Bulgarian Telegraph Agency (BTA), 97-01-28

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

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

28 January, 1997

CONTENTS

[01] PRESIDENT STOYANOV SUGGESTS A WAY OUT OF THE POLITICAL CRISIS

[02] REACTIONS TO THE PRESIDENT'S PROPOSAL

[03] GERMANY WILL SUPPORT POLITICAL CONSENSUS IN BULGARIA

[04] HEAD OF PARLIAMENTARY ASSEMBLY OF COUNCIL OF EUROPE ON BULGARIA

[05] INTERNATIONAL CONFERENCE ON THE INTRODUCTION OF A CURRENCY BOARD IN BULGARIA

[06] ELECTRICITY PRICES TO KEEP PACE WITH US DOLLAR HIKES?

[07] THE PAY OF THE MILITARY IN BULGARIA

[08] BULGARIA RECEIVES TURKISH HUMANITARIAN AID

[09] OPPOSITION PROTESTS - DAY 21

[01] PRESIDENT STOYANOV SUGGESTS A WAY OUT OF THE POLITICAL CRISIS

Stoyanov declared himself to be for early general elections; ten days before them, the present Parliament should adopt the most urgent legislation and authorize a caretaker cabinet, supported by all the parliamentary forces, to hold negotiations with the international financial institutions. The President called on the opposition to return to Parliament and take part in the debate and adoption of all necessary legislation.

"For a month now Bulgaria has been in the grip of a grave political crisis. The country plunged into hyper-inflation. It is necessary to achieve swift political and financial stabilization so that Bulgarians can survive the winter; the most pressing reforms should be carried out in parallel to it," Stoyanov said. In his view, Bulgaria needs the help of international financial institutions and of the European countries, but it can receive aid only if it has a credible government and reforms become a fact.

The President pointed out that the country needs rapid reforms in view of the debt service payments it has to make, the largest one due in July 1997. "A moratorium on this payment is out of the question. Until then the country should have taken the necessary steps to carry out structural reform which would provide sufficient financial resources," Stoyanov observed.

He recalled that so far there has been no change in the positions of the major political forces. The United Democratic Forces demand that Parliament dissolves itself immediately and that early general elections be held, while the Democratic Left insists on the adoption of laws related to the introduction of a currency board in the present Parliament and on receiving a mandate to form a cabinet.

"The need of rapid actions, confirmed unambiguously in the European Union's declaration, has prompted me to address the major political forces and all citizens of Bulgaria with a concrete proposal for a way out from this disastrous for Bulgaria crisis," Stoyanov said. He called on the United Democratic Forces to show understanding and return to Parliament temporarily and appealed to the Left to decline the mandate for forming a new cabinet for the sake of reaching a consensus. At the same time the President declared he would perform his constitutional duties and ask the Left to form a second government.

Peter Stoyanov called on the parliamentary forces and the MPs to brace their energies so that Parliament, working without a pause, can adopt the following laws: an amendment to the National Budget Machinery Act to enable the government to work full-fledgedly until the 1997 national budget bill is passed; the package of laws required for the introduction of a currency board, which will make it possible to continue negotiations with the international financial institutions and get vital financial aid in support of reforms in Bulgaria; a decision that would authorize the future caretaker cabinet to hold talks with the international financial institutions; an anti-crisis programme to contain hyper-inflation, ensure the survival of Bulgarians until spring, and carry out structural reforms.

"A joint effort by all MPs would help resolve the present deadlock, and a refusal by all parliamentary groups to form a cabinet would allow me to appoint a working caretaker government in keeping with the Constitution," Stoyanov said. In his words, this should be a government supported by the main political forces and the democratic institutions in Bulgaria, a government of consensus and of change.

According to the President, if his proposal is accepted, after the early parliamentary elections a working government, supported by the next Parliament and the majority of Bulgarian citizens will emerge. The elections would restore the Bulgarian people's confidence in the democratic institutions and procedures, which guarantee the peaceful transition to a democratic society and a market economy. The President pointed out that in the meantime the caretaker government will have to implement an anti-crisis programme agreed to by all political forces in the present Parliament, negotiate and sign agreements with the World Bank and the IMF. The ratification of these agreements by the new Parliament can happen in May, and already in June Bulgaria can receive assistance from the international financial institutions to implement structural reforms, according to the President.

He invited the leaders of all parliamentary factions and independent MPs to meet with him Tuesday and answer his proposal. He also invited to the meeting the Socialist nominee for prime minister N.Dobrev. "I will ask the Socialists to form a government, being very much aware that if we miss the chance for political compromise now, the crisis will hardly be resolved and people will hardly go back home," Stoyanov said in his address.

He made the address after a full day of consultations Monday with the leaders of all parliamentary groups, the Left, the opposition Union of Democratic Forces, Popular Union and Movement for Rights and Freedoms, the Bulgarian Business Bloc and independents who split from the BBB.

[02] REACTIONS TO THE PRESIDENT'S PROPOSAL

"First of all, we should praise the President's statement that this country needs a working Parliament to pass the most urgent laws. Secondly, we stress the President's statement that there has to be a stable government. We know that this is the position of the European Union, and of part of the representatives of the diplomatic missions here, as well as of the representatives of the European political elite who expressed their views on the issue," Bulgarian Socialist Party (BSP) leader Georgi Purvanov told the media. He also expressed a doubt that Stoyanov's proposal may turn into a "distorted version of the proposals put forward by the United Democratic Forces". Purvanov said further that Stoyanov's proposal will be discussed at a joint meeting on Tuesday of the parliamentary group of the Democratic Left and the party leaderships the coalition partners: the BSP, left agrarians and ecologists. After consultations with President Stoyanov earlier on Monday, Purvanov said that the President is moving towards finding sensible and constructive ideas. The Socialist leader stressed that the Left expects that the President will ask it to form a new cabinet on Tuesday at the latest.

"We must do our best to support the President's efforts to find a way out of the crisis," opposition Union of Democratic Forces (UDF) leader Ivan Kostov said. He said that the Political Council of the United Democratic Forces (UtdDF: UDF, the Popular Union and the Movement for Rights and Freedoms) will meet on Tuesday morning. "There is room for compromise. If everybody makes an effort to compromise, Bulgaria can be spared many hard days," Kostov said after consultations with UDF leaders and the President. He said he understands it is a constitutional obligation for the President to give the mandate to form a government to the Left, and that the opposition will not blame him for doing so, but reiterated that the opposition stands have not changed.

MRF leader Ahmed Dogan said that he supports the President's efforts to find a formula to put an end to the deadlock in negotiations and reach national consensus. According to Dogan, Stoyanov's proposal that within 10 days Parliament pass the most urgent laws is an important suggestion, but it could be accepted if the Left declines to form a new cabinet. "If there are guarantees that the Left will decline to form a new cabinet, I think that the UtdDF can accept the President's proposal to return in Parliament, " Dogan said.

Bulgarian Business Bloc leader George Ganchev congratulated President Stoyanov for the "moderate tone" of his address. "Stoyanov apparently has wise and professional points," Ganchev said. Some of his proposals, however, are impossible to implement, as for instance the 10- day time limit for the work of the incumbent Parliament, Ganchev said.

[03] GERMANY WILL SUPPORT POLITICAL CONSENSUS IN BULGARIA

After an hour an a half meeting with President Peter Stoyanov, Mr Erler said he conveyed to the Bulgarian head of state the decision of the German MPs not to leave Bulgaria alone in the current difficult times. Sendov told the guest his view the best time for holding elections in Bulgaria will be in October-November, the parliamentary press office said. Mr. Erler described the situation in Bulgaria as very serious and dangerous, particularly in the context of the events in Serbia and Albania and the general aggravation of the situation in the Balkans. Without the minimum of compromise among the political forces [in Bulgaria], I see no solution, Mr Erler told reporters after the meeting. In his view the Bulgarian politicians must reach a consensus among themselves and thus prevent the situation from further worsening.

An early morning meeting with IMF's Resident Representative in Bulgaria Franek Rozwadowski was first on Mr Erler's Monday schedule. The IMF is ready to provide assistance to Bulgaria if it adopts all the necessary laws and takes the economic decisions needed for the introduction of a currency board in the country, Mr Rozwadowski told the German MP. It would be disastrous for both Bulgaria and foreign investors if to impose another moratorium on the foreign debt payments and this is a danger which is still impending, Mr Erler believes.

[04] HEAD OF PARLIAMENTARY ASSEMBLY OF COUNCIL OF EUROPE ON BULGARIA

Responding to reporters' questions, Ms Fischer gave her views about the situation in Albania, another Council of Europe member-state. She expressed her regrets about the recent developments there and denounced the violence that was used as a means to solve the problems. Ms Fischer stressed that the Council of Europe has warned the Albanian government against the creation of pyramid investment schemes in the country.

"We shall lend support to the democratic forces in Serbia," Ms Fischer also said, adding that failure to accept democratic development by the Serb authorities will have a negative effect on the possibility for a peaceful solution of the political crisis in that country.

Participants in this session of PACE will take decisions which will prepare the Council of Europe for the 21st century, Ms Fischer said. Most important among them will be the establishment of mechanisms guaranteeing the security of the Council of Europe member states in various fields: the military, the social, and in the consolidation of democracy. Another important issue is to develop more efficient mechanisms to control the implementation of commitments made by the member states, as well as measures to sanction their failure to do so, Ms Fischer said.

[05] INTERNATIONAL CONFERENCE ON THE INTRODUCTION OF A CURRENCY BOARD IN BULGARIA

Participants in the event also heard reports by World Bank Resident Representative in Bulgaria Alberto Musalem, Argentinean Ambassador to Sofia Ms Nelly-Maria Penabad, Albert Trayner of Raiffeisen Bank, David Boren of Salomon Brothers International, and World Bank advisor Lyubomir Hristov. Attending the conference were politicians, MPs, Bulgarian bankers and business people.

"Today, when we are discussing the possibility of introducing a currency board in Bulgaria, it is not foreign currency reserves that this country lacks but rather time and wise politicians," former finance minister and incumbent chairman of the Central Cooperative Bank Stoyan Alexandrov said. Alexandrov said that in a matter of weeks the Bulgarian government may announce a moratorium on payments on this country's foreign and domestic debts. "I ask myself whether it is not too late to introduce a currency board and whether the option to let hyperinflation run free and introduce full dollarization of the economy is not a better option," Alexandrov said.

Hristov said that if the currency board is to succeed in Bulgaria it should be accompanied by a fiscal board. "It is expected that the dollar will be undervalued which will lead to slower curbing of inflation and keeping high interest rates," Hristov said. He said also that the worsening banking crisis in this country further increases the risk of a currency board failure.

The proposal to introduce a currency board as a way to achieve a macroeconomic stabilization in Bulgaria was made by Deputy Director of IMF European I Department Michael Deppler during his visit to Bulgaria in early November 1996.

[06] ELECTRICITY PRICES TO KEEP PACE WITH US DOLLAR HIKES?

The proposal envisages that the Cabinet's decision of last October to freeze heat prices be canceled and that limit prices for the heat used by state-financed enterprises are introduced instead. According to the Ministry, the price rises will help prevent further decapitalization of the sector and will stop indirect subsidies to the large industrial enterprises through their electricity bills. It will be more beneficial if schools and hospitals receive direct subsidies for the real heat power prices, Mrs Dilovska believes.

The National Electricity Company (NEC) earns 10 million US dollars monthly from the export of electricity. It is planned that the NEC doubles this export so that in the conditions of a currency board it ensures stable inflow of foreign currency. The latest electricity hikes of 45 per cent were introduced on January 1, 1997. Throughout 1996 electricity marked up 600 per cent while the Bulgarian lev depreciated some 300 per cent.

[07] THE PAY OF THE MILITARY IN BULGARIA

[08] BULGARIA RECEIVES TURKISH HUMANITARIAN AID

Prof. Stoyan Saev, Chairman of the National Committee of the Red Cross, said Turkey responded to Bulgaria's call for assistance issued last September through the International Federation of Red Cross and Red Crescent Societies. Prof. Saev said Bulgaria's call was also answered by Switzerland, Sweden, Denmark, Norway, Canada, Japan and other countries.

In 1995 Turkey donated medicines worth 33,000 dollars to the southern Bulgarian town of Kurdjali. After a severe earthquake in Dinar (Turkey) in 1995, the Bulgarian government sent relief worth 2 million leva.

[09] OPPOSITION PROTESTS - DAY 21

Supporters of the three main trade unions in Bulgaria, the Podkrepa Labour Confederation, the Confederation of Independent Trade Unions in Bulgaria (CITUB) and the Promyana alliance, started protest actions outside Parliament at 10 a.m. on Monday.

In a letter to President Peter Stoyanov CITUB proposed to the Head of State to convene the Consultative Council on National Security. The national market is collapsing and this poses a risk to the national security, the trade union said in the letter.

Students marched once again in downtown Sofia and then joined the opposition's daily rally in front of the St. Alexander Nevsky cathedral. Opposition MPs and opposition leader Ivan Kostov addressed the protestors. "The breaking of the political deadlock starts tomorrow and you must show resolve, hardiness and stamina to win our victory," Kostov said. "I have just received President Stoyanov's proposal for a way out of the crisis. He suggests the BSP should decline to form a cabinet," Kostov said to chants of "Stoyanov," from the protestors.

The academic council of the St. Kliment Ohridski University of Sofia agreed to postpone the examinations of full-time students scheduled for the period between February 3 and March 2.

About 400 Roma of the northern region of Rousse blocked for four hours the road linking Rousse and Veliko Turnovo demanding payment of delayed welfare benefits, BTA local correspondent reported.

In a statement adopted by its General Assembly, the Bulgarian Academy of Sciences called on the political forces to take the shortest path to forming a caretaker government and holding early parliamentary elections, enshrined in the Constitution.

Socialist Youth for National Concord, an initiative committee styling itself as left-leaning but unaffiliated to the Bulgarian Socialist Party, said it would stage a rally on January 31 under the motto "Stop the United Opposition's Manipulations". The committee expressed a hope that clashes with other students and sympathizers of the united opposition would be avoided.

The warning strike in national television entered its third day after negotiations with the management fell through on Friday through the latter's fault, the strike committee chairman told journalists. Protestors want censorship and interference in the work of TV employees to stop. On Monday evening a rally was staged in front of the television building in support of the journalists.

The protests of medics, teachers and workers are continuing around the country.

In addition to calls for early elections, trade unions and civic organizations are demanding from Monday monthly collective bargaining sessions and weekly payment of wages until the introduction of a currency board.

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