News from Bulgaria, 96-09-25

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

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

25 September, 1996

CONTENTS

[01] MEETINGS OF BULGARIAN FOREIGN MINISTER IN NEW YORK

[02] BULGARIAN FOREIGN MINISTER MEETS MACEDONIAN COUNTERPART

[03] CONSTITUTIONAL COURT TO RULE ON CLAUSES IN RADIO AND TELEVISION ACT

[04] CONSTITUTIONAL COURT RULES ON THE RIGHT TO STRIKE

[05] NEW BNB MEASURES EXPECTED TO SECURE SECOND TRANCHE OF IMF LOAN

[06] DAEWOO BUYS BEST SOFIA HOTEL

[07] OVER 70,000 MILLION LEVA PRIVATIZATION PROCEEDS EARNED IN 1996

[08] INTERIOR MINISTRY BEEFS UP SECURITY AT SOFIA AIRPORT

[09] BULGARIAN REPLACES FAMOUS ITALIAN ACTRESS IN LEADING PART IN NEW BULGARIAN-ITALIAN PRODUCTION

[01] MEETINGS OF BULGARIAN FOREIGN MINISTER IN NEW YORK

Pirinski and Primakov shared a positive assessment of bilateral relations in different fields. They discussed further steps for liberalization of bilateral trade and other trade and economic issues. The two shared Primakov's view of the close and constructive relations between the foreign ministries of the two countries.

The two ministers stressed the need for lasting stabilization of Southeastern Europe and the Balkans on the basis of implementation of the Dayton accords and the promotion of various forms of regional cooperation. The ministers exchanged views on the development of a European and Euroatlantic system for security that will not create new divisive lines.

They agreed on further bilateral contacts and consultations on the issues discussed during the meeting. The ministers reaffirmed the desire and intention of the two countries to promote long-term close relations in all fields of mutual interest.

Pirinski also met with Italian Foreign Minister Lamberto Dini. The two observed a convergence of views on a wide range of issues in bilateral relations and on the work of international organizations, including the reform in the UN and its leading bodies.

Dini said Italy will work in the Security Council for putting back in place as early as possible the mechanism for humanitarian deliveries to Iraq in return for Iraqi oil, in line with Security Council Resolution 986. In this connection, Italy will support Bulgaria's request for priority participation in the shipment of humanitarian supplies. Dini shared the view of the need for a more flexible approach by the European Commission in helping alleviate bread and feed grain shortages in Bulgaria.

Discussing regional cooperation, the Italian side expressed a willingness to participate in various multilateral activities in Southeastern Europe, including activities involving the Central European Initiative. Dini shared favourable impressions of his participation in the European Bank for Reconstruction and Development meeting in Sofia early this year. He reaffirmed Italy's readiness to update its assessment of opportunities for cooperation with Bulgaria in the field of investment and joint ventures. In turn, Pirinski renewed his invitation for his Italian counterpart to visit Bulgaria at the beginning of next year, which was accepted with gratitude.

The Bulgarian Foreign Minister took part in the official dinner given by UN Secretary General Boutros-Ghali for the leaders of the delegations to the 51st Session.

[02] BULGARIAN FOREIGN MINISTER MEETS MACEDONIAN COUNTERPART

The two Foreign Ministers reviewed bilateral relations, the prospects for multilateral cooperation in the Balkans and interaction within international fora and organizations. The two share a will for activating bilateral ties in all spheres of life and addressing all open question in a constructive spirit.

On Bulgaria's proposal, the sides agreed to hold an expert meeting in Sofia some time soon to draft a bilateral declaration on goodneighbourly relations. They also agreed on the expediency of holding a meeting of the prime ministers soon, at which the above declaration can be signed. Representatives of the two countries' ministries of trade and economy will meet to discuss an agreement on free trade.

The Foreign Ministers were unanimous that the linguistic debates between the two countries must not impede the development of bilateral relations.

Foreign Minister Frckovski agreed with his Bulgarian counterpart that Macedonia should be an active participant in the Balkan cooperation process and voiced support for the principles and objectives of this cooperation set forth in the Sofia Declaration of Foreign Ministers of Southeastern Europe of last July. He also voiced readiness for Macedonia's participation in all forthcoming expert meetings of Southeastern Europe.

The Bulgarian Foreign Minister yesterday attended a reception US Secretary of State Warren Christopher gave for the heads of delegations to the UN General Assembly session.

[03] CONSTITUTIONAL COURT TO RULE ON CLAUSES IN RADIO AND TELEVISION ACT

The constituting parties on the case are the National Assembly, the Government, President Zhelyu Zhelev, Prosecutor General Ivan Tatarchev, the national radio and television, the Union of Bulgarian Journalists, the Free Speech civil alliance and the Department of Journalism and Mass Communications with the Sofia University. The parties should come up with their stands within 14 days, constitutional justice Todor Todorov, rapporteur on the case said.

Mr Todorov said that Prosecutor General Ivan Tatarchev has also asked the Constitutional Court to declare unconstitutional three clauses of the legislation. The Constitutional Court has not yet ruled if the appeal is admissible but the two claims will probably be combined in one case, Mr Todorov believes.

This is the fourth case in the Constitutional Court in the field of mass media and freedom of speech. Early this year at the request of President Zhelev the Constitutional Court interpreted three regulations in the Constitution concerning freedom of speech. Still earlier, at the request of Prosecutor General Ivan Tatarchev the Court declared unconstitutional some powers given to the parliamentary media commission.

[04] CONSTITUTIONAL COURT RULES ON THE RIGHT TO STRIKE

The petition was filed by President Zhelyu Zhelev who asked that this provision be interpreted and two texts of the Settlement of Collective Industrial Disputes Act declared unconstitutional. Under these texts strikes in power engineering, communications, health care, defence, Interior Ministry and judiciary are forbidden.

"The right to strike is a principal right of workers and employees for the protection of their economic and social interests. It can be restricted only in exceptional cases: when a walk-out could endanger the population's life, health and security. This right can also be restricted when the stoppage of work by state employees exercising powers on behalf of the state can impede the operation of the national security," Constitutional Court judge Georgi Markov who was the rapporteur on the case, said.

The interpretation of the constitutional text concerning the right to strike can not be isolated from another constitutional provision saying that "rights shall not be abused, nor shall they be exercised to the detriment of the rights or the legitimate interests of others", Markov added.

There cannot be strikes in the army and the police, the same pertains to the construction and interior ministry troops, the National Investigative Service, the Transport Ministry Troops, etc. because they belong to the system charged to guarantee the independence, territorial integrity and sovereignty of Bulgaria, Markov stated. The officers of the court, prosecutor's office and investigative service cannot go on strike because this would mean that one of the three powers will stop operating and this will cast doubt on the functioning of the state, he added.

[05] NEW BNB MEASURES EXPECTED TO SECURE SECOND TRANCHE OF IMF LOAN

Yesterday the BNB Governing Board placed under special supervision nine commercial banks and raised the base interest rate up to 300 percent. The package of complex measures on the restoration of the financial stability includes reinstatement of the commercial banks' right to use 50 percent of its minimum reserves and providing central bank guarantees for secured and unsecured refinancing of well-performing banks in order to "clean up" the settlements' system.

The major purpose of the introduced measures is to reduce the depreciation of the lev and inflation to a level which will allow lowering of the base interest rate, Filipov said. He described the increase of the base interest as "temporary shock measure". In case the whole package of measures is correctly applied it will prompt calming of the forex market, Filipov said. He added that misgivings about hyperinflation are groundless.

The nine banks under special supervision are cash-strapped but the rest of the commercial banks make profits and they will be supported by BNB, Borislav Stratev, member of the BNB Governing Board and Head of the Bank's Legal Department, said. He said the deposits of citizens and companies in the nine banks total 80,000 million leva which will be repaid to their owners by BNB, if the banks are declared insolvent in compliance with the state protection of deposits law. "We shall do everything to help the banks which can be rehabilitated," Stratev stated.

Apart from incurring additional budget expenditures high interest rates yield revenues, Zdravko Balyozov, member of the BNB Governing Board and Head of the Economic and Monetary Analysis Department, said. According to him the burdening of the budget will be outweighed by the restoring of the confidence in the lev and the stabilizing of the financial system.

IMF approves the measures taken by BNB to stabilize the financial system, IMF Resident Representatives to Bulgaria Franek Rozwadowski told a "Daily News" reporter. The package of measures is the first step the Bulgarian Government has taken implementing its program presented in connection with the fourth stand-by agreement with IMF, Rozwadowski added. The other stages of the program include liquidation of the loss- making enterprises and achieving the macroeconomic indicators set in the program. When these commitments are met IMF will react promptly in connection with the floating of the second tranche, he stated.

The central bank's decision yesterday to place under special supervision nine commercial banks was "a desperate attempt to save what remains of the banking system", said Mouravei Radev, MP of the opposition Union of Democratic Forces (UDF). He said the opposition would insist that each manager of the banks in question be called to account. "When a single bank faces bankruptcy, the blame falls on its management. When a string of bank failures occurs, the blame falls on those who manage the banking system," UDF Deputy Chairman Alexander Bozhkov said, adding that he was referring to the central bank management and to Deputy Prime Minister Roumen Gechev who is in charge of the Bank Consolidation Company. It manages the state interest in commercial banks.

UDF leaders questioned the effectiveness of a base rate increase to 300 per cent. At a news conference today UDF leader Ivan Kostov said it would be absurd to think that monthly inflation which does not exceed 17 per cent should be curbed with 25 per cent monthly interest. Kostov said no central bank official explained what projections prompted the base rate hike to 300 per cent. Alexander Bozhkov said it was important to know how long this interest rate would remain in effect.

The four-fold increase of the monthly interest rates will have an effect on the mass withdrawal of leva deposits from the commercial banks and the citizens will get convinced that they should stop placing their confidence in the US dollar only, according to representatives of the Association of Commercial Banks (ACB). They said, however, that if the base interest rate is kept at this level for more than one month the banks will have difficulties in paying interest. ACB approves the BNB decision aimed at stabilizing the banking system.

"In my view the BNB decisions taken yesterday were indispensable and I hope they will stabilize the financial situation in the country," the Left's presidential candidate Ivan Marazov said upon his departure for Bonn today. If a national strike is declared on the eve of the elections, it will have political nuances and destabilization of the country is not the best solution at the moment, Marazov stated.

The collapse of the banking system is the beginning of a dangerous agony of the state, said Alexander Tomov, presidential candidate of the extraparliamentary Civic Alliance for the Republic and former deputy prime minister of Dimiter Popov's cabinet in 1991. He criticized the government's privatization programme for slating the most profitable enterprises for sale at knockdown prices.

[06] DAEWOO BUYS BEST SOFIA HOTEL

The new owner has pledged to invest not less than 5 million US dollars over the next five years and to preserve the line of business and the number of jobs for a certain period of time.

At the end of 1995 the hotel's fixed assets were estimated at 537 million leva. Over the past few years the hotel has been making an annual turnover of 10 million US dollars and it has no long-term obligations.

The five-star Sheraton is the most prestigious hotel in the Bulgarian capital. It is one of the 400 hotels of the Sheraton chain and its only luxury hotel in Eastern Europe. The hotel, built up in the early 1950s was fully renovated and opened to operate under this name in 1986 under a 15-year management contract with ITT Sheraton. Under the terms of the privatization contract the management contract with ITT Sheraton will remain in force.

[07] OVER 70,000 MILLION LEVA PRIVATIZATION PROCEEDS EARNED IN 1996

Direct payments to the amount of 28,320 million leva have been made and obligations worth over 40,000 million leva have been paid. The new owners have pledged to invest 8,000 million leva by the end of the year and another 25,000 million leva over the next five years, figures of the Privatization Agency show.

The Government recently adopted a decision to accelerate the privatization of 15 large industrial enterprises. They were selected from a list of enterprises prepared by the Agency, Mr Blagoev said. The denationalization of these units is expected to be realized at accelerated rates because the Agency has already made most of the preliminary preparations. The Agency has also prepared for privatization another 100 enterprises. The Agency selected them guided by three main criteria: they should be enterprises from traditionally attractive for investor branches; their real privatization is feasible in short terms; there are prospects for providing investment funds for these enterprises.

Most enterprises will be privatized through negotiations with the potential customers. In the denationalization of 100 per cent of the assets of the enterprises the Agency will hold competitions or auctions. It will seek the assistance of foreign consultants for the bigger deals, Mr Blagoev said. He explained that investment banks or world-known consultant companies will be best preferred.

[08] INTERIOR MINISTRY BEEFS UP SECURITY AT SOFIA AIRPORT

The tightened security measures are introduced on account of the increased number of tips about acts of terrorism and the attempted illegal transfers of hard currency and drugs, the news release of the Interior Ministry's press office says.

[09] BULGARIAN REPLACES FAMOUS ITALIAN ACTRESS IN LEADING PART IN NEW BULGARIAN-ITALIAN PRODUCTION

A dozen of Bulgarian film stars play in "Hunter's Bag": Tsvetana Maneva, Roussi Chanev, Yavor Miloushev, Hristo Shopov, Alexander Morfov and Alexander Pritoup. The film tells the story of three Italians who found themselves in Bosnia a day before the war broke. The woman played by Djoukelova will help them escape unscathed.

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