MILS NEWS 07/03/96

From: "M.I.L.S." <mils@MILS.SPIC.ORG.MK>

Macedonian Information Liaison Service Directory

CONTENTS

MILS NEWS

Skopje, 7 March 1996

[01] TITO PETKOVSKI - A NEW PRESIDENT OF THE MACEDONIAN PARLIAMENT

Five representatives from PDPA and NDP have voted against, and 29 members of the Liberal Party had been restrained.

According to the newspaper " Vecer" , one liberal (Dragan Mitevski) voted for Petkovski also, which had come as a surprise. The choice of Petkovski followed after the resignition of the former President of the Assembly, Stojan Andov.

[02] VANCE SUGGESTS THE NAME "NEW MACEDONIA"

Thus, as Agency "Makfaks" is reporting from Athens, was said by the spokes-man of the Greek Government, Dimitris Reppas, which confirms the information broadcasted by the most popular Greek Private TV "Mega", the day before yesterday. The pro governmental newspaper "Ta Nea" coments that the new name is practically accomplished matter, pointing out that "now, there will be political forces and people who will express a disagreement, among the ruling parties and the opposition."

Greek TV "Mega" reports from Washington that Cyrus Vance had informed that the complex name is accepted by the President Gligorov, for whom, as being said, this name is nevertheless, the best solution among the other suggested names.

According to Athens News Agency, Greek Foreign Minister Theodoros Pangalos said yesterday that Greece and FYROM both persisted in their respective positions regarding the name issues. Briefing the parliamentary Foreign Affairs Committee, Pangalos announced that delegations of the two countries would meet on April 14 with UN mediator Cyrus Vance for negotiations. If agreement was not reached, he warned, there was a possible that Vance would turn in his mandate as mediator and Skopje could be recognized with the name it used in its Constitution, and the temporary name FYROM dropped completely.

On the other hand, Greek Government spokesman Dimitris Reppas said that dialogue on the name issue was still in progress. He added that a round of talks had been completed and the submission of conclusions drawn by Vance was now awaited, adding that there was no time limit within which the UN mediator was obliged to submit his proposals. Reppas clarified that no proposal had so far been put to the Greek side concerning the possibility of a composite name (i.e. including the designation of 'Macedonia').

Replying to questioned, Reppas did not rule out the convening of a meeting of political party leaders but linked it to the final stage of the process. 'That is if a final decision is imminent and if the shaping of a national front is necessary in order to give Greece's reply and not just the reply of the government,' the spokesman said.

[03] GREECE- NOT INFORMED ON THE MILITARY EXERCISE IN MACEDONIA

[04] MACEDONIAN EMIGRATION IN AUSTRALIA- A POSITIVE FACTOR IN THE COOPERATION

The Ambassador Cambell, had emphasized that his appointment is a turn over in the Macedonian-Australian relations. 150.000 Macedonian Australians, as Cambell said, have made a great effort, to keep the Macedonian culture and the language and had contributed a lot to the Australian multicultural society. Diplomatic relations on Embassy level represent a challenge in order to enroll the core of the relations in all the spheres, in a sense, as Cambell added, will be able to be achieved with the impressive reform program that the President Gligorov and the Macedonian Government had started.

The extraordinary and plenipotentiary Ambassador of Australia in Macedonia, Noel Cambell, was also received by the President of the Macedonian Government, Branko Crvenkovski, when certain views considering the questions of the bilateral cooperation were exchanged. The present situation in Macedonia and the region, as well as the relations of Macedonia with its neighbors, were also discussed.

The Ambassador Cambell also met the new President of the Macedonian Parliament, Tito Petkovski, who had acquainted the Ambassador with the development of the democratic processes in Macedonia, and also with the work of the Parliament in preparing and bringing into power the Law regulation.

[05] THE LAW ON IDENTITY CARD WITHOUT ANY CHANGES

The Court will not process this question, because it considers such constitutional solutions are not into collision with article 7, paragraph 1, from the Macedonian Constitution. The Court, also considers the Macedonian language and the Cyrillic writing as official ones and provided into the identity card and the files in possession.

The record of the personal name of the members of the nationalities in their own language, aside from the record in Macedonian language, actually represents a transcription of the personal identity of the citizen, the Court explained.

[06] THE DESTINY OF THE 25 LOSS MAKERS STILL UNCERTAIN

The problem is the ex-accounts payable, actually now a starting capital and the question is whether they are in the structure of the enterprise or they would be out of it.

The solution of the question hasn't been reached so far, but at the same time some work is being done on the criteria of the way and the conditions for selling the established starting capital to the State. It's mostly done because of the great interest in the model and throughout of it, ransom from the employees, i.e. the managers to ransom that part of the starting capital and to provide a dominant presence in the structure of the capital. Anyhow, the opinions from the Agency of Privatization are expected by the end of March, in relation of the achieved programs for owners transformation.

[07] THREE MACEDONIAN FOOTBALL CLUBS IN EUROPE

MILS SUPPLEMENT:

[08] Total Eclipse Flags New Era

('Central European', February 1996)

Part I

For Macedonian companies, the news could not have come sooner. Before the blockade two million tones of goods a year were rail-freighted to and from Macedonia through Greece's northern port of Salonika. During the blockade, Macedonian companies had to truck goods along mountainous roads to the ill-equipped port of Durres in Albania, or to the Black Sea port of Burgas in Bulgaria. The journey to Burgas is four times as far as that to Salonika, and lorries also spent days stuck at the Bulgarian border. However, although the end of the embargo is very welcome news, bureaucratic difficulties mean that exporters are finding Salonika is not so convenient a conduct as it used to be.

'Greek customs officials are making life difficult for Macedonian exporters,' says Milan Hrovat, vice-president of the Macedonian Chamber of Commerce. 'The word Macedonia is prohibited from appearing on railway carriages crossing the border, but Greek border officials claim not to have the stickers to cover it.' In addition, goods have to be marked with EU certificates of Origination, and ethnic Greeks born in Macedonia are prevented from traveling in Greece.

Salonika is more expensive than before the embargo. Tariffs on goods crossing the Greek border have doubled and rail prices have risen sharply, making Salonika two-and-a-half times dearer than the Bulgarian port of Burgas. The national currency, the denar, has strengthened pushing costs up.

'Before the embargo, there were 47 denar to the dollar,' says Svetozar Vasileski, president of the board of directors of Skopje Steel, Macedonia' giant steel producer. 'Now the rate is closer to 37. We pay transporters in denars, and receive dollars for our exports.' It costs Skopje Steel $30 to get a tone of steel to Salonika which is comparable to the cost shipping it to from Salonika to the USA.

The lifting of UN sanctions on Serbia has been another mixed blessing. Macedonia will benefit from renewed access to the markets of Croatia, Bosnia and Serbia, countries which once bought 60% of its exports. But a 30% trade barrier imposed on Macedonia by Serbia soon after the lifting of UN sanctions has eradicated the free trade zone that existed between the federal Yugoslav states since 1918.

This was an unexpected blow, but the tariff will at least force Macedonian exporters to attack new markets. As a result of the new world and regional order, former Yugoslav countries are no longer a logical-point for Macedonian products. 'Serbs want to by from western Europe and sell to Macedonia and Greece in the south, not vice versa,' says Linda Gregory, resident representative of USAID in Skopje.

'The great benefit of the lifting of sanctions is the opening up of rail links to Germany. This opens up the whole west European market.'

Despite the reservations of Macedonian exporters who are still coming to terms with the post-sanctions world, the opening of borders has to be regarded as positive. 'If the borders stay open and costs remain reasonable, there will be a great boost to the Macedonian economy,' says Alberto Eguren, acting resident representative of the World Bank in Macedonia.

For Macedonia the challenge is to take advantage of opportunities that lie beyond its reopened borders. If it is to succeed, the painful restructuring of its domestic economy must continue.

In certain respects the worst is over. The macro economy has now stabilized, with inflation coming down from about 2,000% annually in 1992 to 18% in 1995. The national currency, the denar, is stable. It rose against the dollar for several months before the reopening of the Greek border created a temporary demand for foreign currency. And Macedonia is expected to experience economic growth for the first time this year after five years of sharp decline.

A three-step overhaul of Macedonia's once chronically depressed banking sector is close to completion. The project, undertaken in conduction with the World Bank under its $85 million financial and enterprise sector adjustment credit (Fesac), began in April last year.

In step one, the government took over responsibility for the bad debts of Stopanska Banka, which, with 65% of banking assets, is Macedonia's largest bank. A Bank rehabilitation Agency (BRA) was established to take charge of the bank's non-performing loans. Macedonian banks had hard currency debts to Macedonian citizens and foreign financial institutions which Serbia sequestered from their accounts at the National Bank of Yugoslavia in 1991. These, too, have been assumed by the BRA. The agency has issued zero-coupon discount bonds which replace bad debts on the bank' balance sheets.

In step two, Stopanska Banka was broken up and separate licenses were given to each of its five branches in Bitola, Kumanovo, Ohrid, Prilep and Tetovo. 'We wanted to create greater competition in the banking sector,' says Tome Nenovski, deputy governor of the national Bank of Macedonia (NBM).

Step Three of Fesac - privatizing Macedonia's banks, is now underway. Under socialism, the banks were locked into incestuous relationships with the country's industrial companies, which were both shareholders and the largest borrowers. 'These complex relationships are now being unwound,' says Rudi Lazarevski, managing partner of Coopers & Lybrand in Skopje. "Banks are being privatized by proxy.

As the companies that founded them are privatized, their share holdings in the banks convert from state to private capital.' If 50% of one of the companies holding shares in Stopanska Banka is privatized, 50% of its shares in Stopanska will also become private.

(to be continued)

(end)

mils news 07 March '96