News from Bulgaria, 96-07-22

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

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

22 July, 1996

CONTENTS

[01] I.M.F.'S STAND-BY CREDIT BACKS CABINET POLICY

[02] GOVERNMENT OKAYS 71,000 MLN LEVA BUDGET DEFICIT

[03] BALKAN MEETING OPENED NEW OPPORTUNITIES FOR BULGARIA'S ACTIVE FOREIGN POLICY, FOREIGN MINISTER PIRINSKI SAYS

[04] PRESIDENT ZHELEV SPEAKS ON BULGARIAN FOREIGN POLICY BEFORE ATLANTIC CLUB

[05] THIRD EU-BULGARIA JOINT PARLIAMENTARY COMMITTEE

[06] PARLIAMENT RATIFIES THE EUROPEAN ENERGY CHARTER TREATY

[07] PRESIDENTIAL ELECTION SCHEDULED FOR OCTOBER 27

[08] DEFENCE MINISTER PAVLOV ON PIRINSKI'S CONSCRIPTION

[09] OPPOSITION DEMANDS INFORMATION ABOUT GRAIN

[01] I.M.F.'S STAND-BY CREDIT BACKS CABINET POLICY

Since 1991, Bulgaria has made three stand-by arrangements with the IMF, to an aggregate amount of SDR 753 million (901 million US dollars). In the autumn 1994 the Fund suspended drawings under the third arrangement, and negotiations in 1995 failed to produce a fourth stand-by arrangement. The conditions set by the IMF for the conclusion of a new deal included a reform in the banking sphere , accelerated privatization, enforcement of financial discipline in state-owned enterprises, and structural adjustment in the real economy sector (closure of some loss-making state-owned enterprises and preparation of rehabilitation programmes for others).

On May 27, 1996 representatives of the IMF and of the Government reached agreement in principle on a comprehensive programme that would be supported by a Fund arrangement. "The reason why the IMF has decided to support the government reform programme is that it sees it as a strong programme, as the programme Bulgaria needs to address the structural problems," Mr Franek Rozwadowski, IMF Resident Representative in Sofia, said in an exclusive interview for BTA on July 16. He also said that the IMF does not have any specific requirements about the way the Government will utilize the loan. "It is, though, required to continue implementing the structural and macroeconomic policies that it has decided to implement," the IMF official said, noting that the Government has shown progress in carrying out the reform in the past two or three months.

In the real economy sector progress has been in preparing the reforms. A number of necessary measures have been taken in the banking sector as well. "The decision of the IMF Executive Board to approve a loan for Bulgaria shows that the Fund endorses the Government's programme and the action it is taking to pull the country's economy out of the crisis," Finance Minister Dimiter Kostov said on national television last night. He emphasized that technically the money from the Fund will replenish the central bank's foreign-exchange reserves and will help stabilize Bulgaria's balance of payments and the exchange rate, while servicing the external debt will be considerably facilitated. Mr Kostov also said that negotiations are under way with the World Bank, "with realistic prospects for finalization within two months, which will be a big relief for foreign debt service."

"The IMF Executive Board said 'yes' to the Government's economic programme for restructuring of the real economy, for stabilization of the banking sector and for ensuring the necessary medium-term conditions for attainment of economic growth and active adaptation to world economic structures," Deputy Prime Minister and Minister of Economic Development Roumen Gechev said on national television this evening. Appearing in the Panorama news and views talk show, he emphasized that the arrangement also comes as an acknowledgement of Bulgaria's economic policy and its integration into the world economy. The Deputy Prime Minister explained that under the agreement with the IMF, the most important effect of measures taken in the enterprise sector and the banking sphere will be a regained confidence in the national currency, which would lead to an increase of lev and hard-currency savings deposits.

[02] GOVERNMENT OKAYS 71,000 MLN LEVA BUDGET DEFICIT

[03] BALKAN MEETING OPENED NEW OPPORTUNITIES FOR BULGARIA'S ACTIVE FOREIGN POLICY, FOREIGN MINISTER PIRINSKI SAYS

Mr Pirinski explained that it had never been planned to sign the final document. The two previous Balkan meetings ended by just issuing communiques. "The level of representation depends on the participating countries," he said. Internal issues may be one of the reasons for a country's choosing a definite representation level, Mr Pirinski said, citing Turkey, which had been represented by a deputy minister. Commenting on Macedonia's refusal to attend the conference, prompted by the disputes about its name, Minister Pirinski said that Bulgaria could not but adhere to the standard diplomatic practice. "Both before and after the Sofia meeting the republic of Macedonia did attend a lot of international multilateral events under the name it is referred to in the documents of the United Nations. If I were you, I would rather ask why it was for the Sofia meeting that the Republic of Macedonia refused to comply with this practice, what are the reasons for it and whether Macedonia's is a goodwilled position or it is not so goodwilled," Minister Pirinski said in his reply to the MP. "Since the very first days of Macedonia's existence, Bulgaria has provided no ground whatsoever for such attitude," he stressed. He added that Macedonia's proposals made during the preparations for the meeting were included in the final document - the Sofia Declaration on Good-Neighbourly Relations, Stability, Security and Cooperation in the Balkans.

Mr Pirinski, who has been Bulgaria's chief diplomat for a year and a half and the presidential candidate of the ruling Bulgarian Socialist Party, stressed in conclusion that Bulgaria had played successfully its role as the meeting's host. He said that this was a serious step along the road to the final goal of full integration in single Europe. "The meeting is a proof that Bulgaria can be the initiator of a stability policy in the Balkans," Foreign Minister Pirinski said.

[04] PRESIDENT ZHELEV SPEAKS ON BULGARIAN FOREIGN POLICY BEFORE ATLANTIC CLUB

Zhelev stated that given the present-time development of communications, Bulgaria's being located at crossroads provides great opportunities for economic development. The fact that four of the trans- European transport corridors on the lists of the European Union cross in Bulgaria, is a promising one. These are the East-West corridor linking Bourgas (on the Eastern Black Sea), Plovdiv (Southern Bulgaria), Sofia, Skopje, Tirana, Duras, and Brindisi; the North-South corridor: Istanbul, Plovdiv, Sofia, Arad, Budapest, Bratislava, Prague, Dresden, Berlin, with the branch to Sofia-Thessalonoki-Athens; the corridor linking Plovdiv, Bucharest, Chisinau, Kiev and Moscow and the water corridor Rhine- Main-Danube.

The President stressed that Bulgaria's location offers excellent opportunities for air transport as well. As an example he cited the potential of the 20 military airports across the country, eight of which can be used by heavy-duty cargo aircraft. "We have been made such offers by U.S. companies in 1993 and 1994, but the opportunities got missed," Zhelev said.

The President criticized the foreign policy of the Government of the ruling Bulgarian Socialist Party (BSP) for, in his view, the untapped opportunities and the danger for Bulgaria being left in an isolation. Zhelev said that Bulgaria is the only East-European country whose Government is not pressing for becoming a NATO member. According to him, "In the future structure for collective security which is now taking shape, and into which the North Atlantic Treaty will be inevitably transformed, Bulgaria is starting to look more and more like a hole in the security systemî. He also said also that the BSP's Government is the first Bulgarian cabinet to pursue an imbalanced policy on the Balkans and to try to revise the chief aims and priorities of Bulgaria's European policy.

The President said that the Balkan policy of the Socialist Government is imbalanced because of the tendencies towards ideologization and preferences to similar parties in neighbour states. Zhelev stated that at the present moment Bulgaria is "turning its back to Turkey in favour of Greece". "We have always insisted on having good relations with Greece but it is impossible to disrupt the balance in Bulgaria's policy of equally good ties with its two NATO neighbours," Zhelev said.

The President assessed the Government's initiative to hold the Balkan foreign ministers' meeting in Sofia on July 6-7 in positive terms and expressed his regret that Macedonia did not attend it. According to the head of state, Bulgaria's efforts to maintain good-neighbourly relations with the former Yugoslav Republic of Macedonia are not always reciprocated with adequate attitude; he recalled that Bulgaria was the first which recognized Macedonia's independence.

Zhelev expressed his view that when Prime Minister Zhan Videnov's team came to power, for the first time the Government and the President failed to agree on key foreign political problems and this was the reason for creating the myth about the two foreign policies of the country: one pursued by the President and the other one by the Cabinet.

The head of state reiterated his view that in the period of transition, a strong presidential institution would meet more adequately the country's needs. Zhelev voiced this view on national radio and television a week ago and recalled he had stated it even before the adoption of Bulgaria's new Constitution in 1991.

"To me, today's lecture of the President alludes to a definite person - Foreign Minister Pirinski, the BSP's candidate in the October presidential elections," Elena Poptodorova, MP of the Democratic Left (the BSP-led parliamentary coalition) and member of the Atlantic Club, said commenting on the President's statements. Poptodorova said that Pirinski should be given the opportunity to answer the attacks.

"I promise that I will invite Foreign Minister Georgi Pirinski to deliver a lecture at the Atlantic Club and state his position," Atlantic Club President Solomon Passi said at today's meeting of President Zhelev with members of the Club. "I will give the floor to the presidential candidate of the united opposition, Peter Stoyanov, too," Passi added.

[05] THIRD EU-BULGARIA JOINT PARLIAMENTARY COMMITTEE

Among the issues on the agenda is the progress of the EU intergovernmental conference, the political and economic situation in Bulgaria, the initiatives of the EU and Bulgaria for the stabilization of Central and Southern Europe, economic relations between Bulgaria and the EU and in particular issues concerning agriculture, textile production, industrial goods and the harmonization of Bulgarian legislation with the European laws, the social situation and the development of the civil society in Bulgaria, as well as some visa problems.

Bulgarian MP Elena Poptodorova is drafting together with MP Wilmia Zimmerman a joint report on the visa issues. Bulgaria insists on its removal from the EU visa blacklist. An expert group which was in Bulgaria in June has already prepared their estimates. It is expected for the Poptodorova and Zimmerman report to make a recommendation for specifying clearly the criteria and the requirements to Bulgaria in connection with the visa regime and the emigration policy, Mrs Poptodorova told a news conference today.

[06] PARLIAMENT RATIFIES THE EUROPEAN ENERGY CHARTER TREATY

Bulgaria's accession to the Treaty does not jeopardize its sovereign rights in the energy sector, the National Assembly Standing Committee on Power Generation and Energy Resources observed. The Treaty expressly says that each state party has discretion in determining the geographical areas within its territory which will be provided for exploration and exploitation of its energy resources. The Protocol on Energy Efficiency and Related Environmental Aspects enjoins the signatories to take action for improvement of energy efficiecny at all stages of the energy cycle, including the relevant statutory framework, institutional establishment and system for preferential financing of energy efficiency projects.

[07] PRESIDENTIAL ELECTION SCHEDULED FOR OCTOBER 27

The opposition insisted to have the elections in November claiming there is still farm work to be done in October and it will prevent many farmers from voting. Under the Constitution the President of Bulgaria is elected in a direct vote and stays in office for five years. To qualify for president, the candidate should be a Bulgarian citizen by birth, be aged over 40 and must have lived in the country for the past 5 years. Winner in the election is the one who garners over half of the votes, if more than 50% of the eligible voters have voted. If noone manages to get the 50% of the votes, the two most successful contenders participate in run-off elections.

Four candidates have already entered the presidential race: Foreign Minister Georgi Pirinski of the ruling Bulgarian Socialist Party, Peter Stoyanov of the united opposition, Alexander Tomov, leader of the Civic Alliance for the Republic, a coalition with no deputies in Parliament, and George Ganchev, leader of the parliamentary Bulgarian Business Bloc. The latest opinion polls show that Pirinski and Stoyanov enjoy equal approval ratings after the former has until recently lead the polls. Shifts, however, are not unlikely as the Constitutional Court next Tuesday is due to announce an interpretation of the constitutional provision on Bulgarian citizenship, which might affect New York-born Pirinski.

The elections will be held under a special law passed in 1991 and amended twice - in 1991 and in May 1996. Unlike the 1992 elections this time white ballot papers will be used. The last amendments to the law also introduced more stringent requirements for the contenders. An independent candidate must be nominated by 15,000 supporters through an initiative committee. To nominate candidates for president and vice president, the political parties, coalitions and initiative committees must also provide to the central bank a 250,000 leva non-intrest-bearing deposit (equal to 1,300 US dollars at the current exchange rate).

[08] DEFENCE MINISTER PAVLOV ON PIRINSKI'S CONSCRIPTION

The opposition is awaiting the ruling of the Constitutional Court concerning the interpretation of the constitutional term "natural-born Bulgarian". It petitioned the Court because Georgi Pirinski was born in the United States and his mother was an American citizen at the time.

[09] OPPOSITION DEMANDS INFORMATION ABOUT GRAIN

Giving a news conference later today, the UDF leaders asserted that grain had been taken from the contingency and the wartime reserves and that the Government had harmed depositors' interests by issuing a decree on the State Savings Bank floating loans to flour mills. According to the UDF, nearly all the foreign exchange reserve would have to be spent to import wheat. There are bread and wheat shortages in some parts of the country. Data published by the press show that 164 companies have exported 685,000 t of wheat of the 1995 harvest, while the export quota was actually only 540,000 t. Grain prices are climbing up, flour has disappearead from the shops, there are problems with the bread supply.

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