stopped by the central bank, but by dealers of Bulbank, Biochim, Post Bank, Elitbank and Unionbank, "Continent" says. Bulbank alone participated in the trade with 15 million leva, as a result of which the lev rebounded. "I do not think that the lev will be under strong pressure this week," Ventsislav Yosifov, Executive Director of First Private Bank, said over the national radio yesterday. According to him, the explanation is that the winter season is towards its end.

There are three major reasons for the currency crisis, Ivan Kostov, Leader of the opposition Union of Democratic Forces and former finance minister, said on the national television. The first reason is the country's limited hard currency reserves, he said. At present the hard currency reserves amount to 900 million US dollars, according to BNB figures. Of them some 700 million US dollars have been invested in US federal reserve bonds and in fact the central bank disposes of no more than 300 million US dollars. Kostov cited as second reason for the crisis the BNB currency policy. Due to misconceptions about stability of the lev, it was seriously overvalued in 1995, he said. The third reason is the BNB errors and namely the attempted rehabilitation of several banks and the purchasing of AgroBusinessBank for one lev. The convertible currency crisis is only temporarily contained, Kostov stated.

The hard currency reserves of BNB are enough to intervene on the foreign exchange market, "Demokratsiya" writes. Moreover, that BNB is assisted by Bulbank and Biochim, the paper adds. However, the trade deficit and the lack of agreement with the international financial institutions do not prompt an inflow of fresh money earlier than September, the paper notes. This will render difficult the external debt servicing in the summer when more than 700 million US dollars should be repaid, "Demokratsiya" writes.

According to BNB Governor Lyubomir Filipov, there is not exactly a crisis on the forex market, as the US dollars have strengthened some 10 to 11 percent since the beginning of the year. However, he admitted that the lev's fall outstrips inflation. The problems in the banking sphere are related to the problems in real economy and extending of loans to loss- making enterprises.

The major cause of the hard currency crisis is the condition of the real sector, Emil Kyulev, Co-Chairman of the Association of Commercial Banks, said. The lev cannot be stable, given the badly operating economy, he stated.

According to Fiance Minister Dimiter Kostov, there is an objective dynamics of the US dollar movement. The problems are caused by the overdue decisions in the whole period between 1990 and 1995, Kostov stated. Asked by a "Troud" reporter about his projections about the US dollar in late 1996, the Finance Minister says that he cannot commit himself to concrete projections.

[08] PRESIDENTIAL SPOKESMAN ON PLENUM OF RULING SOCIALISTS

Sofia, March 11 (BTA) - The BTA today received a statement by Presidential Spokesman Valentin Stoyanov following a plenum of the ruling coalition of the Bulgarian Socialist Party (BSP), the Alexander Stamboliiski Agrarian Union and the Eco-Glasnost Political Club. The plenum that ended late last night analyzed the first year in office of the government.

"The statement was prompted by the attacks against the President of the Republic of Bulgaria in the report of the Chairman of the Supreme Council of the BSP at the plenum, or as they called it, the joint sitting of the ruling party," Stoyanov says. "Zhan Videnov, who is Prime Minister of Bulgaria apart from being leader of his party, was expected to make an objective and honest analysis - at least before the narrow party community if not before the whole Bulgarian nation - of all issues that jolted the country over the past few weeks: crime and corruption, international isolation, the grain crisis and the crisis in animal breeding, the banking crisis and the supervision of banks by trusted advisors to the Prime Minister, the purges of CEOs, the [Orion] circle of friends of the Prime Minister, the AIDS scandal and the gaffes of cabinet ministers. Instead, the Prime Minister aims at targets outside his government and more specifically at the President; and what is more, he offers to evidence," the statement reads. "Videnov's government is the sixth with which the President works and the first that started its term with such a strong confrontation. It works in conspiracy, in full secrecy from the other state institutions. Things came to the point when international accords of paramount importance for Bulgaria fail only because the Prime Minister does not allow his ministers to join presidential delegations. This, however, does not stop him [the Prime Minister] from saying that the President has turned into "a symbol of anti-statehood". But then a symbol of what is the incessant lash of abuse upon the lawful Head of State. The arrogant language of the ruling blemishes the idea for a democratic state," the Presidential Spokesman goes on to say.

"Addressing Parliament an year ago, the President warned that the BSP was trying to become again the party-state. Party leaders then responded strongly to the warning but yesterday's plenum heard some of them making statements to that effect," the statement says.

"At a special news conference held over a month ago, the President reviewed the one-year governance of the BSP. His conclusions matched some of those made at yesterday's plenum. It becomes clear from the attacks of the BSP leader that his idea of statehood is an entirely Stalinist one. He believes that statehood is identical with totalitarian state and with such ideas Bulgarian democracy will not go far," Stoyanov further says.

"The President has repeatedly voiced readiness to work, and has worked, with all governments carrying out the reforms this country needs. The incumbent government does not carry out these reforms and as a result of its behavior the BSP misses all chances to turn into a European- type modern Left party. This might be an internal problem for the BSP, but the chances Bulgaria has missed is a national problem that affects more than the 30 percent of Bulgarians who have voted for the BSP. It affects all Bulgarians and their future and amounts to the problem what state and statehood our children and grandchildren, the Bulgarians coming after us, will inherit," the statement says in conclusion.

[09] DAYLIGHT SAVING TIME

Sofia, March 11 (BTA) - Bulgaria introduces daylight saving time at 12 p.m. on March 30, when the clock will be set ahead by one hour, and returns to standard time at 12 p.m. on September 29, the Government decided today.