Bulgarian Telegraph Agency (BTA), 97-02-03

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

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

3 February, 1997

CONTENTS

[01] REFORMS IN BULGARIA ARE YET TO COME, PRESIDENT STOYANOV SAYS

[02] PRESIDENT STOYANOV: DIALOGUE NEEDED BETWEEN BULGARIA AND MACEDONIA

[03] BELGRADE READY TO TAKE PART IN BALKAN DEFENCE MINISTERS MEETING IN SOFIA

[04] THIRD DAY OF GENERAL STRIKE

[05] MTV OPENS SOFIA OFFICE

[06] EXPERTS PROJECT 2 PERCENT GROWTH UNDER CURRENCY BOARD

[07] LEV PLUNGES ON, FOREX MARKET COLLAPSING

[08] FURTHER AGGRAVATION OF ECONOMIC CRISIS

[09] SIMEON II ON HIS ROLE AND THE BULGARIAN CRISIS

[01] REFORMS IN BULGARIA ARE YET TO COME, PRESIDENT STOYANOV SAYS

Stoyanov said he raised the question about substantial financial assistance before European Commission President Jacques Santer and Hans van den Broek, European Commissioner in charge of external relations, which will support the country's balance of payments before this country has started the negotiations with the international financial institutions. However, political stability should be achieved first and the major political forces should clearly state their desire for reforms, he added.

There are a number of objective factors which caused the catastrophe Bulgaria is in, President Stoyanov said at his meetings in Brussels. Bulgaria strictly observed the embargo against Yougoslavia and sustained losses equal to almost half of the external debt, he stated. This is why he asked Europe to show understanding. Bulgaria needs not so much humanitarian and social aid but stimulation for the inflow of investments, the President said. In his view Bulgaria have grounds to be among the first states to be repaid the money Iraq owes them. Iraqi debt to Bulgaria is of the worth of 2,000 million US dollars.

[02] PRESIDENT STOYANOV: DIALOGUE NEEDED BETWEEN BULGARIA AND MACEDONIA

In a statement for this daily given by the Bulgarian President during his visit to Brussels, Peter Stoyanov said he is a strong advocate of good Bulgarian-Macedonian relations and of solving all problems, including the language problem. Asked of the concrete steps and initiatives he plans to undertake in the realization of his priorities, Peter Stoyanov said: "I will work specifically for dialogue with Macedonia." What Sofia and Skopje need are meetings and talks which, if they fail, should be followed by more meetings and talks. This is the only way to solve problems," the new Bulgarian head of state believes. "Bulgaria and Macedonia have identical goals and if they help each other this would be to the benefit of both countries. Everything can be achieved together and this also refers to the other Balkan states," Peter Stoyanov said.

In a special correspondence from Brussels, the "Dnevnik" daily quotes Peter Stoyanov's words at a news conference that Balkan problems can be solved only by applying European standards and within the framework of European integration.

The "Dnevnik" correspondent in the Belgian capital highlights Peter Stoyanov's statement that there are many untapped opportunities for cooperation between Bulgaria and Macedonia. The Macedonian media also underscored the fact that Peter Stoyanov's first visit abroad as president is to Brussels, the capital of the EU and NATO. There Stoyanov received clear signals that Bulgaria would not be among the first countries to join the EU and NATO, according to "Nova Makedonija". And this equalizes Skopje's chances to join the EU and NATO with those of Sofia.

[03] BELGRADE READY TO TAKE PART IN BALKAN DEFENCE MINISTERS MEETING IN SOFIA

Bulatovic praised Bulgaria's position of non-interference in the Yugoslav crisis and said that this was an important confidence-building element between the two neighbours and the Balkans in general. He expressed his country's readiness to sign a document on confidence- building measures with Bulgaria.

[04] THIRD DAY OF GENERAL STRIKE

The international road between Sofia and Koulata (on the Bulgarian- Greek border) was blocked at several points: for an hour at Pernik, Western Bulgaria; at Doupnitsa, further to the south, the road and the railway have been blocked for three days now. There was also a one-hour blockade of the E-80 international road at Svilengrad, Southeastern Bulgaria (on the Bulgarian-Turkish border) and another one at the highway from Sofia to Varna, Northeastern Bulgaria.

Strikers from the largest refinery, Neftochim in Bourgas, Southeastern Bulgaria, blocked for one hour all oil supplies, making an exception only for ambulances and vehicles used by schools, the army and the police. There will be one-hour stoppages of fuel supplies every day. The SS Cyril and Methodius National Library in Sofia is on an indefinite strike. Readers are not serviced for the first time in its 110-year-long history.

The military plant in Sopot, Central Bulgaria, went on strike Friday morning, says a fax from the Confederation of Independent Trade Unions (CITUB) in Bulgaria. It also says that an indefinite strike of the public transport in Plovdiv, South Central Bulgaria, is going on. An indefinite strike has been staged at the Metal Tools Plant in Sliven, Southern Bulgaria, too. There was a one-hour stoppage of all stevedores and employees at Port Bourgas. Medical workers in some parts of the country have been staging one-hour stoppages, heeding emergencies only, the CITUB press centre said.

[05] MTV OPENS SOFIA OFFICE

The first cable operators in Bulgaria emerged in 1989-90 and in 1993 the Committee of Posts and Telecommunications (CPT) adopted rules for licensing and the operation of these companies. The CPT has issued 94 licences but there are still a lot of companies that are operating illegally.

[06] EXPERTS PROJECT 2 PERCENT GROWTH UNDER CURRENCY BOARD

The experts point out the relation between the level of foreign exchange currency rates and confidence in the government. They predict that after a currency board is instituted, confidence in the executive will strengthen. "Since 1989, the Bulgarian governments get off with a high credit of confidence which then rapidly dwindles away," Mr Ganchev observed.

"The expected appreciation of the national currency under a currency board will have a negative effect on Bulgarian exports and the consequences will be felt already in the first five or six months," Mr Ganchev said. The AECD recommends to improve customs duty collection and create a system for crediting exports in order to stimulate foreign trade. "Bulgarian producers have been facing strong and unfair competition provided by importers of inferior quality goods, part of them smuggled in the country," Mr Ganchev noted.

"The introduction of a currency board in Bulgaria is impossible without external financing," the AECD President said. He said that attracted by the interest margin, foreign investors were showing interest in making purely financial investments when a currency board is introduced. If all difficulties the institution of a currency board involves are resolved, economic and political stabilization will be achieved within six months after the board starts functioning, the AECD experts predict.

[07] LEV PLUNGES ON, FOREX MARKET COLLAPSING

The national currency is depreciating steeply because the central National Bank of Bulgaria (BNB) is unable to intervene on the market and because politicians are making statements that the country has already entered a hyperinflation spiral and the government can do nothing to contain it, a dealer for the Bulgarian Post Bank commented for BTA. He sees the enormous amount of leva which are withdrawn daily from the State Savings Bank and dumped on the market as yet another factor of the fiercely bullish dollar.

In a separate development, the outgoing Government approved a bill on a 100 per cent increase of wages in the state-financed sector. "With the lack of any measures whatsoever to contain these destructive processes, the Government is unable to make any analysis of the effect of this increase," the outgoing Labour and Social Affairs Minister Mincho Koralski said.

"The extra lev supply in circulation will inevitably spur on inflation and hence push up the exchange rate," BNB Governor Lyubomir Filipov said. He agrees, however, that income adjustment for inflation is socially justifiable, considering the sharp deterioration of the standards of living in recent days. "The policy of deliberate lev depreciation is myopic," said former BNB vice governor Mileti Mladenov, adding that the fall of the lev so far is sufficient.

[08] FURTHER AGGRAVATION OF ECONOMIC CRISIS

We cannot make any analyses given the anarchy in the country and the destructive processes in the economy, Mincho Koralski, Minister of Social Affairs in the outgoing Cabinet, said in a private radio broadcast Thursday. 36,000 million leva are needed for the 100-percent increase of the salaries in the state-owned enterprises and the pensions, planned by the Government, said Trade Minister Atanas Paparizov in the same broadcast. Koralski and Paparizov confessed that Bulgaria is not prepared for the hyperinflation and its legislation not adapted to such conditions.

The planned increase of the salaries is a bomb which will blow up the economy, said Krustyu Petkov, President of the Confederation of Independent Trade Unions in Bulgaria, one of the two largest trade unions in this country. According to Petkov, dumping of such a large amount of money on the market would an irresponsible decision.

Most shops sell only bread and milk, because the keepers do not know what prices to name. Commodity exchanges are closed or payments there are made in hard currency although this is forbidden by the law. People queue in front of the Sofia stores for cheese and yellow cheese. People from all over the country withdraw their savings and buy goods or exchange their savings into hard currency.

"People Stock up, as if in the Eve of a War," reads a headline in the latest issue of "Standart News". Some shopkeepers hide away the goods, awaiting the successive price hike. "We buy only prime necessities," said a pensioner with two university diplomas in an interview for the same paper " Friday. All of the respondents in an opinion poll conducted by another newspaper, "Novinar", say they spend all their money on food.

Ninety-five percent of the small and medium-sized companies have stopped operating, the Union for Private Economic Enterprise stated Thursday. The papers run interviews with small businessmen who say they suffer heavy losses. A shopkeeper in Yambol (Southeastern Bulgaria) expressed his protest by selling out all his stock dirt-cheap and was beaten by other traders.

"Continent" wrote Friday hungry people started stealing bread and clothes in Bulgaria's second largest city of Plovdiv (Southern Bulgaria). Recently the press reported about hungry gangs of Gypsies which have been breaking into and robbing stores in several cities on the Danube. "24 Chassa" wrote Friday that citizens of Varna (on the Black Sea) in desperate situation make their living by hunting swans and other waterfowl.

On Thursday the Government returned for further consideration new methods for setting electricity and heating prices. The population would not be able to stand higher prices, Minister Koralski told journalists. The electricity and heating charges many families had to pay in the last month equalled the average wage in the state-financed enterprises in December.

[09] SIMEON II ON HIS ROLE AND THE BULGARIAN CRISIS

He commeted that, acting in conformity with the Constitution, President Stoyanov has asked Socialist N.Dobrev to form a government, but that this government should resign and call immediate elections. "I am neither a political leader nor a messiah. I have been playing an indirect political role for years," the Simeon II said, also quoted by the BBC. "Since 1989 I have been part of everyday Bulgarian reality. My direct intervention, however, must be preceded by something. If I had a mandate, I would not hesitate to enter the game directly. If, however, circumstances lead to changes in the Constitution, then this would be my duty. For the time being, however, this is just a hypothesis," Simeon II says.

He observed he would not intervene rightaway if early elections are called. "Some people are saying that the monarchy belongs to the past, but the present situation has no precedent in our history," the King in exile asserts. "I might ask for a vote of confidence and tell the Bulgarians, 'I am coming for four years as King. Aren't you afraid that I may stay for good?'"

According to Simeon II, a constitutional monarchy is even more democratic than a presidential republic. "I could be a constitutional king, as has been the case in the past. But if you think this is not democratic and that the president can be elected while the king cannot, then give me a mandate for four years or else forget about me," Simeon II suggests. Would such a mandate prompt his direct interference? "What matters is for the country to make progress," he answers. There are disappointed people both among the Reds and the Blue (those are the colors of the Left and the opposition respectively), because neither has been able to strengthen the country," the King argues. "There is, however, a third party - the party of the people in the street who trust in Simeon because they do not see me as a politician who wants to manipulate them."

"I oppose the idea of setting up a royalist party. I am not a political leader but King of the Bulgarians," Simeon II says. "For the time being, ethics dictates that I stay in Madrid and help my country without being there. This is the case today, but it may not be so the day after tomorrow or in a week's time. The right time, however, will come by all means."

On Thursday, Simeon II also made a statement in Gijon, Northwestern Spain, where he visited a trade fair. "In a constitutional monarchy the king might act as a mediator," he said, quoted by the German news agency DPA. "A monarch could help pour oil on troubled waters," he noted, obviously referring to the crisis in Bulgaria. He did not rule out the possibility of returning to this country if the people ask him to do so. "The fact is, and it is my right as a Bulgarian citizen, that I may return to my country whenever I wish to," the exiled Bulgarian monarch said.

"Simeon II, who has been quite reserved in his political statements in the past, is ever more often taking a stand on domestic political issues in his country," DPA observes, recalling that the former King has declared himself in favour of early elections and against the general strike which is being staged in Bulgaria now.

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