News from Bulgaria / May 9, 96

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

Bulgarian Telegraph Agency Directory

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

9 May, 1996

CONTENTS

[01] PRESIDENT ZHELEV MEETS WITH ACCT SECRETARY GENERAL

The Head of State supported the protocol for cooperation between Bulgaria and ACCT, the only government structure promoting the Francophone movement, apart from Francophone summits, Raina Karcheva, the president's European integration advisor, said after the meeting.

The President approved the Bulgarian priorities of ACCT programmes listed in the protocol, urging programmes that would promote contacts among young Francophones. He expressed satisfaction with the ACCT commitments to Bulgarian projects, such as a scheme for development of renewable energy sources worked out by Bulgarian scientists and projects for a national centre for correspondence education and for providing textbooks and teaching aids for the study of French.

Roy said he was pleased with his visit and the agreements reached. According to Karcheva, he was impressed by the European orientation of Bulgarian foreign policy. The guest said the ACCT was ready to organize round tables on democratic government involving Francophone nations.

[02] P.M. VIDENOV MEETS IMF OFFICIAL

Speaking to journalists, the IMF official said he believes the Bulgarian government has taken the right direction and is ready to launch measures that will have a lasting effect and will help Bulgaria get out of this difficult situation. He also said that loss-making companies should be urgently closed down, and that the Bulgarian Prime Minister fully shares this view.

Mr Wijndholds believes that Bulgaria stands good chances to sign a fourth standby agreement with the IMF and the World Bank. He said the final result will be clear after the negotiations due next week, but in his capacity as Director for Bulgaria, he personally pledges to do his best that the sides reach an agreement.

Zhan Videnov voiced his conviction that the Bulgarian stand is met with understanding by the international financial institutions and particularly the IMF, which is aware of the actual situation in this country and recognize the readiness of the government and the central bank to take decisive measures for overcoming the difficulties. Videnov believes that if these measures are taken in due time, the international financial institutions are ready to provide assistance for their successful completion.

Bulgaria is in need of assistance mostly in the sphere of the structural adjustment and the balance of payments this and the coming years, when Bulgaria is due to make over USD 1,000 million external debt payments annually, said the Prime Minister. The most pressing problems are now the huge losses of the real economy and their painful transfer onto the banking system, said Videnov. He believes that taking decisive steps, Bulgaria will have not only the support of its international partners, but the capacity to handle the balance-of-payments problems on its own.

Dwelling on the need to liquidate loss-makers, the Prime Minister enlisted several relevant problems, including the payment of overdue wages and pension contributions to the social security fund. The compensations provided for by the law for the staff of companies facing closure, should be paid 100% and additional financial stimuli should be sought for the speedier closure of losing enterprises, said Videnov.

The preparation for signing a standby agreement with the IMF topped the agenda of a meeting between this IMF Executive Director and Bulgarian Deputy Prime Minister Roumen Gechev today, said the government press office.

Mr Wijndholds reiterated the IMF support for the action taken by the Bulgarian government in the structural adjustment of the real economy and the banking system. He reportedly said the standby agreement can be signed by mid-July in case all prior agreements are met.

[03] FOREIGN MINISTER PIRINSKI MOTIVATES BULGARIA'S APPROACH TO REGIONAL SECURITY

He added that he had meetings with his counterparts from Romania, Turkey, Denmark, Germany and Britain, briefing them on the results of the May 3 meeting of the political directors of the foreign ministries of the countries invited to the Pan-Balkan foreign ministers' forum. Pirinski said that he and his Romanian counterpart had reached an agreement to activate their countries' efforts for resolving the problem of constructing a new bridge across the Danube.

Defence Minister Dimiter Pavlov said that Bulgaria could take part in WEU humanitarian and peacekeeping operations. He observed that considering the lesson drawn from the European operation in the former Yugoslavia, the defence ministers of the 27 WEU member-states reached the conclusion that the interaction among NATO, the WEU and the participants in the Partnership for Peace process is a model of Europe's future security architecture.

[04] PARLIAMENT PASSES STATE PROPERTY ACT

The act passed by Parliament today regulates the acquisition. management and disposal of state immovable property. It regulates the management of state property, the disposal of private and state property, alienation of property for the needs of the state and supervision and registration of property.

The act provides for the alienation of property for state needs only if these cannot be met in any other way and following prior equal value compensation. The act provides for the management and disposal of movable and immovable state property to be supervised by the Minister of Finance. The act provides for strict sanctions for misappropriations of state property.

[05] PROGRESS OF MASS PRIVATIZATION

[06] ANNUAL MEETING OF ASSOCIATION OF COMMERCIAL BANKS

"Continent" quotes an unnamed boss of a bank in Sofia as saying that it is quite possible for Bulbank to withdraw from ACB. The paper writes that after the meeting certain bankers expressed their discontent with the fact that at the discussions the banks were divided into private and state-owned, small and big, profitable and loss-making.

"Continent" and "Pari" write that the ACB Management Board has three new members: Oleg Nedyalkov, Chairman of the Management Board of United Bulgarian Bank, Evgeni Goranov, Chief Executive Director of Credit Bank and Georgi Tomov, Vice President of State Savings Bank.

[07] LEV TAKES A PLUNGE AGAIN

"Trading is very sluggish and an amount of around $500,000 can sharply swing the rate one way or the other," Post Bank dealer Ivaylo Bouyoukliev told "Daily News". He said in just 15 minutes today the dollar jumped 15 leva. Bouyoukliev ruled out a speculative rise, believing that demand for dollars is real. He said the crisis was precipitated by the behaviour of the central Bulgarian National Bank (BNB) and the Government, which did not take any steps to defuse the situation. The dealer predicts that if the BNB does not urgently intervene, the dollar may soar above 160 leva by Thursday noon. He does not think a new rise of the base interest can have any impact on the forex market.

The BNB Governing Board will meet tomorrow to discuss its response to the dollar rise, BNB Governor Lyubomir Filipov told journalists at the Council of Ministers today. With its options limited, the bank will probably consult Anne McGuirck, Mission Leader for Bulgaria of the International Monetary Fund (IMF), whom Filipov meets tomorrow morning. "It is important not to behave like an bull in a china shop, which is what some are trying to force us to do," Filipov said. He said the dollar equivalent of the average wage in this country is still higher than two years ago. "So nothing extraordinary has happened." Filipov agreed that the situation is not pleasant, putting it down to the insufficient competitiveness of the Bulgarian economy in the last two years.

"It is difficult to determine the admissible band within which the currency should be moving. In the economy, one does what is possible and not what is desirable," the BNB Governor said. "We cannot stop the dollar from rising. The question is, at what price and for how long. This is what the BNB Governing Board should analyse," he went on to say.

The central exchange rate for tomorrow is 112.84 leva to the dollar, up from 103.32 today. BTA correspondents nationwide report a drastic rise, by some 50%, in the prices of imported goods, especially electric appliances. At some places, wholesale has been suspended. Today's leap of the dollar is no reason to speak of hyperinflation, according to Velichka Rangelova, an experienced price expert with the National Statistical Institute. She recommended a hike of the base interest rate to 100%.

[08] MILITARY CONTACTS BETWEEN SOFIA, BELGRADE

[09] INTERNATIONAL CENTRE FOR ORGANIC FARMING SET UP IN SOFIA

The international centre will organize scientific studies and will participate in such studies with representatives and will also conduct research work. Exchange of national and international experience in farming are among its other lines of operation.

According to figures of the Agriculture Ministry, contaminated soils have been registered in 102 land use areas in 21 municipalities. The areas contaminated by heavy metals are 33,600 ha and those contaminated with oil products, about 280 ha. Alkalized soils are of a total area of some 530 ha.

The Agriculture Ministry with the financial assistance of the United Nations Development Programme (UNDP) to the amount of 315,000 US dollars developed in late 1994 a national management and information system for the contaminated lands in Bulgaria. The owners of contaminated lands are given certificates with data about the type and the degree of contamination of the crops, which may be grown in these areas.

Bulgarian and US experts working on a project for management of hazardous waste in Bulgaria since the beginning of the year found out that ferrous and non-ferrous metallurgy are the ones accounting for the greatest deposits of hazardous waste. 90 per cent of the waste is accumulated at 30 of the largest Bulgarian enterprises.

An average 14.2 million t of heavy metals, ore waste, fertilizers and other waste are being dumped in Bulgaria every year, the largest part of about 13 million tonnes being from processed ore. Bulgaria has not yet offered any encouragement for cutting down on waste through recycling or increasing production efficiency.

Some 80 per cent of the waste is stored in special depots, another part goes to the city dumps and a third part is processed. Before being dumped, however, the waste is not processed, destroyed or made safe. Bulgaria still has no industry sector to trade in the processing of hazardous waste.

[10] IMF'S McGUIRK ARRIVES IN BULGARIA

Ms McGuirk said the IMF experts will have two weeks of talks on the macroeconomic programme of the government, including the structural adjustment of the real economy and the banking system, which, she said, is nothing new. We will continue to work with the government as before, said she.

The IMF identifies a progress in the plans that are being contemplated while the launch of specific steps is being sluggish. Ms McGuirk said this problem will be in the focus of attention of this mission of the IMF.

The IMF is not familiar with the details of the Bulgarian government's programme, said this IMF official. She said the IMF has not yet been acquainted with the list of state-owned companies facing liquidation. The IMF is predominantly concerned over the deadlines for implementing the measures for the structural adjustment and rehabilitation of the public production sector and banking, said Ms McGuirk. She believes a consensus on this issue should be reached before the standby agreement is signed.

The IMF mission's agenda also includes the government's budget intentions. Anne McGuirk said the IMF approval is another major precondition for the signing of the standby agreement. The economic and political situation in Bulgaria has changed tangibly since the previous IMF mission here, said she. The steep appreciation of the US dollar is indicative of an insecurity in the government policy that could be overcome if the cabinet takes the decisions it is expected to, said Ms McGuirk. She said the IMF will concentrate on the economic parameters but radical political changes are likely to affect the negotiations.

Bulgaria became IMF member is 1991. It has a quota of 310 million SDR equal to 424 million US dollars. In 1991 this country received USD 365 million under its first standby agreement. The second lending agreement for USD 212 million, expired in February 1992. In 1994 the IMF approved a third loan of some USD 500 million. Last year was the first in which Bulgaria failed to get a lending agreement.

[11] NO OBSTACLES TO SIMEON II'S RETURN TO BULGARIA

Simeon's foreign-travel passport was not extended by the Foreign Ministry because he did not have a standard public registry number, Foreign Minister Georgi Pirinski said at Question Time on May 3. His passport, issued in 1991, expires on June 11. Now that this obstacle has been removed, Simeon II can be issued with a valid document for his visit to Bulgaria, sources from Sofia's city hall said.

The Foreign Ministry denied allegations of foot-dragging and stated last week it would not create any difficulties. The Government recently stated it expected Simeon II to declare his loyalty to the effective Constitution and the form of government. But this is not a precondition for the extension of his passport or for his right to return, it is a wish, Foreign Minister Pirinski said later.

The visit was announced after 101 Bulgarian intellectuals invited Simeon II to Bulgaria last November. In his reply in December he officially stated his intention to return. Later on it became known he had said he would buy a single ticket. This prompted some newspapers to claim that Simeon was returning for good, while others said he would be running for President this autumn.

"The King has no intention to claim the throne or change the form of government in Bulgaria. He is not a guest, he is coming back home," Galya Dicheva, head of the royal press office in Sofia, said recently commenting press reports. This is a private visit which should not be politicized, the press office said repeatedly in response to speculation about the visit.

Many politicians and businessmen want to meet with Simeon II during his visit. Some have already done so in Madrid. Democratic Party leader Stefan Savov and Ahmed Dogan, leader of the Movement for Rights and Freedoms, were among the first to visit Simeon in Madrid. In 1992 President Zhelev also met with him.

Hundreds of invitations and requests for meetings were sent to Simeon II over the last few months. Parliament Chairman Blagovest Sendov hopes to have dinner with him. President Zhelev will also receive him. "Out of respect for history I will meet with Simeon Coburg-Gotha because he is part of Bulgarian history," President Zhelev said. "It is no secret that I am a republican and have sworn loyalty to the republican Constitution, but the republic must respect its past," he said.

Simeon II will not be the first member of the royal family to visit Bulgaria. His sister Marie-Louise was here in May 1991 and then accompanied the Queen Mother in August 1993 when the 50th death anniversary of her husband King Boris III was commemorated.