News from Bulgaria / Apr 24, 96

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

Bulgarian Telegraph Agency Directory

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

24 April, 1996

CONTENTS

[01] FOREIGN MINISTER PIRINSKI'S VISIT TO GERMANY

Lafontaine and Pirinski discussed economic situation in Bulgaria and the decisions the Bulgarian Government drafts in this sphere. The security system in Europe and especially in the Balkans was also on the agenda of the talks. Pirinski extended an invitation to Oskar Lafontaine to visit Bulgaria, but the date was not specified. Lafontaine will probably come to Bulgaria after his visit to Russia.

Later in the day Bulgaria's chief diplomat met with Karl-Heinz Hornhues, Chairman of the Bundestag's Foreign Policy Committee. The established form is an important practical step in bilateral cooperation, Hornhues stated. According to him, the forum will promote the solution of such an important problem for Bulgaria as its removal from the EU visa blacklist. Hornhues said his talks with Minister Pirinski highlighted possible cooperation between Bulgaria and Germany in connection with the reconstruction of Bosnia. The issue will be discussed during the visit of a Bulgarian parliamentary delegation to Germany in early May.

In the afternoon the Bulgarian Foreign Minister met with Rudolf Seiters, Deputy Chairman of the parliamentary coalition of the Christian Democratic Union/the Christian Social Union (CDU/CSU) and Otto Wolf von Amerongen, Chairman of the Eastern Committee of the German Economy.

This evening Foreign Minister Pirinski had a meeting with German Foreign Minister Klaus Kinkel.

[02] FOREIGN MINISTER PIRINSKI MEETS WITH K.KINKEL

Bonn, April 24 (BTA exclusive by Simeon Vassilev) - German Vice Chancellor and Minister of Foreign Affairs Klaus Kinkel conferred for about an hour yesterday with Bulgarian Foreign Minister Georgi Pirinski. Minister Pirinski arrived in Bonn on April 22 for the setting up of the Bulgarian-German Forum.

After the meeting Mr Kinkel said he promised his Bulgarian colleague to back Bulgaria in its demands. He hailed Bulgaria's commitment to the post-war reconstruction of Bosnia and Herzegovina and voiced Germany's willingness to cooperate with Bulgaria in that field.

Minister Pirinski said that the meeting covered practically all issues of interest to Bulgaria. "I have in mind Germany's cooperation in the process of Bulgaria's integration and its membership in the European Union. As for example in the settlement of some unfavourable for Bulgaria arrangements like the EU visa black list," Minister Pirinski said. According to Mr Pirinski Bulgaria's regional initiatives were strongly praised by Mr Klaus Kinkel.

[03] INTERIOR MINISTER LEAVES FOR PARIS

Sofia, May 23 (BTA) - Interior Minister Lyubomir Nachev left on a three-day working visit to Paris today, the press office of the Interior Ministry said. Nachev is expected to meet French Interior Minister Jean Louis Debre and sign an agreement on cooperation in marking against automobile thefts and the tracing down of stolen cars.

[04] CHIEF OF GENERAL STAFF DEPARTS FOR BRUSSELS

In an interview, published in today's issue of the daily of the Defence Ministry "Bulgarska Armiya," Colonel-General Totomirov says that both meetings will focus on NATO's operation in the application of the peace accords for Bosnia and Herzegovina. This will not limit the general character of the meeting but will serve as a practical basis for discussing the conclusions and the problems, arising from the operations in order to seek ways for promoting cooperation in operative compatibility. The meeting and the conference will also discuss all other aspects of the military cooperation, including the preparation and the realization of the joint military exercises in the framework of the Partnership for Peace (PfP) initiative, General Totomirov says.

In the interview General Totomirov reminds that Bulgaria was the eighth country to join the initiative by signing the framework agreement and that it is also one of the most active participants. In 1995 units from this country took part in 7 exercises in the framework of PfP and in another 6 in the spirit of the initiative, as well as in 36 other events. Bulgaria hosted three exercises: "Co-operative Partner," "Cooperative Rescue" and "Briz'95", Colonel General Totomirov said. In his view Bulgaria event contributed for the promotion of the Partnership for Peace programme, because it was the first partner country, which suggested and launched the initiative of opening basic national exercises for participation by NATO members and other partner states, General Totomirov says in the interview. He refers to the annual "Briz" combat exercise of the Bulgarian navy. According to General Totomirov, this year Bulgaria will take part in 14 exercises in the framework of the initiative and in 9 in the spirit of the PfP, as well as in 71 other events.

[05] BALKAN BUSINESSMEN INSIST ON FREE MOVEMENT

The existing customs and visa barriers, high transport fares and the inadequate infrastructure in the border regions are the main obstacles to the promotion of trade and economic cooperation in the Balkans. This was the conclusion drawn by the participants in the Fourth General Meeting of the Association of the Balkan Chambers (ABC) which started in Sofia yesterday.

The leaders of the delegations of the Bulgarian, Albanian, Greek, Turkish, Macedonian, Romanian, Yugoslav and Cypriot chambers of commerce and industry signed a joint address to the Balkan governments containing concrete proposals. Bulgarian Deputy Foreign Minister Konstantin Glavanakov committed to submit the ABC proposals for discussion to the meeting of the Balkan foreign ministers due in Sofia in late May.

The ABC members agreed to increase information exchange on bilateral basis and lobby in their countries for the building up of correspondent lines and later credit lines among the commercial banks. The International Bank for Investments and Development, of which the controlling interest is owned by the Bulgarian Chamber of Commerce and Industry, voiced its readiness to take part in this initiative. The participants in the meeting adopted an arbitration clause under which ABC will resolve intercompany disputes of members of the separate chambers.

Today the ABC representatives held round-table talks on the prospects to liberalize trade in the Balkans. Attending were guests from EU, Germany and the Commonwealth of Independent States. The promotion of cooperation in the region is a corner-stone of the EU policy, EU representative Vincent Piket said during the discussions. Picket outlined the tendencies in the EU market: removal of customs restrictions, mutual recognition of industrial standards, simplifying of the import and export regulations, harmonization of anti-trust legislation and promotion of the free movement of goods and capitals and said they may be applied in the Balkans as well. Other Balkan countries may be included in the Interreg Bulgarian-Greek project on transborder cooperation, under the PHARE program, given its so far successful implementation, Picket stated. ABC President Bozhidar Bozhinov, who is also President of the Bulgarian Chamber of Commerce and Industry, pleaded for relaxing the Shengen restrictions and introducing eased visa regulations for businessmen.

Bernd Kitterer, Director General of the Association of German Chambers of Industry and Commerce, familiarized the participants with the results of Bulgarian-German cooperation. So far Bulgaria and Germany have held eight business meetings, under the auspices of the German association, with the participation of more than 1,000 companies. The common goal of the projects drafted at these meetings was to stimulate Bulgarian exports to Germany and EU and promote Bulgarian goods on these markets. The German side has invested more than 200 million Deutsche Marks in these projects. Mr Kitterer proposed the establishment of an European-Balkan association of the chambers of commerce and industry, which will aim at the integration of the Balkan countries into the European structures and make the goods produced in the region more competitive.

[06] BULGARIAN-BRITISH SEMINAR

British consultants with international experience offered their assistance in power industry, transport, environment protection, construction, education, health care, employment and social protection at the Bulgarian-British seminar which started here today. The discussion under the motto "Success through Partnership" gathered in the Sheraton hotel more than 180 Bulgarian experts, company and department CEOs, among whom were Chairman of the Energy Committee Konstantin Roussinov and former Cabinet member Kiril Tsochev.

In the period of transition it is important to create a market environment in which the technical assistance of major international institutions as the British know-how fund will find application, Minister of Trade and Foreign Economic Cooperation Atanas Paparizov said in his opening address to the seminar. The participants were also addressed by British Ambassador here Roger Short.

The Government wants to decrease the losses caused by inefficiency and lack of restructuring, Minister Paparizov said. He described as significant the support which the Bulgarian companies may receive in the drafting of efficient business programmes. Bulgaria hopes to develop its legislation and create good environment for foreign investments by simplifying its administrative practice, the Trade Minister said. He assured the audience that the tax reliefs, promised by the Government for those who participate in the privatization and the legislation on the public servant will soon be moved to the Parliament.

In the afternoon the seminar continued with individual meetings of Bulgarian businessmen with the representatives of the British consultants, among which are the already well-known in Bulgaria and in the region "Power Consult", "Sir William Halcrow and Partners Ltd.", "Murz and Mcclellan," "British Nuclear Fuels," "Scott Wilson Kirkpatrick."

[07] BULGARIAN, EUROPEAN EXPERTS DISCUSS DRAFT LEGISLATION

The independence of electronic media, especially of the publicly- owned ones, as well as their financing must be protected by the future legislation on radio and television in Bulgaria, was the standpoint of the visiting media experts from the Council of Europe.

Werner Rumphorst, Martin Dumermut and Christoff Poirelle discussed today the Bulgarian draft legislation on radio, television and the BTA with experts of the parliamentary Commission on Radio, Television and the BTA. The talks were attended by representatives of the artists unions and of the national media.

The experts from the Council of Europe made certain remarks on the bill but it turned out that they had been familiarized with an older version of the document. The final version, which was approved a week ago, was not discussed today because no French or English translations of it were available. According to expert Svetlana Bozhilova, some of the remarks made by the European experts were useless because the latest version was significantly revised from the earlier one.

[08] ALMA FOUNDATION HAS GRANTED 20 MILLION LEVA TO HOSPITALS

Since its establishment Alma has extended 20 million leva to the branch and at present it has 24 million leva, Todor Vulchev, Chairman of the foundation's Management Board, said. Alma's revenues come mainly from the interests on the initial capital, Vulchev stated. Under the foundation's statute, this capital should be available in the beginning of every year, he added. Donations come mainly from abroad. According to Todor Vulchev, it is necessary to adopt an act regulating tax reliefs for donors from non-governmental organizations.

Holland joined the activities of Alma Foundation donating equipment for a field hospital. Together with the Know-How British Fund Alma drafts a project on the construction of a house for terminally ill.

[09] BULGARIAN EQUIPMENT PUT INTO ORBIT

The Priroda module is expected to dock with the Mir orbiting station on April 25 at 3.43 p.m. Bulgarian time. The Proton carrier rocket launched successfully from the Baikonur airport today and boosted into orbit the Priroda module. The module was made by the Russian Space Agency and NASA, the Bulgarian Airspace Agency specified.

[10] LAUDA AIR CAN OPERATE FLIGHTS WITHIN AUSTRIAN QUOTA

The Austrian private carrier Lauda Air can operate flights along the Sofia-Vienna-Amsterdam route, but only within Austria's quota, Transport Ministry officials responsible for aviation told their Austrian counterparts at a meeting today.

The meeting was prompted by Austria's ban on Balkan Airline's flying passangers from Vienna to Amsterdam. It was imposed after Lauda Air was refused to service the Sofia-Amsterdam route. According to the Bulgarian officials, flights along this route have already been distributed (Balkan Airlines aircraft has the right to fly six times and the aircraft of Austria's national carrier seven times); allowing Lauda Air to fly along the route would harm the interests of Balkan Airlines and impair the parity between the two countries. Under an effective agreement between Bulgaria and Austria, the fixed quotas can be redistributed only in case of need or insufficient capacity. At the moment Bulgaria's national carrier has the necessary capacity to servicing the route.

The Bulgarian side thinks that the best solution would be to distribute the existing Austrian quota for flights between the Austrian Airlines (AUA) and Lauda Air.

[11] BUSINESS PRESS

"Above all this come the interests for expansion of cooperation with all countries with whom we have established active relations," Minister of Trade and Foreign economic Cooperation Atanas Paparizov says, interviewed by "Zemya" on the fourth general meeting of the Association of Balkan Chambers which opened here yesterday. "After meetings with the business sides which are held by the chambers, we shall propose to organize sector meetings where we shall be able to work for cooperation and joint production, Paparizov says.

[12] FOREX MARKET REMAINS UNSTABLE, BANK SCAMS GO TO COURT

US dollars were sold at preposterous levels and a margin of 7 leva. Banks bought the equivalent of 13.65 million US dollars and sold the equivalent of 7.4 million.

The situation was further complicated after three financial houses failed to make payments under forward deals, which is symptomatic of bankruptcy. They were expected to pay 4 million US dollars to commercial banks. Dollars were offered at 85 leva by most foreign exchange offices.

The forex market is heading toward the point of equilibrium and the US dollar is likely to go as far up as 90 leva unless the National Bank of Bulgaria (BNB, the central bank) takes urgent measures. An unnamed senior banker reportedly told the private "Continent" daily that the BNB is sure to intervene the moment the dollar hits 90 leva. The deputy chief of the parliamentary budgetary committee and opposition MP Mouravei Radev yesterday warned the dollar will reach 100 leva by year's end.

Some dealers say the high US dollar levels are psychologically- motivated and a higher supply is likely to push the exchange rate down to 81 leva/1 US dollar. They also say such an operation would not shrink dramatically the central bank's foreign exchange reserves, currently standing at 703 million US dollars. Others believe the only way for the central bank to handle the situation is by raising the base interest rate.

Late last week the head of the BNB Foreign Exchange Operations Department, Stoyan Shoukerov suggested that the base interest rate be pushed up by 20 percentage points for a short time but the measure was rejected by majority of members of the BNB Governing Board. In early February the central bank raised the base interest rate from 34 to 42%, for the first time this year, to push it further up to 49% only a month later.

Financial experts believe the major cause for the sharp fluctuations of the dollar is the absence of tangible foreign exchange reserves. They also say there are only a couple of stable banks, that play fairly. "24 Chassa" quoted anonymous Finance Ministry experts saying that revision of the national budget is being contemplated in a view of the dollar hike.

No final decision has yet been taken about which bank will be closed down, "Douma" wrote quoting the Executive Director of the Bank Consolidation Company (BCC), Valentin Tsvetanov. The BCC is currently working on a scheme for restructuring the banking sector, and more specifically on the recommendations to that effect of the International Monetary Fund, the World Bank and the European Bank for Reconstruction and Development. The specific measures should be finalized in several weeks' time. With a view to this, commercial banks will be expected to submit their financial reports and audit findings to establish their actual condition.

It was announced yesterday that legal proceedings have been launched against the culprits for the failure of the Plovdiv-based AgroBusinessBank, which the BNB bought for one lev late last year. According to unofficial information, atop the list of defendants facing office abuse charges are former CEO Hristo Alexandrov and former Supervisory Board member Hristo Danov, suspected of having funnelled sizable bank funds into their private firms.

The ex-chief of the Sofia branch of the State Savings Bank, Stoyan Agov, also stands trial. He is accused of extending over 55 million leva in unsecured loans in January 1991 - May 1992, adding up to a total of 91 million-plus interest included. The loans were extended without the necessary written application and motives required in such cases. Agov is also accused of embezzling 230,000 leva state funds through series of transactions with bonds. The defendant admitted to doing everything he is accused of, but said he was not aware he was breaking the law. These offends carry a maximum of 30 years in prison.