Bulgarian Telegraph Agency (BTA), 96-11-19

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

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

19 November, 1996

CONTENTS

[01] PRESIDENT ZHELEV'S CONSULTATIONS ON CURRENCY BOARD IN BULGARIA

[02] PRESIDENT ELECT PETER STOYANOV MEETS BRITISH FOREIGN SECRETARY MALCOLM RIFKIND

[03] TRANSPORT MINISTERS OF COUNTRIES OF BLACK SEA ECONOMIC COOPERATION AND CENTRAL EUROPEAN INITIATIVE TO MEET IN SOFIA

[04] BULGARIAN DELEGATION HEADED BY DEFENCE MINISTER LEAVES FOR WEU MEETING

[05] NATO SENIOR OFFICIAL VISITS

[06] TURKISH PARLIAMENTARY DELEGATION VISITS

[07] INTERPRED SALE FALLS THROUGH

[08] DEPUTY PARLIAMENTARY COMMITTEE CHAIR HANDS WHITE PAPER TO PROSECUTOR GENERAL

[09] RUN ON STATE SAVINGS BANK

[10] BULGARIA URGES STEPPED UP SECURITY FOR BULGARIANS IN ALGERIA

[01] PRESIDENT ZHELEV'S CONSULTATIONS ON CURRENCY BOARD IN BULGARIA

Representatives of the United Democratic Forces, and more specifically the Union of Democratic Forces (UDF, the biggest opposition formation), today told the President they were holding consultations with the leading nations in the International Monetary Fund (IMF) - Germany, France, Britain and the US - on the IMF proposal to introduce a currency board, said UDF floor leader Yordan Sokolov after his meeting with Zhelev. Sokolov stressed the opposition will not announce its stand before the end of these consultations.

The proposal to introduce a currency board in Bulgaria was made by the Deputy Director of the IMF European I Department Michael Deppler during his 10-day visit here a week ago. He said this was the best option for the country in the present economic and financial situation.

According to the opposition, the government should take the initiative and speak for or against a currency board. It is alarming that the Cabinet is trying to shift its responsibilities to Parliament and the Bulgarian National Bank, said Sokolov.

The talks with the IMF are being carried out with the Government; the Government is the institution which should ensure the necessary political consensus, Stefan Savov, co-chairman of the parliamentary Popular Union, said after meeting with the President. According to him, the IMF has not set a final deadline for the acceptance of its proposal, but it is a must to reach a consensus in the country. The Popular Union will support the introduction of a currency board only if the present Government resigns and early parliamentary elections are scheduled, Savov also said.

The United Democratic Forces will take the responsibility for running the country only after early parliamentary elections are held, said Ahmed Dogan, leader of the ethnic Turks' Movement for Rights and Freedoms (MRF), which is part of the united opposition. Otherwise, Dogan said, the BSP would play for time and drag its feet over the problems. If the Left comes up with an acceptable proposal for the introduction of a currency board, the MRF may go along with it, Dogan said. This will require a consensus, however, which is hard to reach while the present government is in office, he said.

This country needs a Bulgarian-led currency board run by Mariana Todorova, ex-chairperson of a parliamentary public debt committee, and Dimiter Ivanov of the Oxford Institute of International Affairs, said Georgi Dilkov of the parliamentary Bulgarian Business Bloc. George Ganchev, the BBB leader, placed third in the recent presidential elections. The business party wants two foreign consultants on the board as well.

President Zhelev will give his final opinion after a careful analysis of the views of all political forces and representatives of the government and finance, presidential adviser Verzhinia Velcheva said today. Zhelev believes that with or without a currency board, Bulgaria urgently needs stabilization policies taken by a stable government, Velcheva said. Unless something concrete is done about it, soon there may not be a state to govern, according to Zhelev.

[02] PRESIDENT ELECT PETER STOYANOV MEETS BRITISH FOREIGN SECRETARY MALCOLM RIFKIND

During the meeting at the Foreign Office, Rifkind congratulated Stoyanov on his convincing win at the presidential elections. He said he was not surprised, because as early as their first meeting in London last June Stoyanov impressed him with his belief in his victory, the press office said.

The two discussed the proposal for the introduction of a currency board in Bulgaria. Stoyanov expressed his opinion that the currency board can be a success, if it goes hand in hand with structural reform and nationally responsible privatization, carried out by a stable Government which is supported by its own party, the rest of the political forces and the Bulgarian public, according to the press office.

Stoyanov also raised the issue of humanitarian assistance for children's and rest homes in Bulgaria this winter. Rifkind committed his support in this area, both in Britain and by lobbying in the European Union.

[03] TRANSPORT MINISTERS OF COUNTRIES OF BLACK SEA ECONOMIC COOPERATION AND CENTRAL EUROPEAN INITIATIVE TO MEET IN SOFIA

The idea for the ministerial meeting developed at a BSEC forum in Bucharest, Romania, last spring. It was later endorsed by the participants in the meeting of Balkan foreign ministers in Sofia in July.

The participants in the November 20 and 21 meeting will discuss the transport policy and the interaction in the implementation of a number of infrastructure projects. The officials will also discuss the Bulgarian proposal, made at the Balkan meeting in July, for the setting up of a trans-regional transport infrastructure centre in Sofia, Foreign Ministry Spokesman Pantelei Karasimeonov today said.

Invited to the forum are the 22 BSEC and CEI member states and guests of Germany, France, the United States, Japan, the European Commission, the U.N. Economic Commission for Europe, the European Investment Bank, the European Bank for Reconstruction and Development, the World Bank and the International Monetary Fund. The Transport Ministers of 12 countries have already confirmed their participation, Transport Minister Stamen Stamenov told a news conference on November 14.

Bulgaria will undertake to coordinate the interests of all BSEC and CEI countries and the countries of the Balkans and Southeastern Europe in the launch of transport corridors. Countries of the Caucasus and of Central Asia such as Iran recently voiced interest in the development of transport links with the Black Sea region and Central and Eastern Europe, and improvement of the ferry services across the Black and Caspian Seas, Stamenov said also. Meetings of the Bulgarian Transport Ministry with officials of the Caucasian countries and Iran have already considered the opportunities for extending the Varna-Ilichovsk ferry line to the Georgian port of Batumi.

[04] BULGARIAN DELEGATION HEADED BY DEFENCE MINISTER LEAVES FOR WEU MEETING

The meeting will be attended by the foreign and defence ministers of 28 countries. The foreign ministers will discuss future European security architecture and the defence ministers the role of the WEU in crisis regulation and peacekeeping operations.

Defence Minister Pavlov told journalists that the draft resolution of the meeting covers important issues such as when and how WEU forces should be used, under what circumstances, independently or under NATO aegis, etc.

"We support the basic document to be discussed at the meeting and will propose a more active use of the potentials of the associated countries," Defence Minister Pavlov said upon his departure.

In Belgium Defence Minister Pavlov will confer with his counterparts of Bulgaria's neighbours from whom he expects confirmation of their participation in the meeting of defence ministers of Southeastern Europe early next year.

Bulgaria was associated to the WEU in May 1994 and its status of associated partner entered into force officially in March 1995.

[05] NATO SENIOR OFFICIAL VISITS

Apart from General Mihov, General Betturham is scheduled to hold talks with Chief of the Bulgarian General Staff Colonel General Tsvetan Totomirov and with Deputy Defence Minister in charge of military and political affairs Dimiter Mitkov.

Tomorrow, the NATO official is scheduled to meet Chief of the Military Office of the President Major General Stefan Dimitrov to discuss the future cooperation under the Partnership for Peace programme.

[06] TURKISH PARLIAMENTARY DELEGATION VISITS

The Turkish parliamentarians are scheduled to have talks with officials of the Trade Ministry, the Ministry of the Interior, the Foreign Ministry and the Cabinet. The delegation will be received by President Zhelyu Zhelev.

At his meeting with the Turkish guests today, Sendov expressed his satisfaction with the progress of the contacts between the two countries' Parliaments, which, in his view, will strengthen the stability in the region, the Parliament's press office said. Sendov also talked about the crisis in Bulgaria and the problems in the banking system.

The National Assembly Chairman expressed his positive attitude towards Bulgaria's membership in the Parliamentary Assembly of the Black Sea Economic Cooperation. Sendov said that the Committee on Foreign Policy and European Integration will soon vote a unanimous decision on the issue. The Turkish officials congratulated the act.

The Turkish guests expressed a desire to expand border trade at the Malko Turnovo border checkpoint. They said that Bulgaria and Turkey should intensify the relations in the tourist industry. The Turkish side showed an interest in Bulgaria's winter resorts for which it could provide investments, the press office said. The talks addressed issues of the social welfare of the Bulgarian immigrants in Turkey.

Later today, the Turkish delegation met with members of the parliamentary Committee on Foreign Policy and European Integration. The officials expressed their satisfaction with the development of the bilateral contacts, the Committee's Chairman Nikolai Kamov said after the meeting. The sides paid special attention to unsolved problems, including border, social and consulate ones.

Kamov expressed his satisfaction that the Turkish MPs committed themselves to raise the issue of the Bulgarian church property in Istanbul, including the Bulgarian hospital and school there, in the Turkish Parliament.

[07] INTERPRED SALE FALLS THROUGH

He blames the banking crisis for the frustration of the deal. Under the contract, 70 per cent in the Interpred shares were to be sold for 34 million US dollars to the Interpred Consortium, consisting of Maxcom Holding and 12 members of the Interpred management team. The buyers failed to raise the money as part of the funds were blocked at the Slavyani Bank and Elit Bank, which have been placed under special supervision as insolvency risks. The consortium has failed to locate alternative sources of funding abroad, Mr Blagoev says.

Interpred's privatization has seen several successive failures so far. This is an unchallenged champion in sale flops and threatens to qualify as the scandal of the year, today's "Troud" comments.

[08] DEPUTY PARLIAMENTARY COMMITTEE CHAIR HANDS WHITE PAPER TO PROSECUTOR GENERAL

On November 14 Sougarev discussed his white paper at a press conference. He then said, "The banking system in Bulgaria is inherently vicious because it was created for the purpose of robbing the nation by those authorized to represent it. If there is anything unique in Bulgaria's so called 'transition', it is the major role of the banking system in the transformation of the absolute political power of the former Communist party into economic power."

Today Sougarev told reporters he had in mind First Private Bank, First East International Bank, the Bank for Agricultural Credit, the Yambol bank and others of a total 14 institutions placed under special BNB supervision or faced with bankruptcy proceedings. The MP said he did not deal with TSbank, although "there are lot of things to be said about it, too". He has documents about its establishment and the increase of capital but would not make further comments.

Asked by the BTA if he was sure of the authenticity of his materials, Sougarev said he had no doubts, as the information was cross-checked using different sources. He ruled out the possibility of the documents being planted. Such a theory can be valid, if the banks in question had been related to any one particular group, which is not the case, said the MP. "In a civilized country, in a situation like this, the government would long have resigned and bank officials would have been under investigation," Sougarev said.

"I would not speak of the specific party which has indeed been implicated in pressuring for the refinancing of separate banks," said the MP. According to him, the blame hardly lies with the ruling Bulgarian Socialist Party alone, as there are people connected with other political forces who are also responsible for the collapse of the banking system.

"I do not exclude from this circle people who were close to the opposition UDF, such as the Chairman of the Economic Committee in the former National Assembly Assen Michkovski," Sougarev said. The MP believes that a large portion of the people employed in the banking system are former Communist party secretaries or former agents of the Communist State Security. According to him, they "took a crash retraining course, and their incompetence is one of the reasons for the bank collapse".

[09] RUN ON STATE SAVINGS BANK

In a fax to BTA today the State Savings Bank gave assurances that it has no liquidity problems and is meeting withdrawal claims as usual, that it has not and will not put any restrictions, and holds enough ready cash to serve customers without restrictions. "We appeal to our customers and all Bulgarian citizens not to succumb to panic and rumours," the SSB said.

Last week the press ran comments that the State Savings Bank may run into financial difficulties because over the last few months it refinanced several cash-strapped commercial banks, some of which face liquidation. The Savings Bank's condition is not influenced by bank refinancing, its President, Bistra Dimitrova, said at a one-hour hearing in Parliament last Friday. She said only 17 per cent of SSB assets are in the form of commercial bank deposits, with a mere 8 per cent of its assets held in banks placed under special supervision.

During a recent ten-day visit here Michael Deppler, Deputy Director of the IMF European I Department, proposed that a currency board be introduced to bring macroeconomic stability to Bulgaria. The proposal was made during official talks with President Zhelyu Zhelev and Prime Minister Zhan Videnov.

In the wake of the talks rumour spread that the State Savings Bank would be adversely affected by a currency board. Various sources claimed the board would not provide enough funds to cover government securities and they would be strictly limited. Official reports show that two-thirds of SSB resources are invested in government securities.

The State Savings Bank is a unique Bulgarian institution which attracts mostly small depositors. It manages resources of over 175,000 million leva and has the most ramified network with 485 branches and over 20,000 representative offices around the country. The SSB has between 60 and 70 per cent of the Bulgarian bank market.

[10] BULGARIA URGES STEPPED UP SECURITY FOR BULGARIANS IN ALGERIA

At a meeting at the Foreign Ministry earlier today, Algerian Ambassador in Sofia Hadjem Belaide expressed condolences on behalf of the Algerian government. An official note delivered by the Ambassador emphasizes the firm intention of the Algerian authorities to do their best to find and punish the cruel and unprovoked murder, according to the spokesman.

The Bulgarian side expressed concern over the tragedy, and asked the Algerian government to step up measures for the security of Bulgarian citizens working or living in Algeria. The Foreign Ministry instructed the Bulgarian Embassy to urge compatriots there to strictly observe instructions proceeding from the complex situation in that country, Karasimeonov also said.

According to official figures, Bulgarians in Algeria number 60, which is one-hundredth of their number several years ago. Some 120 foreigners have been killed in Algeria since 1983, but this is the first Bulgarian victim.

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