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UPDATE January 2002

The Bulgarians have done something bizarre for a second time in the last seven months. The first in June was to elect their ex-king as a prime minister, with his National Movement for Simeon II only being eleven weeks old at the time - now the government party. In November they elected a former communist as president, Georgi Purvanov, in place of a popular predecessor, Peter Stoyanov, who had resolved a dangerous crisis on assuming office in 1997.
The new government party has been assembled so quickly that it is hardly surprising that it is making an uncertain start. Its popularity is already on the wane, even if it did introduce a number of economic measures to alleviate poverty, doubling child benefits, in the intervening period. The Bulgarians may come to think that Simeon II should have been made president or king again, rather than premier. He has the standing for a constitutional figurehead leader, rather than being an inspired mover and shaker, which his predecessor as premier, Ivan Kostov, was.
The government has been negotiating terms of credit from the IMF and modified its economic plans accordingly. The IMF have been insistent on a smaller budget deficit in 2002 than the government wanted. That means less capital investment and fewer jobs. The unemployment rate of 16.7% of the work force is the gravest problem left over from the preceding government's record, otherwise stimulatory of growth. But then the sale of state firms it initiated and pursued vigorously was always likely to involve job losses. Transition economics is a notoriously painful business.
The new government is proceeding with further privatisation and tax cuts, largely for the business sector and rich. The idea is of 'trickle down effects' eventually. But these are unlikely to materialise within the 800 days that Simeon has given as his period to double living standards. He may yet have a role in Bulgarian politics as a figurehead leader after being a one-term premier, as was his predecessor. Trying to conduct a popular government in a transition country with a low base point can be a thankless task.

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AUTOMOBILES

Peugeot-Citroen, Toyota mull major investments in Bulgaria

Deputy Prime Minister Nikolay Vassilev has clarified Bulgaria's strong interest in attracting the French automobile giants Peugeot-Citroen and Toyota as investors in Bulgaria, during his official visit to the French capital.
As reported by 'Pari' daily, the giant car manufacturing industry is currently searching for a location for the construction of a factory for production of a new automobile model in Central and Eastern Europe.
International Press Secretary of the central PSA Peugeot-Citroen in Paris, Mark Sioren, told the daily that the final decision for the location of the factory will be made next year. Sioren declared his appreciation of Bulgaria's activities to attract such a major investment project. The secretary concluded that it is positive that the new factory will be somewhere in Central or Eastern Europe.
To this effect, Vassilev intends to form a working group to attract the French automobile industry to invest in Bulgaria. Commenting on the chances for a successful outcome Vassilev admitted that there is little space for optimistic expectation, yet stressed that his team's efforts would prove useful and prepare the ground for the realisation of other similar projects. Concluding, he stated that he was to have telephone talks with the managers of Peugeot-Citroen on this investment.
Assessing his visit and related meetings in general, Vassilev expressed full confidence that the success of these meetings will be evident in the very near future.

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ENERGY

Bulgaria to join memorandum on establishing regional electricity market

The government decided on 29th November that Bulgaria will join the Memorandum of Understanding for the Establishment of a Competitive Regional Electricity Market in Southeastern Europe, signed in June 2000 in Athens. The chairman of the State Agency for Energy and Energy Resources was authorised to sign the memorandum, BTA web site has reported. 
Within the framework of the Study of the Development of a Competitive Balkan Electricity Market of the EC PHARE [EU Economic and Reconstruction Aid Programme for Eastern Europe] Multi-country Energy Programme, in September 1999 Albania, Bosnia and Herzegovina, Bulgaria, Greece, Macedonia and Romania signed a Declaration of Intent for setting up a regional market for electricity in Southeastern Europe. The declaration stressed the need for legislative preconditions and administrative and economic structures for the development of this market in addition to the development of inter-system connections and meeting the requirements of the united European electricity system. By signing the declaration, Bulgaria undertook to continue its participation in the development of this initiative. 
The initiative for setting up a regional electricity market is a step forward in the preparation of the countries in the region for participation in Europe's common electricity market. The idea is for the market to operate according to the rules of the union and later to join the common European market.

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TRANSPORT

EU awards Bulgaria 4.9m euros for Danube bridge

Bulgaria will receive 4.9m euro in gratuitous aid from the ISPA programme for an international consultant on engineering and management of the project for building a new bridge over the Danube at Vidin-Kalafat, BTA web site has reported. 
Deputy Prime Minister and Regional Development Minister, Kostadin Paskalev, and Dimitris Kourkoulas, Head of the Delegation of the European Commission, signed a financial memorandum on granting funds from the Instrument for Structural Policies for Pre-Accession (ISPA) for financing technical assistance for the project. 
The technical project is worth €5.8m. The funds are for preparing an overall conceptual project on the new bridge and of a tender dossier for engineering activities. Paskalev said that the funds are necessary for preparing the technical documents for the approaches to the bridge and preparation of the tender dossier for construction supervision. 
According to Dimitris Kourkoulas, the implementation of the project is a precondition for the region's integration into European economic space. 
Transport Minister, Plamen Petrov, who attended the signing, said that the international consultant will start work in July 2002. 
Construction is expected to be commissioned by the end of 2003 and the project is expected to be completed by 2006. The project will create about 1,000 jobs.
According to Kourkoulas, Bulgaria may avail itself of the possibility to receive some €70mfor the construction of the bridge.
Bulgaria presented four new infrastructure projects at the second session of the ISPA Monitoring and Control Committee, Deputy Prime Minister and Regional Development Minister Kostadin Paskalev told the press. 
The first 10 per cent of the funds necessary for the implementation of the projects are expected to be released at the beginning of next year after the signing of the respective memorandums. 
Bulgaria has applied for €153m for the upgrading and electrification of the Plovdiv-Svilengrad railway (Southern Bulgaria) and for funds for three sewage treatment plants. Apart from the ISPA funds, there will also be national co-financing, Paskalev added.

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