Bulgarian Telegraph Agency (BTA), 96-11-21

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

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

21 November, 1996

CONTENTS

[01] BULGARIAN DEFENCE MINISTER VISITS AUSTRIA

[02] BULGARIA, TURKEY: MILITARY COOPERATION

[03] BULGARIA-TURKEY: COOPERATION IN ENERGY SECTOR

[04] TURKISH MP'S END VISIT TO BULGARIA

[05] CONSULTATIONS ON CURRENCY BOARD IN BULGARIA

[06] UDF PARTIES CALL FOR NO-CONFIDENCE VOTE TO THE CABINET

[07] SUPREME COURT OF CASSATION AND SUPREME ADMINISTRATIVE COURT CONSTITUTED

[08] PRESIDENT ZHELEV PRESENTS NATIONAL FLAG TO BULGARIAN POLAR EXPLORERS

[09] PARLIAMENT RATIFIES U.N. CONVENTION ON SHIPS REGISTRATION

[10] SOCIAL AFFAIRS MINISTER PRAISES TWO-YEAR PERFORMANCE

[11] BULGARIA CONTINUES PARTICIPATION IN SPACE RESEARCH

[12] US DOLLAR GAINS 20 LEVA IN A DAY

[01] BULGARIAN DEFENCE MINISTER VISITS AUSTRIA

Stability in Southeastern Europe and the Balkans is inseparable from European stability, Pavlov said, recommending that Balkan and European cooperation be strengthened as a way of enhancing stability. The two officials discussed the organization of a meeting of the defence ministers of the Southeastern European countries in Sofia in early 1997.

Bulgaria wants to take part in a follow-up peace implementation force (IFOR) in Bosnia and hopes that Austria will give it political support, Pavlov said. Bulgaria's possible participation in IFOR2 will be consistent with its principled position on the crisis in former Yugoslavia, he said. If Bulgaria receives the financial support it needs, it may send a company as part of the Austrian contingent which will be under British command along with Belgian and Dutch troops. If the initiative is approved, Bulgarian troops will train at Austrian centres prior to participating in international peacekeeping operations.

Pavlov and Fasslabend expressed satisfaction with the state of Bulgarian-Austrian military cooperation. Under a 1993 bilateral agreement dozens of Bulgarian officers have trained at Austrian military academies.

[02] BULGARIA, TURKEY: MILITARY COOPERATION

Under the Edirne Document on Complementary Confidence and Security Building Measures, Bulgarian army officers will visit a Turkish army unit on November 21, the Defence Ministry's press office said.

[03] BULGARIA-TURKEY: COOPERATION IN ENERGY SECTOR

"Turkey has ten times more population than Bulgaria but generates only two times more electricity," Ovcharov also said. "For our neighbours, Bulgaria is one of the safest routes, and our Turkish colleagues were not informed by the Russian side about its readiness to build a gas pipeline through the Black Sea."

The amount of electricity which Bulgaria can export to Turkey will be agreed in December when the director general of the Turkish electric company will visit Sofia. Ovcharov expected to arrange the export of 150 million kWh, at 3 to 4 cents/kWh.

During his visit, Ovcharov signed a bilateral protocol on long-term strategic cooperation and discussed opportunities for the modernization of links between the two nations' power grids.

[04] TURKISH MP'S END VISIT TO BULGARIA

Before their departure, the Turkish MPs had a final meeting with members of the Bulgarian Parliament's Commitees on Foreign Policy and European Integration and on National Security.

The Turkish delegation, which arrived Monday, met with President Zhelyu Zhelev, First Deputy Foreign Minister Irina Bokova, Interior Minister Nikolay Dobrev and Trade and Foreign Economic Cooperation Atanas Paparizov.

[05] CONSULTATIONS ON CURRENCY BOARD IN BULGARIA

Today Prime Minister Zhan Videnov, Finance Minister Dimiter Kostov, central bank governor Lyubomir Filipov and Bulgarian Business Bloc (BBB) leader George Ganchev discussed the introduction of a currency board at the office of National Assembly Chairman Blagovest Sendov.

BBB leader George Ganchev said the currency board should be made by the Bulgarian National Bank (BBB, the central bank) and should comprise not more than two foreign experts as consultants not entitled to vote. Ganchev said that the social price Bulgaria will have to pay are delayed pensions and wages for physicians, teachers, the military and no social relief for the Roma.

"I am pleased with my talks with the BBB," Prime Minister Zhan Videnov said after the meeting. "So far I was under the impression that the BBB is against the introduction of a currency board," Videnov added. The Cabinet will be technically ready to introduce a currency board bill in Parliament at the beginning of its winter session, Videnov said.

[06] UDF PARTIES CALL FOR NO-CONFIDENCE VOTE TO THE CABINET

The Union's top priority now is to have early parliamentary elections, the declaration says. The leaders who signed it said it would be premature to set up an opposition party in place of the UDF coalition. On Tuesday the Union's National Executive Board proposed that the next national conference should found a unified party named UDF. This is an attempt to replace the coalition's main task with another one which requires a long, complicated procedure, the declaration says. "We must choose it is either elections or party building," the eleven leaders said.

Most leaders claim they are not against transforming the UDF into a party, but against bringing the issue to the fore at this point in time. They argue that intraparty problems must be put on the back burner.

If the UDF concentrates on creating a party now, the BSP may rally from the blow of the November 3 presidential elections and consolidate for the parliamentary elections, said Alexander Yordanov, leader of the Radical Democratic Party. He said a nascent party was likely to lose the elections. Asked if the RDP would be disbanded if the UDF became a party, he said that sooner or later the UDF would have to turn into a party and the Radical Democrats would seek to become its ally.

The UDF has always been divided over the issue of forming a party, said ex-premier Filip Dimitrov who recently left the UDF-affiliated Conservative Ecological Party. Actions in this direction prevented the UDF from winning a clear majority in 1991 and led to its defeat in the 1994 parliamentary elections, Dimitrov said. He declined to say if his leaving the ecological party was prompted by the initiative to form a UDF party. Things should not be dramatized, he said, because the differences in the UDF can be overcome.

The formation of a party on the basis of the UDF requires a decision at a national conference, said UDF leader Ivan Kostov. Unsurprised by the resistance to the initiative, Kostov said: "It is hard for me to accept that those who were all for, are now against the idea." Kostov said a conference should be held shortly to set the Union's strategic aims, adding that any differences in the UDF will be resolved at the conference. Kostov said he believed he spoke for the truly democratic tendency in the UDF. Some say the views of UDF party leaders are not shared by rank- and-file members. Supporters of a UDF party argue that the coalition-or- party dilemma should be resolved by the parties themselves, not by their leaders.

[07] SUPREME COURT OF CASSATION AND SUPREME ADMINISTRATIVE COURT CONSTITUTED

The functions of the SCC and SAC are regulated in the Constitution and the Judiciary Act which stipulate that justice is administered in a three-instance system. Under the two-instance system effective until the present moment, the Supreme Court acted as the third instance thus fulfilling the functions of the SCC and SAC.

The SCC, which will consist of 72 judges, will be presided by Supreme Court President Roumen Yankov. The SAC will have 36 members; its president will be incumbent Deputy Prosecutor General Vladislav Savov. The two will take office on December 1. The SCC and SAC will have individual budgets. The 1996 budgets of the two courts will be managed by the Supreme Court.

[08] PRESIDENT ZHELEV PRESENTS NATIONAL FLAG TO BULGARIAN POLAR EXPLORERS

[09] PARLIAMENT RATIFIES U.N. CONVENTION ON SHIPS REGISTRATION

The convention includes provisions concerning ships involved in international navigation and the authority on the matter of state administrations. The document also puts the state which registers the ship under the obligation to monitor its staff complement. The convention does not limit this country's right to enforce national legislation and regulation.

[10] SOCIAL AFFAIRS MINISTER PRAISES TWO-YEAR PERFORMANCE

Some 100,000 jobs were created and not a single school or hospital was closed in 1995-96, Koralski said. In 1996 the government accomplished an operation without a precedent in Europe by guaranteeing the bank deposits of members of the public, Koralski also said.

Low incomes have prompted unsubstantiated claims that the left- wing government is pursuing a right-wing policy, Koralski said. Social spending cannot be generous in a period of stagnation, he said, adding that the Social Affairs Ministry cannot ensure much-needed economic growth. The Ministry distributes what the real economy produces and consumption should not exceed production, he said.

Koralski singled out as an important achievement of the left-wing Cabinet and the Ministry the separation of pension funds from the budget and the setting up of an independent National Social Insurance Institute. "Thus not a single lev allocated for pensions was lost during the turmoil in banking," he said, referring to a central bank decision to place under special supervision 14 banks considered an insolvency risk.

Unemployment benefits are paid regularly, Koralski said. "Social insurance looks good compared to all other sectors in the country," Koralski said. He stressed the importance of outreach programmes targeting Gypsies and other disadvantaged groups. The Ministry set up a National Council on Social and Demographic Affairs, which consists of all recognized organizations of the disabled, pensioners, women and so on.

Koralski said that in recent years Parliament enacted "extremely important" laws on a Social Insurance Fund and the social integration of the disabled, as well as amendments to the Labour Code and the pension law. Work on a package of social legislation on voluntary social insurance, labour safety, protection of mothers, children and the family, and civil servants is nearing completion, Koralski said. Parliament will soon debate a law on protection of the unemployed.

"We have failed to make the government and society realize that a socially-oriented policy must be a priority throughout a cabinet's term and not only during the election campaign," Koralski said. He supports the IMF proposal for the introduction of a currency board but says social service payments must be provided for.

The currency board would require a mere 1,000-million-dollar loan from the West, while sanctions enforcement against Yugoslavia cost this country 3,500-4,000 million dollars, Koralski said. Bulgaria has no alternative but to introduce a currency board because hyperinflation would destroy social protection, Koralski said.

[11] BULGARIA CONTINUES PARTICIPATION IN SPACE RESEARCH

The Bulgarian laboratory is developing dosimetric equipment for the international manned Alpha orbital station to replace the old Russian Mir station. All leading nations involved in space research are taking part in building "Alpha".

Bulgaria will also join future international programmes in exploring the planet Mars, Academician Mishev said. Bulgaria suffered no financial losses from the failed Mars'96 mission. Several Bulgarian instruments were installed on the Russian spacecraft the development of which was funded on a joint principle with the other countries participating in the project. Academician Mishev said Bulgarian science rather lost because of unobtained scientific results of exceptional importance.

Bulgaria took part in the Mars'96 mission with instruments for monitoring radiation levels inside and outside the station, for analyzing cosmic plasma and for measuring the three components of the magnetic field on the surface and six meters below the surface of the planet. In its future participation in exploring the red planet Bulgaria will once again count on the financial support of its foreign partners and the National Scientific Research Fund, Acad. Mishev said.

Bulgarian scientists are now working jointly with French and German colleagues on radiometric equipment for the Mars'98 mission.

[12] US DOLLAR GAINS 20 LEVA IN A DAY

This morning the interbank market opened at 290 leva buying and 300 leva/1 USD selling rate to reach 300 and 330 leva respectively later in the day. At the beginning of this year the US dollar exchanged for 70 leva.

The central bank fixed the exchange rate for tomorrow at 287.91 leva per dollar, down from 276.76 leva/USD 1 dollar today. "Attempts are being made to speculate [on the financial market] during the time when decisive measures are being discussed," Finance Minister Dimiter Kostov told reporters today, commenting on the dollar appreciation. The central bank is doing its best; acting within the limits of the budget restriction, we, too, are trying to support the measures to limit the money supply and the pressure on the forex market stemming from it, Kostov said.

"Since the start of November, the inflation rate is one per cent, Prime Minister Zhan Videnov told journalists, responding to a question if this country has reached hyperinflation. According to Videnov, the November inflation will be lower than that in previous months. "The confidence in the lev should be restored; this is why we have been developing the idea about a currency board," Videnov said.

Bulbank dealers attributed the surge of the US dollar to the large withdrawal of deposits over the past two days. Some 11,000 million leva were withdrawn from the State Savings Bank, the Bank said. A small amount was deposited in commercial banks and the remaining were used to purchase about 20 million US dollars.

If the US dollar keeps soaring at this speed it may gain some 40 leva by Thursday, dealers of the 7M and Vi Vesta financial and brokerage houses said. According to them, currently there is no proper trade in hard currency and money changers sell US dollars at individually negotiated rates.

Today's press quotes Lyubomir Filipov, Governor of the National Bank of Bulgaria, as urging Bulgarians not to buy expensive dollars because now the lev is not at its realistic exchange rate but at a speculative level. According to Filipov, the main reason for the lev's weakening is the withdrawal of more than half of foreign exchange deposits of the public provoked by rumours of possible blocking of deposits and Bulgaria's imminent defaulting on its foreign debt. According to the BNB Governor, the central bank will stop the depreciation of the lev by restricting budget and commercial banks funding and by moderate interventions on the interbank market.

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