Bulgarian Telegraph Agency (BTA), 97-02-28

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

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

28 February, 1997

CONTENTS

[01] PRESIDENT STOYANOV ARRANGES IMPORT OF 100,000 T OF POLISH WHEAT

[02] SOFIYANSKI LEAVES FOR MACEDONIA

[03] COUNCIL OF MINISTERS' DECISIONS

[04] GOVERNMENT ASKS PARIS CLUB FOR DEBT RESCHEDULING

[05] GERMAN FOREIGN MINISTER TO VISIT BULGARIA SOON

[06] PRICES OF ENERGY SOURCES, PHONES RAISED

[07] SHELL, NESTLE HERE TO STAY

[08] SIX BULGARIAN COMPANIES AMONG CENTRAL EUROPE'S TOP 100 IN 1995

[09] HOUSEHOLDS POORER, STATISTICS SHOWS

[10] PRIORITIES OF POSTS AND TELECOMS COMMITTEE

[11] FUEL PRICES GO UP

[01] PRESIDENT STOYANOV ARRANGES IMPORT OF 100,000 T OF POLISH WHEAT

A free trade agreement between Bulgaria and Poland was also discussed. According to Stoyanov, this agreement is a stepping stone for Bulgaria which is seeking to join the Central European Free Trade Agreement and, ultimately, the European Union. "We decided to discuss a large number of issues to settle the problem of Bulgaria's debt to Poland; we also agreed on exchange of experts in macroeconomics and privatization," Peter Stoyanov said, describing his meeting with Cimoszewicz as exceptionally optimistic and hopeful.

At his meeting Wednesday with the committees on foreign policy of the Polish Sejm and Senate Peter Stoyanov said that Bulgaria's clearly stated view to apply for full NATO membership makes this country a part of the European processes and civilization. Bulgaria's application to join NATO should not surprise anyone, the President said and emphasized that he does not hesitate to comment Russia's stand on the matter. Bulgaria's decision on NATO is a sovereign one and it cannot be an obstacle to this country's relations with Russia, Stoyanov said. He voiced a stand that Bulgaria's relations with Russia should be based on the principles of mutual consideration of the two countries' sovereignty and of mutual benefit.

Thursday morning President Stoyanov met with former Polish president Lech Walesa. The two talked about the transition to a market economy in Poland which started during Walesa's presidency. Later Peter Stoyanov and the accompanying officials met with Josef Zych, Marshal of the Sejm, and Adam Struzik, Marshal of the Senate.

Stoyanov and his wife gave a luncheon at the Bulgarian Embassy in Warsaw in honor of Polish President Alexander Kwaszniewski and his wife. After the formal ceremony at the presidential palace at the end of the visit, Stoyanov met with film directors Andrzej Wajda and Krzysztof Zanussi.

[02] SOFIYANSKI LEAVES FOR MACEDONIA

[03] COUNCIL OF MINISTERS' DECISIONS

By March 10, Agriculture Minister Roumen Hristov is to draw up a proposal to the European Commission for an emergency grain supply. Returning from Brussels on Wednesday, Foreign Minister Stoyan Stalev said the EU may provide 10-15,000 tonnes of wheat for which Bulgaria must submit a request.

The cabinet decided to launch studies for granting a concession for the construction and operation of toll sections of the Trakiya highway, which links Sofia with the south, and the Cherno More highway, which runs in Eastern Bulgaria. The cabinet believes a concession would provide funds for road maintenance. The Transport Ministry is to draw up a plan to this end.

In 1996 the road maintenance requirement was an estimated 10,525 million leva, but a mere 3,317 million leva was allocated from the budget.

Bulgarians applying for foreign travel passports will have to submit certificates showing they have no previous convictions for serious crimes.

Roumen Hristov was appointed chairman of the Committee for Peaceful Uses of Atomic Energy. Prime Minister Sofiyanski and Energy Minister Georgi Stoilov differed on his appointment. Stoilov said he objected to it on the grounds that at two points in his career he compromised his reputation as a specialist.

Hristov was the Committee's first deputy chairman from 1992 until now.

The cabinet set higher purchase prices for 1997 tobacco. The price of Djebel tobacco is highest at 4,647 leva/kg.

The cabinet approved a draft memorandum between Bulgaria and Solvay of Belgium to finalize the sell-off of the Sodi Devnya chemical plant. In mid- December 1996 Solvay signed an agreement to buy a 60 per cent stake in Sodi for US$ 160 million.

[04] GOVERNMENT ASKS PARIS CLUB FOR DEBT RESCHEDULING

In April 1994 Bulgaria signed an agreement with the Paris Club for an eleven-year rescheduling of its debt which totaled US$ 1,300 million, according to official figures of 1994. It was agreed Bulgaria would pay only interest in the first seven years. Bulgaria's external debt stood at US$ 9,860.9 million in early 1996, according to central bank figures. In end-1991 it was US$ 12,301.1 million.

[05] GERMAN FOREIGN MINISTER TO VISIT BULGARIA SOON

The European Union and its member-countries should take part in the overcoming of this crisis which jeopardizes the survival of a neighbouring European country, says the declaration. Bulgaria is an EU associated member with the prospect of becoming a full member and the realization of this prospect is and will be a political goal of the German Government, is further said in the declaration.

The declaration notes the decision of the EU Council of Foreign Ministers to extend urgent aid of the worth of 20 million ECU to Bulgaria which should be given to lowest income groups already in early March. The German side lobbied actively for taking this decision.

The important thing now is that Bulgaria's caretaker cabinet starts radical economic reforms, Klaus Kinkel says.

The German Foreign Minister states he will visit Bulgaria soon adding the most important thing at the moment is to help the Bulgarians in the heavy crisis. Even after getting out of the crisis Bulgaria can rely on Germany as its reliable partner, he says.

[06] PRICES OF ENERGY SOURCES, PHONES RAISED

In October 1996 the prices of energy sources were frozen by the then Socialist government. Heating prices are raised for the first time since October 1996. The new price is 7,639 leva/gigacalorie, up from 3,945 leva/gigacalorie, said Energy Minister Georgi Stoilov before journalists.

"Payments on the new bills are due in April and we hope to find ways to compensate the most socially-disadvantaged by then," Prime Minister Stefan Sofiyanski said at a news conference. The 20 million ECU, extended by the EU for social assistance, will be distributed among some 150,000 Bulgarian families as of March 23, said Sofiyanski.

The increase of energy sources is a real necessity and the decision to this effect was not taken under pressure by the international institutions, the Prime Minister stated. Now electricity is 1.6-2 cents at the current exchange rate, Minister Stoilov said Thursday. In his view the Government will gradually increase the price of the energy sources.

The charge on telephone calls will be 2 leva for one impulse in case the bill does not exceed 100 impulses, under a Cabinet decision. Up to now subscribers paid 0.50 leva per one impulse for the first 200 impulses. So far the companies paid 3.60 leva per one impulse. From now on 25 leva will be charged on all impulses above 100 both for private subscribers and companies.

"This is a minimum increase of telephone charges and it cannot at all cover the huge losses sustained by the telecommunications company due to the low charges," said Antonii Slavinski, Chairman of the Committee of Posts and Telecommunications (CPT).

[07] SHELL, NESTLE HERE TO STAY

Shell owns 23 filling stations in Bulgaria. The company has invested $40 million to set up shop in this country. Shell is here for a long time and will continue to invest in Bulgaria; it will keep expanding in 1997 in the area of aviation fuel and propane-butane supply and distribution, Bryant told "24 Chassa". The unprecedented petrol crisis hit Shell as well, because in addition to not selling, the company had to take care of employees and partners, Bryant said. Shell's supplier in Bulgaria is the Neftochim refinery. Bryant believes it is more important to run the refinery as a modern and professional enterprise in a market economy than simply privatize it.

Shell has been adding to its fuels free of charge chemical purifiers made at leading scientific laboratories around the world and based on latest technologies. The company spends a total of some 50,000 US dollars a year on additives to the fuels it sells in Bulgaria, Bryant says. Mr. Graham Bryant also says that Bulgaria shows a negative tendency of changing its legislation too often which drives back serious foreign companies.

Major entrepreneurs may decide to invest in Bulgaria only if the situation here is stable, Executive Director of Nestle-Sofia Inc. Dimitris Koronakis told "Pari". "We have no intention of leaving the country and by the end of 1996 our investment here added up to 10,400 million US dollars or 49 per cent more than specified in our agreement with the Privatization Agency," Mr. Koronakis says in his interview for "Pari". The company's policy envisages that Nestle's products be made more affordable for the Bulgarian customer. "Although most our suppliers introduced foreign currency rates, our prices are quoted in Bulgarian levs," Mr. Koronakis says.

A range of lower weight products has been planned to be put on the marker. 41 out of the total of 66 products are new or improved, which is 74 per cent of the total range of products.

Nestle will continue its marketing initiatives it launched last year when it sponsored the Bulgarian Ski Federation, the concerts of Tonika pop group and the Bulgaria Top 20 Countdown. The company has purchased 3 pictures of artist Michev and will print images of them on certain types of chocolates.

Nestle also takes care about the qualification of its personnel and has devoted 4,380 work days for qualification in Poland, the Czech Republic, Great Britain, France, Switzerland, Italy, Romania, Greece and Russia.

[08] SIX BULGARIAN COMPANIES AMONG CENTRAL EUROPE'S TOP 100 IN 1995

The prestigious top list includes also the Bulgarian National Electricity Company (NEC), which is 46th, showing 659 million US dollars of proceeds in 1995 and a growth of 55.8 per cent. The company advanced four places from 1994. The Kremikovtsi iron and steel works, which was not on the chart in 1994, ranked 52nd in 1995. The plant showed sales proceeds growth of 212.6 per cent. Other Bulgarian companies ranking among the top 100 are Bulgargas, 62nd in 1995 up from 69th in 1994, Petrol - 72nd in 1995, down from 48th and Navigation Maritime Bulgare, ranking 96th in 1995.

[09] HOUSEHOLDS POORER, STATISTICS SHOWS

Over two-thirds of the respondents describe their financial situation as seriously aggravated from 12 months ago. Only 6.9 per cent of the people have sustained the levels of their financial conditions and 2.8 per cent have improved it. 47.9 per cent of the respondents say they can hardly make ends meet. Every fourth Bulgarian citizen has run into debts. 4.3 per cent of the respondents say they set aside small savings, against 12.7 per cent in January 1996. Those who set aside large savings are less than 0.5 per cent.

The number of the extreme pessimists about their future financial state has gone up 3.3 times from last year. Only 3.4 per cent of the respondents are optimistic about their finances in the next 12 months. Since last year the overall financial situation in the country has dramatically worsened according to 83.7 per cent of those polled. Only 6.3 per cent believe there will be some improvement during the next 12 months.

[10] PRIORITIES OF POSTS AND TELECOMS COMMITTEE

The privatization of the telecommunications company is not an end in itself; it is predetermined by two factors: first, the tendency of liberalization of the regulations of all European operators and the condition of the state as a whole and second, the need of revenues in the national budget, Slavinski said. He declined to answer a question on what percentage of BTC will be put up for privatization. In Slavinski's view the procedure of the BTC privatization will last at least seven or eight months.

According to the new BTC President Marin Dragostinov the important thing is not what part of the company's capital will be sold but to whom it will be sold. According to Dragostinov, the policy of the former management of the telecommunications company led it to financial collapse.

[11] FUEL PRICES GO UP

From Friday the most widely used petrol, A-93, will cost 1,000 leva/l, up from 910 leva/l. The price of A-98 was set at 1,250 leva/l, up from 1,130 leva/l; A-86 at 940 leva/l, up from 850 leva/l; and unleaded A-95 at 1,170 leva/l, up from 1,070 leva/l. Diesel oil went up 20 leva to 740 leva/l. Fuel prices have trebled already on February 17, when the price of A93 petrol was set at 910 leva/l, up from 328. The cabinet said the mark- up was intended to partly offset losses sustained by the largest oil refinery, Neftochim, from the wide margin between fuel prices and the cost of oil in dollars.

On Thursday the cabinet also raised prices of electricity, heating, telephone and postal services. These decisions are a step towards real economic reform in Bulgaria, for which price liberalization is a precondition, said Sofiyanski.

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