News from Bulgaria / 96-06-11

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

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

11 June, 1996

CONTENTS

[01] AT BULGARIAN FOREIGN MINISTRY

[02] RULING SOCIALISTS APPROVE CHANGES IN CABINET

[03] PARLIAMENT APPROVES STRUCTURAL, PERSONNEL CHANGES IN GOVERNMENT

[04] NEW MEMBERS OF VIDENOV'S CABINET LYUBOMIR DACHEV, 61, INDUSTRY MINISTER.

[05] ROUMEN OVCHAROV, 43, MINISTER OF ENERGY AND ENERGY RESOURCES

[06] KRUSTYO TRENDAFILOV, 59, MINISTER OF AGRICULTURE.

[07] IVAN MARAZOV, 54, MINISTER OF CULTURE.

[08] 22% VAT RATE: A BLOW ON THE INDEPENDENT PRESS

[09] TODOR VULCHEV: 27 BANKS WERE LICENSED DURING MY TERM AS CENTRAL BANK GOVERNOR

[01] AT BULGARIAN FOREIGN MINISTRY

Deputy Foreign Minister Irina Bokova is leaving for Vienna to participate in a June 13-14 sitting of the French-Austrian centre for economic integration in Europe. Bulgaria is expected to become a full member of the centre. On June 17 Irina Bokova will visit Brussels for consultations on Bulgaria's possible accession into the European Union.

None of the Balkan foreign ministers invited to the forthcoming meeting in Sofia has refused to participate, said the Foreign Ministry. The hosts are drafting the agenda of the guests of the EU, NATO and other organizations. The other likely participants in the forum have confirmed that late June and early July is convenient for them.

[02] RULING SOCIALISTS APPROVE CHANGES IN CABINET

The Socialists voted to split the posts of deputy premier and minister of agriculture. Svetoslav Shivarov remains deputy prime minister while the Ministry of Agriculture he has headed will be handed over to Krustyo Trendafilov, regional governor of Montana (northwestern Bulgaria). The Ministry of Culture will go to art professor Ivan Marazov, 54. Associate professor Lyubomir Dachev, 61, current deputy minister of education, science and technology, is sponsored for the position of industry minister. The Energy Committee is transformed into a Ministry of Energy and Energy Resources, to be led by the present deputy chairman of the Energy Committee Roumen Ovcharov, 44.

Prime minister Zhan Videnov at the beginning of the meeting proposed the election of Dachev, Marazov and Ovcharov as ministers, the separation of the posts of deputy prime minister and minister of agriculture, the election to the latter post of the chairman of the parliamentary Budgetary and Finance Committee Kiril Zhelev, the dismissal of deputy prime minister Roumen Gechev and the closure of his Ministry of Economic Development. The Socialists voted down Videnov's scheme to close the Economic Development Ministry and fire Gechev as deputy prime minister as well. The chairman of the Budgetary and Finance Committee Kiril Zhelev garnered most votes of three contenders for the Agriculture Ministry but withdraw in favour of runner- up Krustyo Trendafilov, a former MP. The post of energy minister was contested by the chairman and the deputy chairman of the Energy Committee Konstantin Roussinov and Roumen Ovcharov, but the prime minister's nominee Ovcharov got more votes.

The meeting was marked by heated debates, participants said. "The changes we need are radical changes," said former Socialist leader Alexander Lilov. He recommended the election of a strong Government- "with or without Zhan [Videnov] - depending on the assessment." The prime minister's plan of changes was described by former Socialist premier Andrey Loukanov MP as inadequate.

The changes are neither radical nor cosmetic; they are the needed changes. This will be neither the second, nor the last Government of the Democratic Left, it will be the Government I would continue to take full responsibility for, said Prime Minister Videnov, quoted by today's issue of the Socialist daily "Douma". The paper also quotes part of Videnov's report to the meeting. The situation is critical, the Government lacks a strategic programme, macroeconomic projections for 1995 proved too optimistic, and we are not able to keep our promise to stop impoverishment in 1996, the prime minister admitted. Confidence in the national currency and the financial system is in jeopardy. The consequences can be high inflation, collapses of banks and social upheavals. Decisive Government action can prevent this, the prime minister believes. The only chance for success lies in the announced structural reform programme, "Douma" says.

[03] PARLIAMENT APPROVES STRUCTURAL, PERSONNEL CHANGES IN GOVERNMENT

Addressing the MPs, Videnov motivated the Cabinet reshuffle with "the need to carry out financial stabilization, a far-reaching structural reform in the main sectors of the real economy- industry and agriculture, and programmes for lending austerity and financial rehabilitation of strategic sectors such as energy".

At the proposal of the Democratic Left, the structural changes were voted by open ballot and the personnel changes by secret ballot and en bloc. The structural changes were backed by 124 of 125 MPs who took part in the vote. The vote against was of an MP of the ethnic Turk's Movement for Rights and Freedoms (MRF). The personnel changes were supported by 121 MPs and opposed by 2 (of 125).

The personnel changes envisage that Svetoslav Shivarov keep his post of Deputy Prime Minister while the Ministry of Agriculture and Food-Processing, which he headed until now, will be taken up by Krustyo Trendafilov. Industry Minister Kliment Vouchev and Culture Minister Georgi Kostov will be replaced by Lyubomir Dachev and Ivan Marazov respectively. The newly set up Ministry of Energy and Energy Resources will be headed by Roumen Ovcharov.

After the result of the vote was announced, Videnov thanked the parliamentary majority for its "categorical support for these badly needed changes in the structure and personnel of the Cabinet". According to Videnov, the changes are "necessary so as to guarantee all chances of success of the just started structural reform, and especially those in its current decisive step: the financial, budget, and banking stabilization," which Videnov described as the most immediate task facing the Cabinet.

"Regretfully, the opposition MPs preferred to stay away from this nationwide effort. I think that this seeks to demonstrate once again the absence of any alternative to the policy currently implemented in Bulgaria, which the Cabinet is ready to carry out and is already implementing," Videnov said. The Prime Minister pledged before Parliament that the Cabinet will submit, as soon as possible, a comprehensive programme with all necessary measures for the various sectors of the economy, including the state-financed sector, the real economy and the banking system, for this country's stabilization and the successful start of the structural reform.

Before the vote, the opposition proposed that Parliament debate the Prime Minister's motion on structural and personnel changes but Socialist MP Mariela Miteva said that this will mark the beginning of the debate on the motion of no-confidence in the Government proposed by the opposition. The debate is scheduled for tomorrow when Parliament will hold its second extraordinary session for the week. The majority voted down a motion by an opposition MP to broadcast today's sitting on national radio and television.

"We cannot let such an important issue, awaited by society for such a long time, fade away without having our say here in Parliament," said Stefan Savov, Co-chairman of the Popular Union coalition. He said the Popular Union would walk off the sitting and would not take part in the vote since the debate motion had been defeated. Savov charged that the Government and the Left were irresponsible, calling the changes "ludicrous and palliative, resolving nothing".

The Cabinet including the Prime Minister must go because it must bear the political responsibility for its irresponsible, criminal and harmful actions, said Yordan Sokolov, floor leader of the largest opposition force, the Union of Democratic Forces (UDF). He said "Bulgaria's problems could be resolved only by a new democratic majority, elected by early parliamentary elections". Sokolov accused the Government and the left- wing majority that in 17 months they had plunged the country in a worse catastrophe than the one of 1989-90. According to the UDF, the Cabinet is to blame for the grain and fodder crisis, "the betrayal of national interests over Topenergy (a Bulgarian-Russian gas joint venture set up in May 1995) and Bulfon (a joint venture of the Bulgarian Telecoms Company and Intrakom of Greece), for the undoing of the financial and banking systems. Sokolov said that Cabinet changes are always preceded by demands for resignations by the UDF and the majority always tries to make out that it suggested them. Sokolov described the latest Cabinet changes as "more than cosmetic" and also said the UDF would not vote.

Speaking on behalf of the parliamentary group of the MRF, Yudjel Atilla also strongly criticized the Government and the parliamentary majority of the Democratic Left. The BSP is in a deep government crisis, Atilla said expressing fears that in these critical times the BSP may be tempted to resort to the nationalist card. The MP of the MRF accused the parliamentary majority and the Government of waging war against ethnic tolerance and seeking to vindicate the "regeneration process" (the coercive renaming of Bulgarian Turks in the 1980s during the communist regime) by including in the Cabinet people like Education, Science and Technologies Minister Ilcho Dimitrov. After Atilla's statement Videnov asked for the floor and refuted his allegations.

Krassimir Premyanov, floor leader of the Parliamentary Group of the Democratic Left told Parliament that the majority supports Videnov's cabinet because "it had the courage to launch real reforms in this country and start important talks with the IMF, to declare its intentions and put them in the form of a Letter of Intent." "Your superficial and incidental criticism evades the basic issue: whether the UDF has an alternative to the policy proposed by the Democratic Left." Premyanov said addressing the opposition. He said 99% of the present problems in agriculture were inherited from the government of the UDF. Premyanov criticized the opposition for boycotting all initiatives of the left wing for holding discussions on important problems for this country.

[04] NEW MEMBERS OF VIDENOV'S CABINET LYUBOMIR DACHEV, 61, INDUSTRY MINISTER.

"One of the reasons to accept to take the office was that I have worked for a long time in industry and I can be of use," newly appointed Industry Minister Lyubomir Dachev said opening his first statement. He told journalists that at first he rejected the proposal believing that as a long-serving expert in the field of technologies he could be more useful there. He added that solving the problems in industry does not depend on him alone.

He supports the government's decision to launch the structural reform by winding up and isolating certain enterprises. "This is a difficult decision but also a decision that had to be taken because we could not keep investing millions in enterprises which produce nothing," said he.

The newly appointed Industry Minister is not supportive of the system of government contracts in industry. Government cannot award contracts if it cannot provide inputs, operating capital and markets, said Dachev.

He believes that one of the major difficulties facing him as Industry Minister is the work with trade unions. "The demands the trade unions are bringing forth can be met when there is a working industry. Those employed in industry have really bad problems but they will not be solved by sending the people into the streets," Dachev said in conclusion.

[05] ROUMEN OVCHAROV, 43, MINISTER OF ENERGY AND ENERGY RESOURCES

"Transforming the Energy Committee into a ministry was a necessary step because the problems in this field are too serious to be addressed in passing," newly appointed Energy Minister Roumen Ovcharov told journalists. He said he has been working as deputy chief of the Energy Committee for ten months now and is well aware of the problems there. "I took the office because there is a job to be done but I cannot guarantee I will offer solutions to all problems," he said.

He said the question about a new managing board of the National Electricity Company will be addressed in a couple of days. Asked if he can guarantee there will be no electricity and heating rationing, Ovcharov said, "I hope so. But I cannot make this commitment in advance."

[06] KRUSTYO TRENDAFILOV, 59, MINISTER OF AGRICULTURE.

"I believe I have sufficient managerial experience and this is what the Ministry of Agriculture and Food Processing needs at the moment in order to settle the complex and serious problems that have accumulated," the new Agriculture Minister Krustyo Trendafilov told reporters.

Mr Trendafilov said that he will count on the available at the ministry experts. "For me, however, it is indisputable that agriculture categorically needs the support of the state to overcome the serious crisis," he specified.

The new minister said that the country is now experiencing a grain problem and while the bread wheat supply has been ensured until the new harvest with imports from Serbia, the problem with the animal feed grain remains serious.

Despite the grain problems, however, Trendafilov insists that Bulgaria should export farm produce, however keeping a continuous careful watch on the nature and the amount of exported goods. He believes that one of the serious problems in agriculture at the moment is the great difference between the international prices of farm produce and their low purchasing prices on the home market. Trendafilov identified as one of the tasks standing before his ministry the establishment of balance in the pricing policy so that to intercept speculation.

[07] IVAN MARAZOV, 54, MINISTER OF CULTURE.

"I accepted the position of minister of culture after I set the condition that the Cabinet will back culture," the newly-appointed Minister Ivan Marazov told reporters. He does not view his decision to take the position as entry into politics, but rather as an attempt to settle some problems in this field using his knowledge.

He specified that before he gets familiarized with the tasks of the Ministry and consulting his predecessor Georgi Kostov, he cannot specify the priorities in its work.

[08] 22% VAT RATE: A BLOW ON THE INDEPENDENT PRESS

[09] TODOR VULCHEV: 27 BANKS WERE LICENSED DURING MY TERM AS CENTRAL BANK GOVERNOR

"Depositors have withdrawn USD 370 million since the beginning of January," Prof. Vulchev said speaking of the panic sparked by the crisis on the foreign exchange market. The liquidity of a large part of the banking institutions has not been impaired, Prof. Vulchev believes, and the panic came as a result of inefficient coordination between the central and the other banks. The BNB lost control over the exchange rate of the lev because of internal for the BNB problems, Prof. Vulchev believes.

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