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Update No: 057

The Bulgars have had a chequered career of late. In June they voted in a new government, under the bizarre leadership of their old king, Simeon Saxe-Coburg- Gotha, who had last ruled them as an infant in 1943.-46.
The previous government had done an excellent job, but was naturally very unpopular, carrying out necessary reforms. There is enormous disquiet over 20% unemployment, as the old jobs in outdated industry are destroyed, a very painful business.
The new government has taken its time to establish its credentials with the international community, but is now being given BB- rating by international agencies.
The economy is continuing to grow, GDP rising by 4% this year, after 4.4% in 2001.The current account deficit is continuing to grow from 5.9% of GDP in 2001 to 6.5% in 2002, but this is typical of a transition economy.
Bulgaria has become a key conduit for drugs and money-laundering, especially from the former Soviet world. Its local mafia are in cahoots with their Russian counterparts and the needs of Europe's security would certainly be enhanced if Bulgaria was brought into its structures.
Bulgaria's early entry into NATO now looks on the cards, not only to facilitate the anti-terrorist cause, but to consolidate peace in Macedonia, where in the aftermath of the attack on the US the impetus for a new settlement between rebel Albanians and the majority was redoubled in strength. Bulgaria is a neighbour and indeed almost the same country, speaking the same language and having the same ethnicity. It could provide secure bases for NATO operations in the whole Balkan region.
Simeon Saxe-Coburg Gotha has promised results by August 2003, the 60th anniversary of his own accession in 1943, which indicates that he has not quite abandoned monarchical ambitions. It is to be hoped that he does not attempt to bribe his way to a throne, which could jeopardise an anti-inflation policy that has brought inflation down to single figures on an annual basis.
The new regime has the alibi of the sluggish world economy to fall back upon if things are slow to improve. Simeon has an excellent young reform team to organise a recovery and probably a more extended honeymoon period than he originally thought to bring improvements to his people's lives.

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FOREIGN LOANS

World Bank credit for balance of payments

Following a relevant official government request, the World Bank (WB) will increase its support for Bulgaria's balance of payments. Finance Minister, Milen Velchev, and WB Director for Bulgaria, Andrew Vorkink, discussed the new three-year strategy of the bank for Bulgaria, Rubikon ITK Pari reported recently. 
According to the strategy, the WB will extend a total of US$750m to Bulgaria over the next three years. Of the total amount US$500m will be extended in support of the balance of payments whilst the remaining US$250m will be provided in the form of investment credits. The documents initially envisaged US$450m for the balance of payments and US$300m for investment loans. 
The WB board of directors is expected to approve the new programme for Bulgaria early in February.

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NUCLEAR ENERGY

Nuclear plant unit reconnected to national power grid

Generator unit four, 440 MW, of the Kozloduy nuclear power plant reached 55 per cent of its capacity on 23rd December after it was switched to the national power grid the day before, the N-plant's press centre said, the BTA web site has reported. 
The unit was closed down for planned annual repair and refuelling on 20th August 2001. On 21st December, the Inspectorate for Peaceful Uses of Atomic Energy gave its permission to put the unit into operation. 
A programme for modernisation was implemented during the repair, including the installation of a spray-tray jet condenser - a chief element of the damage localising system, the press centre said. The project is an original one and applied for the second time in the world after its implementation at the N-plant of Novovoronezh. The same type of condenser will be installed on unit three during its planned repair in 2002. 
The condenser system improves the technological safety level of the generating units, bringing them in line with the international standards.

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SHIPPING

Cargo traffic on Danube River drops

Cargo traffic has been stagnant at Bulgaria's Danube ports for months now, says the executive director of the Bulgarian River Shipping Corporation, Dimiter Stanchev, BTA web site has reported.
The corporation's vessels transport only Serbian iron from Smederevo and grain from Hungary. 
The collapse of the Bulgarian economy in recent months is evident from the lack of goods incoming to and outgoing from Bulgaria on the Danube waterway, said Robert Radoslavov, director of the Rubiships Ship and Freight Forwarding Agency. 
Until five years ago, up to 10 ships bound for Western Europe used to be loaded monthly at the Port of Lom, but barely three to four are loaded now, Rubiships said. Even this business stopped after the temporary introduction of value added tax on transhipment through Bulgaria three years ago. Foreign customers then moved the usual 300,000 t of transit cargo to Constanta, Romania, and did not return even when the tax was revoked. 
Now Bulgarian Danube ships are transporting some 2m tonnes of Hungarian grain to Constanta. By March, however, this deal will be over, and 3,016 Ukrainian, Bulgarian and Romanian ships capable of carrying 2.9m tonnes will be idle, the Ruse ship-owners fear. 
Rubiships is trying to expand its business by better services for customers and higher quality of ship crews, Radoslavov said. 
The company also uses three ships licensed to sail down the Rhine and Main canals and all inland waterways of the European Union. Last year Rubiships earned an ISO 9001 quality certificate.

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TELECOMMUNICATIONS

Bulgarian MobilTel lures Austrian-German interest

A consortium of Austrian and German banks wishes to buy one of Bulgaria's two GSM-operators - MobilTel, the transport and communications ministry recently announced, following a relevant meeting between Transport and Communications Minister, Plamen Petrov, with Austrian Ambassador to Bulgaria, Georg Potyka, and businessmen, Dr Josef Taus and Martin Schlaff.
BTA reported that Taus and Schlaff are members of a consortium of Austrian and German banks and investment companies, including BAWAG, Post Sparkasse and Bayrische Landesbank who expressed a wish to acquire Bulgaria GSM-standard cellular phone operator MobilTel. Schlaff has been director general of the Austrian Robert Placzek Holding since 1990 and until 1991 Dr Josef Taus was MP of the Austrian People's Party, the press release said. Robert Placzek Holding Director General, Martin Schlaff also met Finance Minister, Milen Velchev and presented the Austrian Holding as a potential buyer of MobilTel. Until recently, Potyka and the two businessmen had not asked for meetings with the chairman or any member of the State Telecommunications Committee (STC).

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