Bulgarian Telegraph Agency, 96-12-19

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

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

19 December, 1996

CONTENTS

[01] BULGARIAN DIPLOMAT HELD HOSTAGE IN LIMA

[02] PRESIDENT ELECT LEAVES FOR ITALY

[03] MILITARY COUNCIL MEETING

[04] PUBLIC HEALTH ACT AMENDED

[05] TOBACCO LAW AMENDED

[06] BULGARIAN-RUSSIAN PROJECTS MAKE PROGRESS

[07] FIFTY TURKISH COMPANIES ENTER BULGARIA

[08] STEFKA KOSTADINOVA NAMED 1996 TOP ATHLETE IN THE BALKANS

[09] FOUR BULGARIAN SCHOOLCHILDREN AMONG WORLD'S BEST YOUNG MATHEMATICIANS

[10] U.S. AMBASSADOR BOHLEN ON BULGARIAN-AMERICAN RELATIONS

[11] UN GENERAL ASSEMBLY PASSES BULGARIAN-SPONSORED RESOLUTION

[12] P.M. ZHAN VIDENOV: "PARLIAMENT WILL RULE ON CURRENCY BOARD ALREADY EARLY NEXT YEAR"

[13] CURRENCY BOARD. UDF LEADER KOSTOV BACK FROM U.S.

[14] SAFETY OF KOZLODOUI N-PLANT

[15] REFERENDUM ON BULGARIA'S MEMBERSHIP IN NATO POSSIBLE

[16] PRESIDENT ELECT STOYANOV CONGRATULATES M.ALBRIGHT

[17] PRESIDENT VETOES AMENDMENTS TO FOREIGN INVESTMENT ACT

[18] POPULATION DECREASE IN BULGARIA IN 1995

[19] OPPOSITION BINDS INTRODUCTION OF CURRENCY BOARD IN BULGARIA WITH EARLY PARLIAMENTARY ELECTIONS

[20] BULGARIA SHOULD JOIN EU AND NATO, PRESIDENT-ELECT STOYANOV SAYS

[21] DEFENCE MINISTRY, GENERAL STAFF WRESTLE WITH LOGISTIC DIFFICULTIES

[22] 1996 BUDGET UPDATED AGAIN

[23] SUPREME COURTS REPEALS COUNCIL OF MINISTER'S REFUSAL TO REGISTER ALTERNATIVE SYNOD OF ORTHODOX CHURCH

[24] INTERIOR MINISTER REPORTS ON PERFORMANCE

[25] OCTOPUS CONFERENCE ENDS

[26] BULGARIAN PARLIAMENTARY DELEGATION MEETS ISRAELI PRESIDENT

[01] BULGARIAN DIPLOMAT HELD HOSTAGE IN LIMA

The Bulgarian Foreign Ministry took urgent steps to protect the Bulgarian official, addressing a note to the Peruvian Embassy in Sofia. The note expresses serious concern about the fate of the hostages and appeals to the Government of Peru "to do every possible effort for protecting the life and health of the hostages, one of which is a Bulgarian diplomat". The Bulgarian Foreign Ministry addressed the foreign ministries of some countries asking that their diplomats in Lima provide assistance to Mr Stanoev and his family until the incident is settled.

[02] PRESIDENT ELECT LEAVES FOR ITALY

Mr Stoyanov is scheduled to meet President Scalfaro, Prime Minister Lamberto Dini and Foreign Minister Romao Prodi. He is also expected to be received by Pope John Paul II and the Vatican Secretary of State Cardinal Angelo Sodano. Stoyanov said he will invite the Pope to visit Bulgaria. "I carry a lot of presents for Pope John Paul II the most unusual being a table-top sculpture made by several children," Peter Stoyanov stated. Besides he will give Pope John Paul II Bulgarian historical books and five books by the Pope published in Bulgaria.

[03] MILITARY COUNCIL MEETING

The Supreme Military Council discussed also some obligations of the Republic of Bulgaria under the Conventional Armed Forces in Europe Treaty, particularly those concerning arms in "for export" category.

[04] PUBLIC HEALTH ACT AMENDED

[05] TOBACCO LAW AMENDED

Licensing requirements for the manufacture of tobacco goods will also be introduced in compliance with the new amendments. The fees on each license will be set on proposal of the Finance Minister on an annual basis and should be gazetted by March 31. Tobacco goods designed for the home market should have an excise revenue stamp. Bans on advertising tobacco and tobacco goods outside the production and sale units remain into effect. The Act envisages sanctions of up to 1.5 million leva for violations of this provision.

[06] BULGARIAN-RUSSIAN PROJECTS MAKE PROGRESS

Russian Deputy Prime Minister Oleg Lobov, co-chairman of the committee, listed the parameters of a project for transmission of Russian gas across Bulgaria. Lobov said 29,000 million cubic metres of gas may be supplied to other countries under a 30-year concession with an estimated net profit of 5,800 million dollars for Bulgaria.

If the project is given the green light in early 1997, the existing transmission network will have to be expanded. Two compressor stations will have to be built and up to 2,500 million cu m of gas will be supplied during the year, Lobov said. Bulgaria stands to gain 100 million dollars from this.

[07] FIFTY TURKISH COMPANIES ENTER BULGARIA

The seminar was a success, according to Sabahiddin Gazanfer, Secretary General of the Aegean Chambers of Commerce and Industry. He stressed Turkish companies are strongly interested in the Bulgarian market but are wary because they are unfamiliar with Bulgarian law.

Turkey is among Bulgaria's major trading partners in the Balkans, said Bozhinov. He stressed, however, that there is an imbalance at company level - Bulgaria is represented by two companies in the Turkish market as against 1,600 Turkish companies in Bulgaria. The main obstacle is that Turkish law restricts the entry of foreign businesses.

[08] STEFKA KOSTADINOVA NAMED 1996 TOP ATHLETE IN THE BALKANS

Votes were given for 21 athletes in 12 sports. The respondents could choose among 15 Olympic champions which made their task difficult. And yet the charming Stefka Kostadinova emerged the indisputable leader. Kostadinova came ahead of the second in the list, Naim Suleimanoglu of Turkey, and the third, Yugoslav basketballer Vlade Divac, currently playing for NBA's Charlotte Hornets.

[09] FOUR BULGARIAN SCHOOLCHILDREN AMONG WORLD'S BEST YOUNG MATHEMATICIANS

[10] U.S. AMBASSADOR BOHLEN ON BULGARIAN-AMERICAN RELATIONS

Asked of her opinion on the IMF's proposal for the introduction of a currency board in Bulgaria, Mrs Bohlen said that this is a decision which the Bulgarians must take on their own and assess if this is the best solution for them. Given the current level of financial and banking problems in Bulgaria, she believes that the currency board is a very efficient mechanism for imposing financial discipline. Mrs Bohlen said that on the other hand the IMF has moved the idea but has not taken a final decision yet. The IMF insists on the particularization of certain fundamental conditions, which should be fulfilled before it could proceed with the currency board. One of these conditions, she said, is the achievement of a political consensus in the country and the other one, the Government's serious commitment to its application, involving a lot of preparatory hard work so that the board can be made operating and effective.

[11] UN GENERAL ASSEMBLY PASSES BULGARIAN-SPONSORED RESOLUTION

The resolution was moved and coordinated by the Bulgarian delegation during the 51st Session of the General Assembly, and coauthored by all member countries of the European Union, the US, Russia, Belarus, Cyprus, Jordan, Kyrgyzstan, Norway, Poland, Moldova, Romania, Slovakia, Macedonia, Ukraine and the Czech republic.

Taking into accounts political developments in the area in the last year, the resolution expresses serious concern over the continuing negative effects of the sanctions on the economy of third countries, and stresses the need for an adequate response by the international community, the UN and specialized agencies and programmes, including the international financial institutions. It calls on the International Monetary Fund, the World Bank and the European Bank for Reconstruction and Development to continue focussing special attention on the economic problems in the affected countries after the abolition of the sanctions.

The document emphasizes the need to take practical steps to cushion the negative effect of the sanctions by supporting the countries' financial stabilization, infrastructure development, and by promoting trade and their participation in the postwar reconstruction of the region. It reiterates an appeal to UN member countries to render technical, financial and other assistance, including the discussion of steps to encourage export, investment and the development of the private sector in the affected countries.

[12] P.M. ZHAN VIDENOV: "PARLIAMENT WILL RULE ON CURRENCY BOARD ALREADY EARLY NEXT YEAR"

PM Videnov said that the Government is intensively working on the major problems it will consider jointly with the technical missions of the IMF expected on Monday: the 1997 budget bill, budget projections until the year 2000, the privatization programmes and the necessary legislation amendments. The Government wants to come up with its proposals for structural reform, for financial stabilization and economic growth already before Christmas so that they could be put up for public discussion, Videnov said.

[13] CURRENCY BOARD. UDF LEADER KOSTOV BACK FROM U.S.

Mr Kostov is pleased with the talks in Washington as they helped clarify both the UDF's stands and the reasons of the IMF to suggest the introduction of a currency board in Bulgaria. According to Mr Kostov, the international financial circles are interested in Bulgaria and he is pleased that despite all significant and unfavourable for the country economic factors, the circles have not distanced themselves from Bulgaria.

Mr Kostov and the UDF members accompanying him to Washington have worked out on the basis of the consultations a draft of the opposition coalition's attitude towards the currency board proposal. Kostov hopes that the final stand will be formulated tomorrow after the meeting of UDF's National Coordinating Council. The UDF leader would not unveil details about the draft stand but said it has a special clause treating the achievement of a national consensus on the problem of the currency board. The UDF will coordinate the stand with their partners of the United Opposition Forces (the UDF, Popular Union, the ethnic Turks' Movement for Rights and Freedoms) and only after that will officially make it public. According to UDF leader, a national consensus would mean dissolution of Parliament, early elections and replacement of the Governing Board of the National Bank of Bulgaria (BNB, the central bank). This view the UDF upheld earlier remained in force after the consultations.

[14] SAFETY OF KOZLODOUI N-PLANT

In mid-September this year, experts cut three pairs of templates from the fourth seam of the casing of the plant's oldest reactor - power unit one. The carefully prepared operation was conducted by a remote- controlled robot. The templates were then sent for detailed analyses to the Russian Kurchatov Institute. The analyses, supervised by experts of the German Siemens concern, had to determine whether the condition of the metal casing allows the unit's safe operation. The Kozlodoui n-plant generates more than 50% of this country's electricity at the lowest prime costs.

Experts of the Kozlodoui n-plant, the National Electricity Company, the Bulgarian Academy of Sciences, the European Commission, the Kurchatov Institute, the chief contractor Siemens and of the chief constructor Hydropress discussed the results of the analyses. The Siemens officials and the representatives of the Kurchatov Institute said that nuclear power generation in Bulgaria is safe.

The losses sustained from the switched off generator total USD 10 million. Under the PHARE Programme, the EU extended ECU 10 million. Bulgaria has so far utilized ECU 5 million of them, Nikolov said, adding that he hopes that all losses will be compensated.

[15] REFERENDUM ON BULGARIA'S MEMBERSHIP IN NATO POSSIBLE

Q: You said yesterday that Parliament has not used all of its ability on the issue of Bulgaria's membership in NATO. Why do you think this to be the case?

A: If we want to reach consensus and if we want a broad public discussion on the question of Bulgaria's membership in NATO, I think that it is absolutely necessary and obligatory for this to happen in Parliament. Besides, we have reached consensus on a similar question in Parliament. This was the declaration of 1993 on Bulgaria's integration in the European and Euro-Atlantic structures. I think we have to use the same approach in the future as well.

Q: What is your opinion about the possibility of the issue of Bulgaria's membership in the European Union (EU) and NATO to be decided by a referendum?

A: I think this is one of the options, probably the most likely one. I do not consider the possibility an unusual one. Bulgaria's membership in the EU should be decided by a referendum. This country will have to ratify a treaty which may have to require amending even the Bulgarian Constitution. Experience shows that when they sign new amendments to the European treaty, such as the Treaty of Maastricht, even EU member states resort to referendums in most of the cases.

This has greater importance for the issue on NATO, as the public opinion is strongly divided on it. I think that the possibility of deciding the question by a referendum should not be ruled out.

Q: What is your comment on the various positions within the Bulgarian Socialist Party (BSP) on Bulgaria's membership in NATO?

A: [The various positions] indicate that a discussion is under way, which, in my opinion, is a good thing. The fact that the BSP members are not unanimous on the issue shows that [different] opinions can be heard so that we can seek the best and most appropriate decisions. By the way, there are many prominent political figures in the BSP who are in favour of a neutrality. This means that we have to discuss all the pros and cons of this country's membership in NATO, the neutrality, or the option to remain outside the North Atlantic Organization, which is related to the overall development of the political processes in Bulgaria.

Q: At their meeting today, the foreign ministers of NATO's member states discuss the situation in Belgrade. What is your comment on the events in Bulgaria's Western neighbour?

A: We have been following closely the events in Belgrade, which undoubtedly are a cause for concern. I would say it once again that Bulgaria is not interested in political instability, mostly considering the threat of the introduction of sanctions, which we consider very alarming indeed.

We are aware what economic losses this country sustained as a result of the U.N. sanctions against former Yugoslavia over the past few years, and how much we can suffer now when Bulgaria has to resolve serious economic problems. Such a development will be very unfavourable to Bulgaria indeed.

[16] PRESIDENT ELECT STOYANOV CONGRATULATES M.ALBRIGHT

"I am glad that at a time of fundamental changes in the modern world it is precisely you that are becoming chief American diplomat," the letter reads. "Your profound commitment to the principles of democracy and market economy, as well as your understanding of the present-day problems in the former communist countries make me see in your person not only a proponent of the virtues of the American nation but also a friend of my country Bulgaria," Mr Stoyanov

[17] PRESIDENT VETOES AMENDMENTS TO FOREIGN INVESTMENT ACT

Dr Zhelev argues that some of the revisions of the law are inconsistent with the State's interest in attracting foreign investment. "They do not create a better investment climate but, worse yet, abolish some of the effective privileges and imposes fresh restrictions on foreign investments, " the President's reasoning reads.

Dr Zhelev challenges an amendment which makes the provisions of the Act wholly or partially inapplicable to investments made by foreign persons whose countries of origin extend discriminatory treatment to Bulgarian partnerships or citizens.The President also disagrees with an amendment, according to which "no partnership wherein a foreign person holds any interest may acquire a right of ownership to agricultural land." According to Dr Zhelev, the worst restriction which the amended version of the law imposes on foreign investments is the minimum value of 50,000 US dollars or the equivalent in Bulgarian leva or any other foreign currency of which a foreign investment must be to qualify for treatment as foreign investment for the purposes of the Act. The effective law did not set any such threshold. "This practically denies protection to all small investors which now form the bulk of foreign investors in Bulgaria," the President argues. Wrapping up his reasoning, Dr Zhelev expresses the hope that Parliament will realize the pressing need of creating favourable conditions for attraction of foreign investments to Bulgaria and will bring the texts of the law in conformity with its title: Encouragement and Protection of Foreign Investments Act.

[18] POPULATION DECREASE IN BULGARIA IN 1995

From 14.5 per 1,000 population in 1980, the birth rate fell to 8.6 per 1, 000 population in 1995. In that time, the death rate increased from 11.1 to 13.6 per 1,000 population. The mortality rate is higher among people of rural areas and among male adults. The number of Bulgarians getting married decreased from 7.9 per 1,000 population in 1980 to 4.4 per 1,000 population in 1995. In the 1990-95 period a total of 366,000 Bulgarians emigrated abroad.

[19] OPPOSITION BINDS INTRODUCTION OF CURRENCY BOARD IN BULGARIA WITH EARLY PARLIAMENTARY ELECTIONS

"A necessary condition for the success of the currency board in Bulgaria is for the parliamentary forces to officially declare their agreement to dissolve Parliament immediately after the implementation of the measures for the board's introduction," the united opposition said after a meeting of its leaders today. Consultations with the Left, which has a parliamentary majority, are expected to start soon. A special working group will determine the mechanism for holding the consultations.

The largest opposition formation, the Union of Democratic Forces (UDF), stated yesterday that the International Monetary Fund-proposed currency board will not be a successful undertaking under the incumbent Cabinet. The other two parliamentary opposition formations, the Popular Union and the ethnic Turks' Movement for Rights and Freedoms, today agreed with UDF's position. "It is impossible for the gravediggers to be doctors," Popular Union Co-Chairman Stefan Savov said after the meeting of the opposition's leaders.

The opposition pledges for the appointment of a new governing board of the National Bank of Bulgaria (BNB, the central bank), one that will act as a currency board until the latter is introduced.

[20] BULGARIA SHOULD JOIN EU AND NATO, PRESIDENT-ELECT STOYANOV SAYS

In his lecture Mr Stoyanov advanced the thesis about Bulgaria's association with the EU and NATO as a means of its survival and overcoming the crisis. We cannot overcome the crisis on our own, and even if we can, it will be stupid not to use foreign assistance, he said.

[21] DEFENCE MINISTRY, GENERAL STAFF WRESTLE WITH LOGISTIC DIFFICULTIES

[22] 1996 BUDGET UPDATED AGAIN

The 438,932.6 million leva expenditures are increased to 654,238 million. The budget deficit is increased by 125,200 million to fetch 206,000 million leva. The initial version of the budget set the deficit at 7.4% of the GDP.

The budget update was prompted by the sizable interest payments from the public purse as a result of the financial instability in the country over the recent months, the skyrocketing exchange rate and high interest rates in the second half of 1996. The bulk of the increased budget deficit will be financed with a 115,000 million leva credit from the central bank.

[23] SUPREME COURTS REPEALS COUNCIL OF MINISTER'S REFUSAL TO REGISTER ALTERNATIVE SYNOD OF ORTHODOX CHURCH

[24] INTERIOR MINISTER REPORTS ON PERFORMANCE

Among the other main priorities of the Ministry are the combat against economic crime, street crime in the cities and ensuring the safety and security of the citizens. Another important task, according to Minister Dobrev, is the combat against corruption within the Ministry's officers, in the state apparatus and in the bodies of local self- government.

Stabilization and a tendency of decreasing the crime rates has been observed, Minister Dobrev said. Despite the quantitative reductions in the number of crimes, they are becoming more brutal, organized and aggressive, Minister Dobrev said.

One of the major problems the Ministry faces is that it has a comparatively large number of young and inexperienced employees, he said. Other problems involve the lack of system for training, low payments and unfair public assessment, Minister Dobrev added. The managements of certain structures within the Interior Ministry are incompetent, Dobrev stated.

Although not widely spread, cases of disclosure of classified information and corruption in the Ministry are not isolated, Dobrev said. Every time a police raid is planned there is a leak of a part or sometimes even of the whole information, the Minister stated adding the blame lies with the Ministry's leadership and himself. Minister Dobrev said he will tender his resignation in case violations by Interior Ministry officials are detected.

[25] OCTOPUS CONFERENCE ENDS

Behind closed doors, delegations of 16 countries and experts of the Council of Europe discussed various aspects of corruption and organized crime and the threats they pose.

Bulgaria has undertaken a number of steps in this field over the past one or two years, according to Prof. Ernesto Savona, Council of Europe expert and member of the research group on transnational crime. He warned that Bulgaria, which lies on one of the many drugs trafficking routes may soon become a drugs consumer.

[26] BULGARIAN PARLIAMENTARY DELEGATION MEETS ISRAELI PRESIDENT

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