News from Bulgaria / Mar 22, 96

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

Bulgarian Telegraph Agency Directory

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

22 March, 1996

CONTENTS

[01] PRESIDENT ZHELEV on the DUMA VOTE TO RESURRECT U.S.S.R.

[02] DECLARATION BY GOVERNMENT SPOKESMAN ON RUSSIAN POLICY

Sofia, March 21 (BTA) - The Government of the Republic of Bulgaria is pursuing a policy of consistent development of relations with the Russian Federation on an equal basis in the political, economic and other spheres of mutual interest. The resolution of the Russian State Duma of March 15, 1996 has no legal force and will not influence this policy, according to a declaration read by the spokesman of the Bulgarian Government today. At the same time this resolution has already provoked a number of questions referring to international relations. It establishes preconditions for casting doubt over a number of multilateral and bilateral agreements signed after 1991, and may reflect on various spheres such as European security and the international legal personality and capacity of the newly independent states, the Bulgarian Government spokesman said. The declaration points out that the present trends of integration and cooperation are acquiring ever greater importance both at European and at regional level, and the mechanical transfer of formulas from the past is not the road to their realization.

A high-ranking delegation of the Russian State Duma is expected to visit Bulgaria on March 25. The Bulgarian Government views this visit as a new step in bilateral relations in conformity with the principles of mutual respect, constructive interaction and cooperation.

[03] BULGARIA'S POSITION ON VISA BLACKLIST MEETS UNDERSTANDING

Sofia, March 21 (BTA) - For the first time Bulgaria's position on the EU visa "blacklist" met with understanding at a EU Council, said Justice Minister Mladen Chervenyakov and Interior Minister Lyubomir Nachev when they returned last night from a joint meeting in Brussels between the EU Justice/Internal Affairs Council and the justice and interior ministers of the Associated Countries of Central and Eastern Europe. At the forum, the Bulgarian ministers asked for the speedier dispatch of experts to Bulgaria to consider comprehensively the visa problem with a view to its possible elimination, as well as for a political decision on Bulgaria's removal from the black list, Mr Chervenyakov said. Tightened border controls, streamlined immigration policy and interdiction of the traffic in stolen cars, guns and strategic raw materials and of illegal emigration are the actions recommended to Bulgaria in a report of a European Commission envoy to ten of the Associated Countries, Mr Nachev said.

[04] GERMAN PRESIDENT ROMAN HERZOG: "BULGARIA HAS ITS PLACE IN EUROPE

Sofia, March 21 (Iva Toncheva of BTA) - "There are no significant political problems between Bulgaria and Germany," German President Roman Herzog said at the end of his official visit to Bulgaria. "Our relations have been friendly by tradition and continue to be until today," Mr Herzog said, stressing Germany's support for Bulgaria's aspirations for full EU membership.

During his first official visit here as president Roman Herzog conferred with Bulgarian President Zhelyu Zhelev and had meetings with Prime Minister Zhan Videnov, attended by Foreign Minister Georgi Pirinski, National Assembly Deputy Chair Nora Ananieva, representatives of the opposition, intellectuals, students. He also addressed the Bulgarian National Assembly. Bulgaria's efforts to gain full EU membership, NATO's enlargement, the current state and the prospects for the Bulgarian-German relations, the possibilities for attracting more German investments, the safety of the N-plant in Kozlodoui were the highlights of Mr Herzog's talks in Sofia.

At a news conference today Roman Herzog said he expects the talks in Sofia to give impetus to the Bulgarian-German relations and Bulgaria to receive greater attention by the German public and media.

Bulgarian President Zhelev stressed the importance of the visit of the president of Germany, which is the biggest investor to Bulgaria, one of its major creditors and the most significant trade partner for Bulgaria among the EU states.

"The better framework conditions are being created, the greater will be the readiness of the German economy to invest in Bulgaria," Roman Herzog said. In his view the same holds true for Bulgaria's aspirations to the European Union. "I emphasized that Bulgaria has its place in Europe. Bulgaria should become a EU member but the conditions it has to meet must be created here on the spot," the German President said. He said that one of the goals of his visit here was to offer encouragement.

Roman Herzog discussed the safety of the Kozlodoui nuclear power plant (on the Danube) both with President Zhelev and Prime Minister Videnov. Germany supports the EU view that reactors which cannot be upgraded should be shut down. "We have never objected to visits by experts of international institutions controlling the state of Kozlodoui reactors. We are not against their upgrading with EU support; this will obviously be a process in which Bulgaria is ready to take part," President Zhelev said.

"We expect support from Germany in the field of investment so that large German companies and small investors could bring in fresh money; we also expect support for the rehabilitation of Bulgaria's banking system and for privatization," President Zhelev said. He elaborated on what Bulgaria should do to attract German investors and bankers. Zhelev said that now Bulgaria lacked far-reaching reforms in industry, agriculture and banking, as well as adequate legislation and rule of law. The drop in German investment in Bulgaria in 1995 - both in absolute terms and in proportion to other Western investors - is alarming, Zhelev said. "In spite of this we hope that Germany will be understanding of the difficulties Bulgaria is going through and will give us the support we need," President Zhelev said.

This afternoon President Herzog and the attending party will visit Bulgaria's second biggest city of Plovdiv in the south and Bachkovo Monastery.

[05] COUNCIL OF MINISTERS DECISIONS

Sofia, March 21 (BTA) - The Government today approved a draft bill on scientific degrees. It regulates conditions for granting degrees and the bodies authorized to do so. The effective law was passed in 1972 and amended in 1992 but legal gaps make it inadequate in the conditions of higher education autonomy.

The ministers passed a draft law on protection of new plant varieties and animal breeds. The law is in line with laws in developed countries and an international convention on protection of new plant and animal varieties.

The Cabinet approved a proposal for Bulgaria to file its candidacy for hosting a congress of the European Quality Organization in the year 2004. Bulgaria joined the organization in 1967. The forthcoming General Assembly in Vienna on March 23 will elect the cities to host congresses by the year 2011. The Bulgarian candidacy will be filed then.

The Government today gave the green light to negotiations on free trade zones with Slovenia and Romania.

The Cabinet approved the Bulgarian positions for the forthcoming negotiations with the US on textile trade. The former bilateral agreement expired December 31, 1995, the Minister of Trade and Foreign Economic Cooperation Atanas Paparizov said today.

The new accord provides for setting quotas for Bulgarian textile exports to the US. The quotas are to be raised by 5% annually.

The Council of Ministers today clarified the positions of the Bulgarian delegation to the 10th session of the Bulgaria-Tunisia joint commission for economic cooperation in late March. The commission will meet after a 10-year break. The Bulgarian side will be led by Health Minister Mimi Vitkova.

The ministers decided to begin talks between Bulgaria, Laos and Cambodia on an agreement on reciprocal investment protection and promotion. They approved a similar draft treaty with Peru.

The Government today decided to begin preparations for talks on an agreement between the Posts and Telecommunications Committee and the Communications Ministry of North Korea.

The Cabinet today approved a draft agreement in tourism with South Africa as a basis for negotiations. The ministers authorized Bulgarian Ambassador to South Africa to conduct the talks and sign the agreement.

The Cabinet approved the Bulgarian positions on an agreement with Yugoslavia on scientific-technological cooperation.

The Cabinet approved the positions of the Bulgarian delegation at the 52th session of the UN on human rights.

[06] BULGARIA WISHES TO IMPORT GAS AGAINST TRUCKS

Sofia, March 21 (BTA) - Russian Gazprom and Bulgarian Bulgargas are negotiating Russian natural gas deliveries against I.C.E. and electricity trucks produced and Balkancar Holding, Balkancar Executive Director Iliya Ivanovski said after the meeting tonight of members of the Business Club for Cooperation with Russia and the CIS. The outcome of the negotiations will become known within two months.

In the CIS countries there are almost one million Balkancar trucks in need of repair. The Balkancar Holding is seeking to set up a network of joint ventures for servicing Bulgarian trucks.

Over the past few years Balkancar sales of ICE and electricity trucks dropped by 6-7,000 a year. The holding is seeking to regain its market positions in the CIS.

[07] PRIVATE SECTOR ACCOUNTS FOR 1/4 OF TOTAL OUTPUT

Sofia, March 21 (BTA) - Nonfarm output in February topped 94,000 million leva, according to interim figures, National Statistical Institute (NSI) Spokesman Dimiter Fratev told a press conference today. This is 5% down on February 1995 and over 3% up from January 1996. Output in January and February amounted to nearly 84,000 million leva, which is 1% more than the first two months of last year. Nearly 1/4 of total output in February was generated in the private sector, according to the NSI. It grew 10% from February 1995. Output in the first two months of this year rose over 15% from the same time of 1995. The public sector manufactured goods worth 72,000 million in February, 9% down on the same month of 1995. Output in January and February amounted to 142,000 million, 3% down from the same time of last year. Corporate managers report negative trends in the public sector, despite a better start this year than 1996. Orders are falling, and factors such as customer insolvency and financial difficulties resulting from the unstable economic environment, are coming into play. Industrial output in February totalled a little over 60,000 million leva, which is nearly 8% less than the same month of 1995. It climbed 1% from January 1996, compared to over-10% increases in several preceding years, NSI figures show. Thirteen industries reported a drop in output in February. Metallurgy declined 84%. Industries such as machine tools, metals, chemicals and petrochemicals and construction materials, also reported a negative growth. Negative trends persisted in the light and printing industries. Retail sales in the public and private sector hit 36,000 million leva in February. This is 2.2% up on February 1995. Retails sales in January and February totalled 72,000 million leva, 2.4% up from the same two months of last year.

[08] DEPUTY MP KONAKCHIEV ADDRESSES REGIONAL DEVELOPMENT

Berlin, March 21 (BTA exclusive by Borislav Kostourkov) Bulgarian Deputy Prime Minister and Minister of Regional Development and Construction, Doncho Konakchiev, addressed this morning's plenary session of the Berlin Conference on Sustainable Urban Development. His report was titled "Economic Instruments in Coordinating Regional Planning at local and regional level in the Republic of Bulgaria". Mr Konakchiev acquainted the participants in the forum with some aspects of Bulgaria's regional and urban development strategy, covering the period up to 2010 which are aimed at this country's most efficient integration into the European region. This strategy is based on a fundamentally new approach treating regional and urban development not to as effect but as cause determining the actions of the state and the local authorities in the administration and functioning of the living environment, the Bulgarian Deputy Prime Minister said.

The urban development policy should be synchronized with the policy of overall regional development and administration of a given country because the latter is implemented mainly in and through the population centres. Its goals should conform both with European strategies and standards of regional planning and with universal sustainable development principles. Special attention is being paid to decentralization of rights and responsibilities and to the greater powers of the local authorities.

Mr Konakchiev pointed to the strict implementation of a national environment policy based on comprehensive research into environment risk factors in central and eastern Europe, as one of Bulgaria's achievements in the process of democratization. Bulgaria views the achievement of unity between economic development and environment protection priorities as a major precondition for sustainable development.

The Bulgarian representative recalled that last October Sofia hosted the Third Ministerial Conference Environment for Europe.

In conclusion Mr Konakchiev dwelled on some aspects of the Bulgarian Government's economic policy related to the implementation of its sustainable urban development programme.

[09] BULGARIAN PARLIAMENTARY DELEGATION PAYS HOMAGE TO HIROSHIMA VICTIMS

Sendov, his deputy Ivan Kourtev and Bulgarian Ambassador in Japan Valentin Gatsinski signed to book of the memorial complex, describing their impressions and appealing against the nuclear threat.

Later today, the MPs left for Kobe, site of a disastrous earthquake in January 1995 which claimed 5,500 lives. The delegation visited restoration sites.

Tomorrow the delegation will visit a plant of electronics giant Sharp in Osaka, after which it will return to Tokyo.

[10] OECD COUNTRIES ACCOUNT FOR MOST OF BULGARIA'S TRADE

Member-states of the Organization for Economic Cooperation and Development (OECD) account for most of Bulgaria's trade - 51 per cent, followed by European Union countries - 38 per cent, and Central and East European countries - about 30 per cent. OECD countries account for 47 per cent of imports in Bulgaria, followed by Central and East European countries, whose share is 41.7 per cent. Bulgaria's major trade partners in 1995 include Russia, Germany, Macedonia, Italy, Turkey and Ukraine.

Industrial products account for one fifth of Bulgarian exports in 1995, followed by consumer goods - 17.2 per cent and foods and drinks - 14 per cent. Industrial products top this country's import list with 36.5 per cent, followed by fuels 26.4 per cent, investment goods - 14 per cent and consumer goods - 9 per cent.

[11] CONSTITUTIONAL COURT RULES UNCONSTITUTIONAL TWO CLAUSES OF NEW BILL

The judges ruled unanimously that a provision in the law saying that an immovable world or national cultural monument can be bought, sold, exchanged or donated only with the consent of the National Institute for Cultural Monuments, is unconstitutional. The court said it violated private property rights.

A clause that discussed cases in which cultural monuments can be nationalized, was also declared unconstitutional, Judge Ivan Grigorov, who reported on the case, announced. The text says monuments of great value can be nationalized on the proposal of the Minister of Culture. The MPs challenged the formulation "monuments of great historical value, or of great value for national cultural development," which they argued cleared the way to arbitrary decisions.

Two judges registered dissent in the vote on the latter text, Grigorov said.

[12] BUSINESS PRESS - BANK LICENCES

The Supreme Court cancelled the implementation of a decision of the Governing Board of the National Bank of Bulgaria (BNB) to revoke the licences of the Agricultural & Investment Bank and Crystalbank. In practice, the Supreme Court ruling allowed them to resume normal operation. Today the banks were open to clients and the BNB regulators left, "Pari" reports on its front page.

On March 8 the BNB revoked the licences of the two banks which were in a state of persistent insolvency. The implementation of the central bank's decision was intended to guarantee the creditors' interests, BNB Legal Department Head Borislav Stratev told "Pari". The Supreme Court ruling freed the central bank of the responsibility to guarantee deposits. Within a month the central bank's regulators were to provide information on the amount of deposits in the two banks so that the deposit guaranty fund could take steps to return to depositors up to 250,000 leva within three months.

The BNB bears no responsibility for anything that might happen while the Supreme Court decision is in force and does not guarantee the creditors' interests, Stratev said. In his view, the Court's motives for this step are not clear. Stratev said the BNB would appeal against the Court decision as soon as it officially received the document.

"Pari" reports that committees of depositors in the Agricultural & Investment Bank (AIB) from all parts of the country protested in front of the buildings of Parliament and the BNB yesterday. They demanded that the BNB Governing Board be held responsible for its inaction, that the decision to revoke licences be reviewed and deposits be guaranteed 100 per cent.

Deposits in the two banks total 1,700 million leva, according to BNB Vice Governor Gancho Kolev. "Pari" recalls that the Transport Ministry brought action against AIB boss Kiril Dounev after ECU 1,000,000 granted under the PHARE programme for transport projects disappeared in the bank.

[13] PRIVATIZATION

"Despite a lack of preparation, the state leadership is showing a political will to accomplish mass privatization. I believe that the Government will do its best to ensure its success," Mollov Bank boss Valentin Mollov says in an interview in "Zemya". He wants to set up a nationally responsible privatization fund. "We have been talking with foreign investors who could help us develop the enterprises we have chosen," Mollov says.

[14] DIRECT FOREIGN INVESTMENT UP 2,600 MLN LEVA

Foreign investment breaks down as follows: 82.5% in equity, subsidiary capital, provisions and reinvested profit, and 17.5% in loans and trade credit.

In January-September 1995 foreigners reinvested 182,300 million leva, or 1.4% of the total value of investment. This is 11,500 million leva up from the same time of last year. In terms of profit reinvestment, Greece comes first with 39.7%, followed by Ukraine (20.3%), the US (17.4%) and the UK (9.3%).