Bulgarian Telegraph Agency (BTA), 97-03-06

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From: Embassy of Bulgaria <bulgaria@access1.digex.net>

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

6 March, 1997

CONTENTS

[01] STATE DEPARTMENT OFFICIALS PLEDGE ASSISTANCE TO BULGARIA

[02] WORLD BANK READY TO RELEASE THREE LOANS

[03] DIPLOMATIC CORPS TO BE CUT BY THIRD

[04] CARETAKER GOVERNMENT REPORTS TO PRESIDENT

[05] PM SOFIYANSKI: BULGARIA-IMF AGREEMENT WILL BE A SIGNAL FOR THE OTHER FINANCIAL INSTITUTIONS

[06] ON BULGARIA'S NATO MEMBERSHIP

[07] BULGARIA, DENMARK: MILITARY COOPERATION

[08] KOZLODOUI N-PLANT SAFE

[09] ASSAREL MEDET SHARES TO BE QUOTED ON LME

[10] HOUSEHOLDS TO RECEIVE SUPPORT UNDER EU PROGRAMME

[11] ENERGY MINISTER MEETS RUSSIAN, U.S. AMBASSADORS

[12] BUSINESS EXPANDS WITH CENTRAL EUROPE

[01] STATE DEPARTMENT OFFICIALS PLEDGE ASSISTANCE TO BULGARIA

"We discussed at length Bulgaria's prospects in the light of the decision of the Bulgarian government to state the country's desire to join NATO," said Agov. "We agreed Bulgaria will need strong encouragement at the Madrid summit in July," he said. Perina assured him that approval of the decision by NATO circles had led to placing the country on an equal footing with the potential NATO members of Central Europe.

A delegation of high-ranking American officials is expected in Sofia in mid- March to find out the fastest way to help Bulgaria back to its rightful place in the Central European political and economic reform process, it became known after Agov's meeting with Frederic Smith, Deputy Under Secretary for European Affairs and NATO. Smith reassured Agov the U.S. administration would provide material and expert assistance to help Bulgaria make up for lost time in the last four years. The sides established they held identical views on strategic issues of European security, including relations between NATO and Russia, whose position on NATO enlargement has made progress, according to Perina and Smith.

President Stoyanov's message will be conveyed to President Clinton's special adviser Daniel Fried at the White House on Friday. The Bulgarian officials are sounding the ground for a visit to the US by President Stoyanov later this year.

[02] WORLD BANK READY TO RELEASE THREE LOANS

The World Bank representatives came up with a programme for assistance to Bulgaria in 1997 aimed at overcoming the critical shortage of grain, medicines, vaccines and some basic foods, as well as at supporting the structural reforms due to be realized in 1997-1998.

The World Bank is ready to release to Bulgaria three loans:

- for the critical import of certain goods of extreme necessity to the amount of some 20 million US dollars. The loan may be received already in April.

- for social assistance worth 50-80 US dollars. The first tranche of this loan may be expected in June and the second one, by the end of the year. This loan will directly support the state budget on the basis of an agreement and at the same time will be used to improve the social insurance network.

- for a financial reform and for reform in the enterprises adding up to at least 170 million US dollars, the news release says.

[03] DIPLOMATIC CORPS TO BE CUT BY THIRD

[04] CARETAKER GOVERNMENT REPORTS TO PRESIDENT

The grain crisis was one of the main issues discussed at the meeting. Sofiyanski assured the President the cabinet has taken steps to ensure grain supplies until the next harvest. He said 100,000 t of Polish wheat, whose import was arranged by Stoyanov last week, are on their way to Bulgaria. The first amounts of 3,000 t of cost-free aid from Switzerland arrive tomorrow.

The Prime Minister informed the President of the progress of negotiations with the International Monetary Fund (IMF) on a standby agreement. Stoyanov called for a speedy finalizing of the agreement. The framework of the arrangement will probably be ready tonight, Stoyanov said after the meeting with the President. He stressed the need for all political forces in the country to support these negotiations. IMF Mission Leader for Bulgaria Anne McGuirk has been here for two weeks, negotiating on the parameters of the arrangement.

President Stoyanov called for transparency in privatization deals to be carried out by the cabinet and transparency when replacing managers of state-run companies. "State-owned companies should be managed by people who can operate in a market environment, who do not steal and are not corrupt," President Peter Stoyanov said, quoted by his press office. According to the President's press office, Stoyanov said the cabinet should seek to finalize privatization deals worked out according to the rules, and end old-boy buyouts.

Financial stabilization was another topic on the agenda of the President and the ministers. Sofiyanski denied the strengthening of the lev was due to administrative measures. The reason for the strengthening of the lev is slower trading, according to Sofiyanski. When the caretaker cabinet took office, the lev fell to 3,000 to the dollar; it is now trading at about 1, 500 to the dollar. "We are close to long-term financial stabilization," Sofiyanski told reporters.

The Prime Minister also said at its meeting Thursday, the cabinet will take measures to combat profiteering. "The word 'profiteering' does not belong to the lexicon of market economy and should not be used to ruin small and family businesses," said the Head of State.

The cabinet took steps against profiteering during its first days in office. Economic police have been inspecting shops and wholesale markets in the last three weeks, fining lawbreakers. It strengthened border controls to stop large-scale imports of fuels and foods.

During the three weeks since it took office, the cabinet took urgent steps to resolve the grain crisis. It unblocked the entire national reserves of 80,000 t of wheat (excluding wartime reserves), freed the buying price of wheat, and okayed the import of 35,000 t of wheat (of 450,000 t needed) in return for grain from the next harvest.

[05] PM SOFIYANSKI: BULGARIA-IMF AGREEMENT WILL BE A SIGNAL FOR THE OTHER FINANCIAL INSTITUTIONS

Sofiyanski said the negotiations has so far shown that both sides are willing to work together. He also said Bulgaria does not always agree unconditionally to what the IMF suggests. One of things the interim administration refuses to accept is a price shock, including bread for which a scheme will be adopted to use the markup for bread subsidies for the poor.

"I do not mean to insult the colleagues of the IMF but the problems of the domestic market are somewhat alien to them and therefore I believe that a price shock with the huge state apparatus we have in the Bulgarian economy is unacceptable right now," said Sofiyanski.

The government is currently working on a long-term programme aiming at reduction of the internal debt, stabilization of the banking and financial system, restructuring of the economy through sweeping privatization, liquidation of loss-makers and step-by-step liberalization of prices.

Prime Minister Sofiyanski believes a Bulgaria-IMF agreement will be a signal for other international financial institutions and foreign investors. "The price of Bulgaria, so to say, is going up now," said he. He believes the approval rating of the country is going up and so does the price of Bulgarian Brady bonds and the interest of foreign investors in Bulgaria.

Bulgaria's future development depends directly on one single agreement with the IMF, the interviewee said in conclusion.

[06] ON BULGARIA'S NATO MEMBERSHIP

He recalled that this position has resulted in the fact that NATO is considering Bulgaria's candidature on equal grounds with those of the other Central and Eastern European states, which have applied for NATO membership, and will not subject to discrimination any of the applicant states.

Bulgaria is working actively to prepare its accession programme, which the Council of Ministers assigned to experts of the ministries of foreign affairs and of defence.

Our talks with the North Atlantic union will start in mid March and are supposed to end by the end of April, Mr. Bonchev said.

[07] BULGARIA, DENMARK: MILITARY COOPERATION

The Danish delegation also visited the "blue helmets" training centre in Karlovo (central Bulgaria) and the Rakovski military academy in Sofia. He held talks with Deputy Foreign Minister Konstantin Glavanakov and senior General Staff and Defence Ministry personnel, the Defence Ministry Press Office said.

[08] KOZLODOUI N-PLANT SAFE

Upgrading operations of the plant's 1,000 megawatt units 5 and 6 are also at hand. They will be conducted under a special programme which is worked out by experts of the nuclear power station, Energoproekt and the Russian Riskinzhenering and has been approved by IAEA. The bid of the European consortium Siemens-Framatom with the participation of Russia has been accepted for the realization of this programme, Mr. Hristov specified.

The new leadership of the Committee has suggested that this institution is placed either under the Prime Minister or some of his deputies, rather than in the system of the Energy Ministry. Mr. Hristov sent this suggestion in writing to Prime Minister Sofiyanski on Wednesday. Under the international standards the Committee is supposed to be an independent body.

Since 1991 experts of the International Atomic Energy Agency (IAEA) have been inspecting on a regular basis the condition of the equipment and the level of exploitation of the Kozlodoui N-plant. According to their estimates, the plant is safe and may be operated, the plant's manager Kiril Nikolov said last Thursday.

The N-plant in Kozlodoui provides 50 per cent of the electricity for the country and has 6 units of 3,760 megawatts total capacity.

[09] ASSAREL MEDET SHARES TO BE QUOTED ON LME

Assarel will export 100,000 t of copper cathodes worth 26 million dollars to Hungary. Polish businessmen showed an interest in forthcoming bidding for concessions for Bulgaria's mining industry. Czech capital will be invested in a joint glass-making company, said Tsotsorkov, who was on the business delegation accompanying President Stoyanov on his Central European tour.

[10] HOUSEHOLDS TO RECEIVE SUPPORT UNDER EU PROGRAMME

The EU assistance that Bulgaria will receive is double the allocations envisaged for the system of social welfare in the 1997 budget bill, Deputy Minister of Labour and Social Affairs Evgenia Spassova told a news conference on Wednesday.

The aid will go to 500,000 low-income households and 572 social establishments accommodating 63,000 children, as well as ill, disabled and old people. This kind of social assistance will be supplementary and will not replace the existing schemes of supporting the poor.

The assistance will be provided for a period of four months and the first payment will be made on March 25. It will be granted to households, which already receive support for their energy, fuel and water bills and which currently number 469,000. All who need such aid, however, may apply at the municipal centres for social welfare, where their applications will be considered.

An interdepartmental council, including ministers from the social, health, education and finance ministers and three representatives of non- governmental organizations will be formed to exercise control over the distribution of the funds.

[11] ENERGY MINISTER MEETS RUSSIAN, U.S. AMBASSADORS

Later on Wednesday the Energy Minister had a meeting with U.S. Ambassador to Bulgaria Mrs. Avis Bohlen. Mrs. Bohlen raised issues related to the results from the tests on Kozlodoui's unit one and the intentions about the plant's operation. Minister Stoilov explained that a comprehensive study of the plant is going to be conducted and made public which, however, does not underrate the significance of the plant in the country's power grid. The Minister also confirmed the necessity of realizing the programme for upgrading the plant's units 5 and 6. Mrs. Bohlen expressed the readiness of the US Government to support Bulgaria in the realization of the priorities of the energy policy.

[12] BUSINESS EXPANDS WITH CENTRAL EUROPE

Balkancar Holding signed a deal for the export of 950 industrial trucks to the Visegrad countries worth a total $13.5 million. The private Tomishow will export to Hungary tooth paste worth $150,000.

Bulgarian shoe maker Pexim will bid for a contract to supply the Hungarian army with canvass shoes and will import from Poland 190,000 pair of shoes for construction workers, Danev told the press conference.

The Czech Pilsen Group has shown interest in the privatization of Madara and Shoumensko Pivo in Shoumen, Danev said. The group offered support in the construction of the Belene nuclear plant on the Danube (frozen for five years) and the renovation of Sofia's street car fleet. Bulgaria and the Czech Republic signed preliminary documents on a framework agreement for the establishment of a Bulgarian-Czech chamber for the promotion of joint business. Czech investors are seriously interested in expanding joint banking, according to Danev.

"The contracts signed are a sufficient indicator of the good will of both sides and the desire to return to traditional markets. The delegation's composition was in line with the intentions of the caretaker and future cabinets, including representatives of five state- run companies, three of which undergoing privatization, and 13 fully private firms," Danev told national radio on Tuesday.

"We should not forget Bulgaria should think of its economic expansion as well as integration into European structures. [...] We should focus a lot of effort on changing product lists and restructuring the economy in general, if we want to adopt European values," he told the radio.

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