Bulgarian Telegraph Agency (BTA), 96-11-26

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

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

26 November, 1996

CONTENTS

[01] BULGARIA URGES SUPPORT FOR EMBARGO-AFFECTED COUNTRIES

[02] BULGARIAN DELEGATION LEAVES FOR B.W.C. REVIEW CONFERENCE IN GENEVA

[03] OSCE SUMMIT IN LISBON

[04] SUPREME COURT VOIDS SIX MORE SENTENCES ISSUED BY 1945 PEOPLE'S COURT

[05] FRANEK ROZWADOWSKI: CURRENCY BOARD WOULD NOT NEED A DEPRECIATED LEV

[06] CABINET AND CENTRAL BANK TO OPEN TECHNICAL NEGOTIATIONS ON INSTITUTING CURRENCY BOARD

[07] GHENA DIMITROVA: TO ME THE STAGE IS AN ALTAR AND THE OPERA A SANCTUARY

[01] BULGARIA URGES SUPPORT FOR EMBARGO-AFFECTED COUNTRIES

Since 1993 Bulgaria has been moving and sponsoring resolutions concerning third countries affected by the strict application of the sanctions against the Federal Republic of Yugoslavia, the Chief of the Foreign Ministry's Foreign Economic Policy Department Maya Dobreva recalled at the news conference.

The Bulgarian-proposed resolution, which will be adopted shortly, is expected to be a framework which will allow the Bulgarian state administration to hold successful negotiations and secure better positions for this country. On the basis of previously adopted UN General Assembly resolutions, only in 1996 Bulgaria managed to obtain an increased allocation for the next triennium under the United Nations Development Programme (UNDP). Initially, the funds were fixed at some 700,000 US dollars, but after Bulgarian diplomacy actively intervened, the sum was increased to 2,700,000 dollars. This money will be available to Bulgaria for relocation to specified priority projects, focussing on the eradication of poverty and the implementation of the social security reform..

The new Bulgarian draft resolution stresses the effect of the sanctions on the affected countries and calls on the international community for appropriate forms of cooperation for financial stabilization of the region as a whole, for development of the infrastructure, and for provision of opportunities for promotion of trade, Mrs Dobreva indicated.

[02] BULGARIAN DELEGATION LEAVES FOR B.W.C. REVIEW CONFERENCE IN GENEVA

The Convention is considered the first agreement helping genuine disarmament after World War II.

The working out of an effective regime of verification and of a legally binding additional instrument to the Convention is the principal objective shared by the Bulgarian delegation which will attend the meeting.

Bulgaria signed the Biological Weapons Convention on the date it was opened for signature, April 10, 1972, and ratified it in June 1972.

[03] OSCE SUMMIT IN LISBON

The Lisbon summit is the fourth meeting of state or Government leaders of the OSCE countries.

The meeting will open discussions on the future architecture of European security. It is also expected to launch initiatives to increase the role of the OSCE. Measures will be specified for strengthening OSCE in political and organisational terms and changes will be introduced in its institutions. The Lisbon meeting is also expected to draw conclusions about the operation of OSCE missions in crisis regions. The Balkan meeting of foreign ministers, which was held in July in Sofia is expected to be mentioned during the discussions of examples for positive regional development.

[04] SUPREME COURT VOIDS SIX MORE SENTENCES ISSUED BY 1945 PEOPLE'S COURT

Three of the sentences, a capital punishment and two imprisonments of ten years had been issued against local paper contributors charged with writing in favour of Bulgaria's pro-German policy. The other three sentences envisaged shorter terms of imprisonment, fines and property confiscations.

The People's Court was established under a Statutory Ordinance of the Trial by People's Court of the Culprits for Involvement of Bulgaria in the War Against the Allied Powers and for the Related Crimes. The cases were considered between 1944 and 1945. Regents, royal advisors, ministers, MPs, senior statesmen and military officials were sued under the Statutory Ordinance. The People's Court considered 135 cases with 11,122 defendants. It passed capital punishments on 2,730 people and sentenced the others to different years of imprisonment. The Court acquitted 1,516 people and confiscated property and money. The sentences were unappealable.

In 1992 the Supreme Court decided that the sentences, issued by the People's Court, are subject to supervisory review. Since then the Supreme Court justices have reversed some of the sentences. This drew sharp response from the Bulgarian Anti-Fascist Union which in October, 1996 organised an international conference.. The conference adopted a declaration to the Bulgarian and to the international communities which condemned the reversal of the sentences passed against war criminals of World War II by the People's Court.

[05] FRANEK ROZWADOWSKI: CURRENCY BOARD WOULD NOT NEED A DEPRECIATED LEV

"In order for the adoption of a currency board to succeed, it is necessary that Bulgaria should decide to commit itself to having a currency board indefinitely," Mr Rozwadowski said. "The currency board will probably stay in place for many years but one cannot say how many. It has to be an indefinite commitment," he stated. The IMF Resident Representative assumes that the board will operate within the National Bank of Bulgaria (BNB, the central bank). According to Mr Rozwadowski, however, "the institutional structure of the currency board is not the most important element of it as a currency board is not a board but a rule for conducting monetary policy." The possible introduction of a currency board in Bulgaria will affect the 1997 budget in two ways, Mr Rozwadowski said. First of all, under the rules of a currency board, the 1997 budget will not depend on government borrowing from the central bank. In practice this means that expenditures would have to be covered by tax and non-tax revenues and government borrowing from abroad. "Those would be the main sources of financing of the budget," Mr Rozwadowski said.

Another impact of the currency board on the budget is that interest rates would come down very quickly, the IMF official said. "The interest payments on the budget on the domestic debt will be much lower than they would be in the absence of a currency board. This would make it easier to service the domestic debt and would also release resources for other expenditures on the budget," he stated.

"The lowering of interest rates under a currency board would make life easier for banks," Mr Rozwadowski added. In addition, as confidence returns to the lev, one would expect that money would flow back into the banks. Eventually the banks will become much stronger under a currency board, the IMF official said. However, it is also true that the BNB refinancing to commercial banks will be eliminated except for very special circumstances. What would happen in the banking system under a currency board is that the interbank market would have to start operating again and play a key role, in allocating liquidity and determining interest rates. For Bulgaria, there are two obvious candidates for a reserve currency, Mr Rozwadowski said. These are the US dollar and the German mark. The most important thing is that the reserve currency should be a stable currency, he said.

A currency board introduced by itself will not solve the problems of Bulgaria, Mr Rozwadowski said. "A currency board will succeed if it is the expression and result of an intention by Bulgaria to impose financial discipline on itself and to use the currency board as an instrument for doing so. If this comes hand in hand with other reforms in Bulgaria, in particular structural reform, then the currency board has a very good chance of succeeding," Mr Rozwadowski said.

The full text of the interview will be published in the Friday issue of BTA's English language newsletter, "Bulgarian Economic Outlook".

[06] CABINET AND CENTRAL BANK TO OPEN TECHNICAL NEGOTIATIONS ON INSTITUTING CURRENCY BOARD

The introduction of a currency board was proposed by IMF Europe I Department Deputy Director Michael Deppler during his 10- day visit to Bulgaria in early November. Deppler said that the setting up of a currency board was the best alternative for overcoming the crisis but pointed out that its acceptance would depend on Bulgaria's sovereign decision. He also said that a political consensus was a necessary condition for instituting a currency board.

The Cabinet arrived at the decision to endorse the introduction of a currency board after three weeks of consultations the Cabinet and National Assembly Chairman Blagovest Sendov held with representatives of political forces, trade unions and financial circles, the Prime Minister said. There were no political, social or trade union protests to call into question the possibility of accepting the measure and its implementation, Videnov said.

The Prime Minister stated that another two conclusions had been made in result of the consultations: that immediate action should be taken to institute the currency board in the very first days and weeks of 1997 and that the Government will have to assume full responsibility for it, with Parliament making the final decision.

The restructuring of the 1997 budget, to what extent the banking system has a chance to survive the tight financial policy implemented by the currency board and the financial support for servicing the internal and external debt which the country can rely on are still open questions, Videnov said. He did not specify the amount Bulgaria would need to support its balance of payments.

A two-year government programme will start to be implemented in parallel to the introduction of a currency board at the beginning of 1997. Its purpose is to tighten discipline in handling the budget and provide social protection to the really needy, Finance Minister Dimiter Kostov said. He added that the programme would actually have a wider range: it would regulate all mechanisms operating in the economy and help resolve the problem of the country's foreign debt. Prime Minister Videnov pointed out that the programme for macroeconomic stabilization underlying the 1996 budget would continue to be carried out until the introduction of a currency board.

A further increase in the tax burden is not planned for next year and this does not depend on the introduction of a currency board, the Prime Minister said. He said that the Tax Offences Prevention and Detection Service, set up with the Ministry of Finance, would start operating at the beginning of 1997, which is expected to improve the collectability of taxes to a considerable extent. "A re-registration of banks and lending institutions will probably be proposed without changing the foreign exchange regulations," Dimiter Kostov said. In his opinion, at the moment there is no need of a financial reform but of a change in the role of the central bank in handling the money in circulation. The legal framework will also be changed, making some small admendment to the National Bank of Bulgaria Act, the National Budget Act and the Foreign Exchange Regulations.

At this stage it is not clear what hard currency the Bulgarian lev will be pegged to and what its currency exchange rate would be, Finance Minister Kostov said. In his view, it is reasonable to include the country's gold reserve in the economic turnover and derive an income from it.

The final decision for the introduction of a currency board cannot be made under the conditions of radical political changes such as a parliamentary crisis, ousting the Government or early parliamentary elections, Prime Minister Videnov stated. The political destabilization of the country is the least desired by the Western financial institutions, he said.

So far the opposition has not come up with an official stand on the introduction of a currency bopard. Representatives of the largest opposition formation, the Union of Democratic Forces, stipulated the conditions for assuming responsibility for the setting up of a currency board: a new cabinet elected after the holding of early parliamentary elections, realistic financial projections by the cabinet and the central bank. The two major trade unionn amalgamations, the Podkrepa Labour Confederation and the Confederation of Independent Trade Unions in Bulgaria, insist on specifying the social cost of this measure before its acceptance.

[07] GHENA DIMITROVA: TO ME THE STAGE IS AN ALTAR AND THE OPERA A SANCTUARY

"Now I'm celebrating my 30-year career with the feeling that I've done my job well. I've never known the pangs of failure in those 30 years. I think that I've done what I came for in this world with dignity. I've lived honestly," the singer said.

"I'm proud that I'm Bulgarian and whenever I'm giving an interview I never miss to mention that I'm Bulgarian and that I was born in the countryside, " Ghena Dimitrova said, explaining modestly that she is neither a myth nor a legend, just a human being whom God endowed with a beautiful voice she has been using for 30 years now.

"I began to sing when I was a little girl. Whenever I saw two people in the same place I would start singing to show them what I could do," the singer said. And she really showed the world what she could do, revealing the greatness of her talent, the beaty of her voice and her inexhaustible artistic vigour. Dimitrova's magnificent voice and her proverbial industriousness won the singer highest international reputation. She can sing in seven operas performed in different parts of the world within ten days. She can work twelve hours a day. She can get from her seat and go on stage right away to stand in for an illsinger and save the performance. Ghena Dimitrova can do it because she believes that great things in life require great sacrifices. "She doesn't spare herself, she is absolutely selfless. She is really great," her students said.

"Once on the stage, you should excite the audiences and grip people's souls," the famous prima donna said about her credo.

Ghena Dimitrova made her debut in Verdi's "Nabucco" at the Sofia National Opera House in 1967. Only three years later she sang at La Scala in Milan. She has sung at the most prestigious opera theatres in the world, working with the greatest conductors and directors of today. Opera critics describe her as "the voice of the century". Ghena Dimitrova has won the most prestigious awards given to opera singers, including the Giacomo Puccini one for lifetime achievement.

"My real life is on the stage. There is no rest as long as I can breathe. I'll retire only when I'm booed out of the stage," the singer said.

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