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News from Bulgaria, 96-09-17Bulgarian Telegraph Agency Directory - Previous Article - Next ArticleFrom: Embassy of Bulgaria <bulgaria@access1.digex.net>EMBASSY OF BULGARIA - WASHINGTON D.C.BTA - BULGARIAN TELEGRAPH AGENCY17 September, 1996CONTENTS
[01] P.M. VIDENOV MEETS WORLD BANK OFFICIALSSofia, September 16 (BTA) - Prime Minister Zhan Videnov and Finance Minister Dimiter Kostov today discussed the progress of restructuring in Bulgaria with Kenneth Leigh, World Bank Director for Southeastern Europe, and World Bank Resident Representative to Sofia Alberto Musalem.Mr Leigh said the talks were encouraging because the measures intended to reduce the number of loss-making enterprises and the extremely important privatization process had made considerable progress and had been speeded up. The Bank has already indicated its readiness to support the government to carry on with reform, Mr Leigh said, adding that the institution still holds this view. Finance Minister Dimiter Kostov said the talks focused on the pace of privatization, financial rehabilitation and financial discipline in the real economy. "The World Bank representatives stated that they found the progress of reform encouraging and that, on the whole, they supported the steps taken by the Cabinet," he said. Prime Minister Videnov said he was satisfied with the progress of negotiations with the World Bank and familiarized the Bank officials with the privatization measures taken and planned by the Government. A dramatic speeding up of cash privatization will step up the privatization process and ease the pressure of public debt on banks, companies and incomes, said Dimiter Kostov. This, according to him, would necessitate amendments to the privatization law providing for simultaneous cash and voucher privatization. [02] FOREIGN MINISTRY INFORMATIONSofia, September 16 (BTA) - Today environment ministers of Central and East European countries including Bulgarian Environment Minister Georgi Georgiev discussed ecological problems with Ritt Bjerregaard, European Commissioner in charge of environment, in Brussels, the Information Department of the Bulgarian Foreign Ministry said. The meeting was attended by Hans van den Broek, European Commissioner in charge of the external relations with the countries of Central and Eastern Europe.Minister Georgiev familiarized the participants with the progress of the approximation of the Bulgarian environmental legislation with the Community Law and the need of support, especially financial, by the EU to the Bulgarian environment. Newly appointed Bulgarian Ambassador in Brussels Boiko Noev stated Bulgaria's political will to fully integrate into the European and Euro-Atlantic structures during his meeting with Jose Cutileiro, Secretary General of the Western European Union (WEU), the Foreign Ministry Information Department said. Cooperation between Bulgaria and the WEU within the building of a new architecture of stability in Europe was on the agenda of the talks between Noev and Cutileiro. [03] GREEK FOREIGN MINISTER TO PAY VISIT TO BULGARIASofia, September 16 (BTA) - Greek Foreign Minister Theodoros Pangalos will come on a visit here on September 19, Ambassador of Greece in Bulgaria Anastasse Sideris said in an interview for the Bulgarian national radio today. The visit of the Greek Foreign Minister is in connection with exchange of ratifications of intergovernmental agreements for opening new border check-points along the Bulgarian-Greek border and for the utilization of the Mesta river waters, Ambassador Sideris said.Prime Minister Zhan Videnov received today Greek Ambassador Anastasse Sideris in connection with the completion of his mission in Bulgaria, the Government's press office said. Mr Sideris voiced Greece's stand about simultaneous association of former Socialist states with the European Union and confirmed his country's readiness to support Bulgaria in its efforts to join the European structures. [04] COMMENTS ON BULGARIAN ECONOMIC SITUATIONSofia, September 16 (BTA) - The income of the population will shrink by 20-30%, and not by 10-11% as was initially expected, and there will be another budget update, former economic adviser to the Prime Minister Ivan Angelov told the private Darik Radio yesterday quoted today by "Standart News". Angelov believes a GDP growth this year is unlikely and there can even be a 4% slump. He says inflation, currently standing at 113% according to him, can fetch 170-180% by year's end instead of the 105% envisaged in the July update of the 1996 budget. The foreign exchange rate for the second half of 1996 set at 150 leva/USD 1 in the updated budget, will be 230 leva/USD 1 at best, the former economic adviser also said. According to him, with such pronounced deviations from the macroeconomic framework, a new budget update is unavoidable.Finance Minister Dimiter Kostov said last week the budget will not be revised but the base interest rate would have to be raised. Todor Pandov, MP of the ruling Socialist-led Democratic Left coalition, tells "Standart News" the introduction of ceiling prices for some foods to stay unchanged for an year, is vital for protecting consumers' interests in the period of transition to a market economy. Speaking to this paper, Vladislav Kostov MP of the opposition Union of Democratic Forces (UDF) says the interference of the state will provide breeding ground for speculation. Monyo Hristov MP of the Popular Union coalition, the second biggest opposition force in Parliament, says the ceiling prices will result in deficit of some commodities. "Pari" cites a comparative study of the European Commission of August 28, 1996, saying in 1995 Bulgaria had a better debt-export income ratio that Hungary but Hungary has drawn more foreign investments and has a developed capital market while Bulgaria is in crisis, is severely decapitalized and has a dominating state ownership. [05] ECONOMIC NEWS - AUGUST: POOR WHEAT HARVEST (AUGUST 6)Sofia, August 6 (BTA) - Bulgarian farmers have harvested 1,800,000 t of grain so far, First Deputy Agriculture Minister Dimo Ouzounov told a regular news briefing at the Ministry. A key task to the Ministry is the provision of funding and other resources for the autumn sowing, to ensure the supply of 6 million t of grain the nation needs in 1996-1997.Bulgaria lately has seen shortages of bread grain. Seventh in the world in terms of per capita grain output for 15 years (after Canada, Denmark, Australia, the US, France and Hungary), it saw output plunge to 6.3 million t annually in 1993-1995. According to Agriculture Ministry estimates, this country needs over 1.6 million t of wheat annually for bread and pastry only. Ouzounov attributed this year's low yields to bad weather and the lack of funds for fertilizers and equipment. Fertilizer was applied to 10% of the fields only, and 60% (600,000 to 700,000 ha) of the land returned to former owner remained uncultivated. In the last month, 164 firms exported 685,000 t of wheat, exceeding the 540,000 t export quota, according to press reports and other sources. This sent bread prices soaring and led to the disappearance of flour from shelves. The opposition held the Socialist Government responsible for the grain crisis which some media blamed on corporate players on the grain market. "We have watched with great alarm the delay in grain purchases. In addition to the slow pace of purchases, it seems to be impossible to buy the necessary amounts," the leader of the opposition Union of Democratic Forces Ivan Kostov told a press conference today after a meeting of the National Executive Board. According to him, producers are probably overstocking, which is driving the price up. The expected poor harvest will necessitate the import of bread grain. The necessary amount will be imported from the US, Hungary, Ukraine and possibly other countries. [06] BULGARIA - INVESTMENTS (AUGUST 8)1,000 milllion US dollars in investment have come to Bulgaria over the past five years, according to an analysis of Merrill Lynch consultants, quoted by the Greek paper Kathimetini, "Standart News" writes. According to the analysis, the Bulgarian Government is moving in the right direction with regards to the reforms and lately the foreign investors have been showing increased interest in Bulgaria. According to the analysis, however, the danger that the Bulgarian economy may collapse, stil exists. The greatest danger according to the analysis, is posed by the banking system.[07] GDP DOWN 2.6% IN FIRST QUARTER OF 1996 (AUGUST 13)Bulgaria's GDP hit 213,000 million leva in the first quarter of 1996, "Standart News" says, quoting Zahari Karamfilov, head of the National Statistical Institute (NSI). This is 2.6% down from the same time of 1995. A serious decline was registered in the private sector, with industry falling 7% and services 6%, Karamfilov says. The Government and the International Monetary Fund (IMF) agreed on zero GDP growth this year. Taking into account first-quarter figures, Government projections will hardly come true, writes "Standart News".In July 1996 the Bulgarian Government signed its third, $580 million standby arrangement with the IMF. The loan was intended to support Bulgaria's balance of payments and structural and bank reform. The NSI says real incomes fell an average 50% in the last five years. This negative trend persisted in the first half of 1996. Real per capita incomes fell 1.6% between January and June. According to the NSI, annual inflation this year will hit 150%. [08] COMMENTARIES ON PRICES AND INFLATION (AUGUST 14)"Average monthly wage in the country was 82.2 US dollars in June, 106 US dollars in April, a little over 67 US dollars in May and in July it went further down in US dollar terms," "Troud" says on its front page, citing figures of the National Statistical Institute."Standart News" says that real incomes of the population have dropped 50 per cent over the past five years and the gap in the incomes of the richest and the poorest people is widening. The same daily says that households are spending increasingly more on food. "In 1989 the households spent 38 per cent of their budget on food, in 1995 this percentage was 46.3 and in July this year - 47.9," "Standart News" writes. "Continent" says that traders have been cheating customers, offering counterfeit goods at the prices of original products. The daily says that it is a general practice to keep white brined cheese in water so that it becomes heavier, sell detergents mixed with salt and put check wine labels on bottles of table wine. [09] BULGARIAN COMPANIES WIN PRESTIGIOUS PRIZES (AUGUST 16)The Board of Directors of the International Marketing Institute in the US has awarded the Grand Prix of America for quality and services to the Sodi Inc. chemical combined works of Devnya (Northeastern Bulgaria), writes "Pari." Another Bulgarian company, Tsiment of Beli Izvor (Northwestern Bulgaria), has been honoured by the Grand Prix '96 international award instituted by the Mexican National Institute of Marketing, according to the same story in "Pari."[10] AMOCO COMES TO BULGARIA IN SEPTEMBER (AUGUST 16)Sofia, August 16 (BTA) - US-based Amoco is scheduled to open a gas station and grocery store in Bourgas (on the Black Sea) on September 14. This is the first project of Amoco Bulgaria Oil Products Ltd. whose plans include the building of 50 gas stations in the next 7 to 10 years.By year-end the company will open two more gas stations, in Sofia and Plovdiv (Southern Bulgaria). All its facilities will be in big cities. Investment will total 50 million dollars. All of it will be channelled into the distribution network. At this point the company will not invest in the two Bulgarian oil refineries, the manager of Amoco Bulgaria James Shields told a press conference today. The Eastern European ventures of the company, which was set up in Chicago 106 years, are backed up by promising market studies, according to Shields. It will open a total 300 stations in Poland, Romania and Bulgaria, which will offer both Amoco and local products. [11] I.M.F. MISSION TO BULGARIA (AUGUST 21)Sofia, August 21 (BTA) - During their two-week visit to Sofia representatives of the International Monetary Fund (IMF) will review the implementation of the memorandum which led to the signing of the fourth standby agreement, said IMF Mission Leader for Bulgaria Anne McGuirk on her arrival here today. On July 19 Bulgaria signed its fourth standby arrangement with the IMF for a 580-million-dollar loan. The first tranche of 115 million dollars was released later in July.Anne McGuirk said the mission would review the macroeconomic situation in Bulgaria, the progress of the implementation of the programme for economic restructuring, bank rehabilitation, and privatization. It is too early to look for any specific results because the first results are expected in September, she said. According to Anne McGuirk, the liquidation of loss-making enterprises enterprises and the implementation of strict monetary policy will be in the focus of the discussions with the Bulgarian Government and the National Bank of Bulgaria. We are worried at the high inflation rate this month, as well as at last week's weakening of the Bulgarian lev against the US dollar, which may make pointless the Government's policy, McGuirk said. In her view the instability of the Bulgarian lev is an indication that fiscal policy is not strict enough. [12] BULGARIA TO BECOME SOUTHEASTERN EUROPE'S TELECOMMUNICATIONS CROSSROAD (AUGUST 23)Sofia, August 23 (BTA) - A key priority of the Bulgarian Telecommunications Company Ltd. (BTC) by the year's end will be to lay the optic cable from Veliko Turnovo, northern Bulgaria, to Rousse, on the Danube, and to Romania, BTC President Mihail Danov said in an interview on the national radio several days ago. Danov said that BTC has already agreed with the project's contractor, Alcatel, that the section will be completed within a short time. As a result, Bulgaria will have digital connection with Romania, Moldova, Ukraine, Russia and the Baltic states.He added that the optic cable connecting Svilengrad, southern Bulgaria, and the Turkish border is ready, and that the sides are holding talks about its official opening. The cable provides direct digital connection with Turkey, and thus with the countries of the Middle East and Southwest Asia. On August 14, the Alcatel ship, which laid a submarine optic cable in the Black Sea, arrived in the St Konstantin resort and connected the cable to the digital exchange in Varna, on the northern Black Sea coast. The facility connects Varna, Istanbul, and Mangalia. It is part of the CAPHOS project for the construction of a submarine optical link between Turkey, Bulgaria, Romania, Ukraine, Moldova and Russia. The system is linked with the Mediterranean Sea, Western and Northern Europe and North America. The optical cable between Istanbul, Varna and Mangalia connects Bulgaria to this telecommunications route. An optic cable between Sofia, Nis and Belgrade was opened a week ago so that, through the digital exchange in belgrade, Bulgaria is connected to Central and Western Europe via Hungary. The completion of all these links amounts to some USD 100 million. The projects will turn Bulgaria into a telecommunications crossroad between Europe and the Middle East, Southwest Asia and even the Far East, Danov stressed. [13] EXCHANGE RATE - COMMENTARIES (AUGUST 27)Dailies report that the US dollar yesterday strode through the 200 leva mark fetching 201.10-201.30 leva/USD 1 on the interbank market. "Dollar Crosses 200 Leva Mark, No Way Back" reads a headline in the financial "Pari" daily. The reason for the hike of the dollar is the hectic demand for foreign exchange while supply fell short, "Standart News" was told by United Bulgarian Bank dealer Nikolai Nikolov. Speaking to "24 Chassa", Zdravko Balyozov of the central bank Governing Board said the central bank is following closely the situation on the interbank market and is considering measures to push the dollar down.[14] PRICE HIKE (AUGUST 27)A "Standart News" report quoting a Reuter dispatch yesterday says consumer goods prices have gone up 81.9% in the January- August period. The Reuter report cited official statistics. The rise was most dramatic for services, that have gone up 2.1-fold, ahead of non- foods (by 82.7%) and foods (by 74.5%). The paper also says in July members of the public bought 2.4% less that they did this time last year. In a report quoting the National Statistical Institute, "Continent" writes that producer prices in July rose by the four-year record high 33%.[15] IMF MISSION LEADER MCGUIRK CONFERS WITH DEPUTY PM GECHEV AND OPPOSITION MP'S (AUGUST 30)August 30 (BTA) - The progress of market reform and the implementation of the government programme for restructuring and stabilization of the real economy and banking, coordinated with the International Monetary Fund (IMF), were discussed today at a meeting between Deputy Prime Minister and Minister of Economic Development Roumen Gechev and IMF Mission Leader for Bulgaria Anne McGuirk, the Deputy Prime Minister's Office told BTA. The two sides analyzed the results achieved in implementing the structural reform and the problems encountered in meeting some of the targets set in the government's Letter of Intent to the IMF and the World Bank. The two sides paid special attention to measures for achieving macroeconomic stabilization and for restoring confidence in the banking system. Today's talks between IMF Mission Leader Anne McGuirk with MPs of the Union of Democratic Forces (UDF, the largest opposition force) focused on the progress of the structural reform.Opposition MPs Mouravei Radev and Alexander Bozhkov, who are deputy chairmen of the parliamentary budget and economic committees, said that the IMF mission leader made it clear that the IMF would release the next USD 115 million tranche of its loan only after most of the loss makers on the liquidation list have been closed down. The documents of only half of the enterprises subject to liquidation have been prepared so far and the government has not closed a single enterprise since the signing of the agreement with the IMF, Ms McGuirk said. It is obvious to the IMF that progress has been made only in the legislative field and the implementation of the measures is being delayed, Bozhkov said. [16] I.M.F.'S MCGUIRK MEETS P.M. VIDENOV (SEPTEMBER 2)Sofia, September 2 (BTA) - After conferring with Prime Minister Zhan Videnov today, Mrs Anne McGuirk, IMF Mission Leader for Bulgaria, said they discussed the Bulgarian Government's compliance with the terms of the fourth stand-by arrangement, the acceleration of the structural reform and the overall state of the macroeconomy. Before completing its first review of the fulfillment of the stand-by arrangement programme, the IMF expects more specific results, Mrs McGuirk emphasized. She said the IMF mission is noticing progress in the implementation of the programme but insists on faster closure of the money-losing enterprises and enforcement of financial discipline on enterprises subject to rehabilitation. The IMF official commended the process of mass and cash privatization. The release of the rest of the tranches under the arrangement with the IMF is contingent on the complete fulfillment of the programme, Mrs McGuirk emphasized.[17] BUSINESS PRESS (SEPTEMBER 2)Sofia, September 2 (BTA) - US giant Westinghouse and a European consortium involving Siemens, Framatom and Igiora, submitted to the National Electric Company tenders for upgrading Units Five and Six of the Kozlodoui nuclear power plant on the Danube, "Standart News" writes. The three-stage programme for repairs should be completed over three years, from 1997 to 1999. It is intended to enhance the safety of the reactors and improve control systems. The upgrading will extend the life of the reactors by 20 years, say experts.[18] WORLD BANK TO SUPPORT BULGARIAN SOCIAL INSURANCE REFORM (SEPTEMBER 4)Sofia, September 4 (BTA) - The World Bank yesterday approved a US$ 24.3 million loan to Bulgaria to help finance a Social Insurance Administration Project, the Bank's Resident Mission to Sofia said. The project will support administrative reforms within the Government's current social insurance programme by helping to restore the financial strength of its Social Security Fund (SSF) and to establish the groundwork for future improvements in Bulgaria's pension system.The Bank-assisted Social Insurance Administration Project will further the achievement of the Government's reform goals by increasing the operational efficiency of the National Social Security Institute (NSSI) set up in October 1995 and improving the Institute's ability to better manage available resources, the World Bank Resident Mission said. The Cabinet has authorized the NSSI to manage the Social Security Fund. The loan will be repayable over a period of 20 years including a five-year grace period at the Bank's standard variable interest rate. Since joining the World Bank in 1990, Bank commitments to Bulgaria total US$ 893.3 million for twelve projects, the Bank said. [19] LEV PLUNGE (SEPTEMBER 4)The press reports in detail the plunge of the lev, and predicts its further depreciation. "Government in Dollar Shock", says a frontpage headline in "Troud". The paper says the dollar soared 14 leva from morning to noon yesterday, hitting historic highs of 230 to 232 leva.[20] BULGARIA-IMF (SEPTEMBER 5)Sofia, September 5 (BTA) - Bank stabilization and restoring public confidence in the banks is crucial for the successful outcome of the reform in Bulgaria, IMF Mission Leader for Bulgaria Anne McGuirk told BTA upon her departure from this country. Following its two-week visit here the mission of the International Monetary Fund (IMF) recommended the Government to speed up the closing down of money-losing banks which destabilize the entire sector. The IMF takes into consideration the considerable progress in the structural reform and the banking sector but expects to see concrete results in the implementation of the conditions of the fourth stand-by arrangement during the next IMF mission, Ms McGuirk said.[21] APRIL-JUNE 1996 EXPORTS VALUED 84,900 MILLION LEVA (SEPTEMBER 5)Sofia, September 5 (BTA) - Bulgaria exported goods worth an estimated 84,974 million leva in the second quarter of 1996, writes "24 Chassa," quoting figures released by the National Statistical Institute. Between April and June, this country imported goods valued at 81,180 million leva.During the period, Bulgaria's largest trading partners were the member countries of the Organization for Economic Cooperation and Development, which accounted for 42,790 million leva of the exports and 41,355 million leva of the imports. This country's trade was most active with Turkey, which absorbed Bulgarian goods worth 8,031 million leva and supplied merchandise valued at 1,500 million leva, the daily says. Exports to the US totalled 951.7 million leva, and imports from there, 2,618 million leva. Bulgaria's exports to the European Union countries aggregated 32,094 million leva, April to June. Among the Fifteen, the largest volume of business was done with Italy: 9,772 million leva in exports and 6,039 million in imports. Exports to Macedonia amounted to 2,962 million leva, and imports to 464 million leva. Bulgaria strictly applies the trade embargo on Iraq. The National Statistical Institute says Sofia did not sell Baghdad a single lev's worth of goods between April and June. [22] BALKAN COOPERATION IN GAS INDUSTRY (SEPTEMBER 9)Sofia, September 9 (Andrei Sharkov of BTA) - There is no alternative to the future cooperation in the gas industry among the Balkan states, Metodi Vachev of Bulgaria's state-owned gas giant Bulgargas said at the opening of the two-day Balkan Gas Conference here today.Bulgargas and several other Bulgarian and Greek gas companies are sponsors of the forum organized by the Balkan and Black Sea Petroleum Association (BBSPA). Being also among the BBSPA founders, Bulgargas' main line of business is the transit of gas - mostly from Russia through the Russian Gasprom - to Turkey. It is expected to start running supplies to Greece, Serbia and Macedonia as well. The conference will help overcome the isolation of national gas markets, reads an address of the organizers yesterday. The forum will help establish useful contacts, "Daily News" was told by Sasho Donchev, Executive Director of Overgas Inc. of Bulgaria. The Bulgarian gas transmitting system includes: - a linear part including 2,100 km of high-pressure gas pipelines with 1,220-mm diameter; - 9 compression stations with total capacity of 190 MW; - over 55 gas distribution stations running supplies to over 150 consumers across the country; - the Chiren underground gas storage facility in Northern Bulgaria (total capacity of 1,000 million cu m); - additional facilities, including telecoms system, a soil corrosion protection facility, repair centres. The 870 km of transboundary gas pipelines operating parallel to the national network will be expanded to a total length of 1,513 km by 2010, said the Bulgarian participants in the forum. It will allow to increase the annual capacity of the network from 11,000 million cu m to 28,000 million cu m. Bulgargas and the Topenergy Bulgarian-Russian joint venture presented their scheme for expanding the market for Russian gas in the Balkans and increasing the capacity of the Chiren gas storage facility. Topenergy is planning to increase by 1,300 km the transit gas pipelines in Bulgaria by 2010 and to built in Bulgaria gas storage facilities with a total capacity of 3,500-4,00 million cu m of gas. Domestic gas consumption last year was just over 5,000 million cu m. Topenergy was set to expand the market for Russian gas in Bulgaria and third countries. The way for achieving this is completing and increasing two-fold the operating gas transiting network. A 50% stake in Topenergy is held by the Russian Gasprom, 25.1% by Bulgargas, 8.25% by Multigroup and Overgas Inc. and 2% by the state-owned Chimimport. For 18 months now, however, no progress has been made with the partnership and the Russian partner seems to be losing patience, Sasho Donchev recently told "24 Chassa". Topenergy has been waiting since April a government decision granting it a concession on the gas pipelines in Bulgaria. Gas deliveries via Bulgaria to the Balkan states and further through Italy to the rest of Europe would boost the Bulgarian economy, help attract investment and generate new jobs, Mr Donchev said in his report to the forum. His view is shared by Claudio Simeoni of the UN Economic Commission for Europe. The conference is due to consdier contracts with Middle East partners for transborder gas supplies to the Balkans. Bulgaria's location gives it an important role in the future transport of gas from Eastern to Western Europe, Jimmy Rose of EUROGAS told the forum Bulgarian Telegraph Agency Directory - Previous Article - Next Article |
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