Books on Bulgaria
% of GDP
Update No: 090 - (27/10/04)
Simeon government to see out its term
Bulgaria's ruling coalition stands a high chance of surviving until the end of
its term in office, according to the latest country forecast, released by The
Economist Intelligence Unit.
The coalition of the Simeon II National Movement (SNM) and the mainly ethnic
Turkish Movement for Rights and Freedoms (MRF), led by Premier Simeon Borissov
Saxe-Coburg-Gotha, looks likely to survive until the end of its term in office
in mid-2005, the EIU writes in an article on Bulgaria entitled "A little
way to go yet".
However, the experts project that the next parliamentary election will result in
the return to power of the Bulgarian Socialist Party (BSP), probably in
coalition with one or two centrist parties.
The Economist Intelligence Unit forecasts a slowdown in real GDP growth to 4.2%
in 2005 and 2006 (from an estimated 4.7% in 2004), as domestic demand growth
eases and exports are hit by the strong lev and by a fall in import demand in
Inflation should fall back after its recent rise, but the main concern is the
current-account deficit, which was running at nearly 9% of GDP in early 2004.
Although the trade deficit will rise further, the current-account deficit is
projected to fall to 7.3% of GDP in 2004-05 and to 7% of GDP in 2006.
The forecast points out that the latest European Commission report on Bulgaria's
readiness for EU accession was generally positive but repeated earlier criticism
of Bulgaria's justice system and of the level of corruption.
Bulgaria's Ruling Party Seeks to Regain Majority
Bulgaria's Parliament terminated the rights of the independent MP Nikola Nikolov
in what is seen as the first step for the ruling party to regain its majority.
Nikolov, who tendered his resignation on October 14th, will be replaced by
Yambol district governor Mincho Spasov, increasing the ruling coalition
lawmakers in the 240-seat Parliament from 117 to 118.
Nikola Nikolov is former head of the splinter group, Bulgaria's National Ideal
for Unity (NIE), which left the ruling party Simeon II National Movement last
year to form the ten-member new formation in a protest against the governing
party politics. NIE ceased to exist in January 2004 after the departure of a
member, as parliamentary rules require that a group consists of at least ten
In March the Novoto Vreme (New Time) political club, which was established by
maverick lawmakers from Simeon II National Movement, defected from the ruling
coalition, stripping it of its simple majority.
Local reports say that the ruling Simeon II National Movement will do its best
to swell its parliamentary group by four members prior to the parliamentary
debate of budget 2005.
Former president Stoyanov aims to foil Socialists
Not everyone agrees that a return of the Socialists is inevitable. The fractured
centre-right parties will look for ways to join efforts at next years general
elections to prevent the Socialist, formerly Communist, Party from returning to
power, Bulgaria's former President Peter Stoyanov said on October 20th. Stoyanov
told the bTV channel the main opposition Union of Democratic Forces (UDF) and
parties that have spun away from it in the past three years would meet on Nov.
10 "to outline possibilities for a future centre-right government."
The Socialists, currently the front-runners in public opinion polls, have the
support of about one-fourth of the voters, while the UDF accounts for some eight
percent. Smaller parties like the Agrarians, the Democrats and the Free
Democrats of Sofia Mayor Stefan Sofiyanski aren't sure to clear the four-percent
"If the right parties unite that will be a positive sign for politics in
Bulgaria, " Stoyanov said.
He said the UDF and its possible smaller allies must be ready after the
elections to form an alliance with the currently governing National Movement
Simeon II and its coalition ally - an ethnic Turkish party.
"The right-wing parties won't collect enough votes to govern on their
own," Stoyanov said. "This must be clear and understood by
He said a party led by former Prime Minister Ivan Kostov, which has seceded from
the UDF and is sharply critical of it, won't join a possible centre-right bloc.
Bulgaria, Russia sign contracts on nuclear power, oil
Since taking power, the government of Simeon Borissov Saxe-Coburs-Gotha has
made efforts to rebuild Bulgarian-Russian relations. Visiting Russian Prime
Minister Mikhail Fradkov signed an agreement on nuclear energy and oil with his
Bulgarian counterpart on October 19th.
According to the Bulgarian news agency, the agreement said that Russia will
"actively" participate in the bid for the construction of Bulgaria's
second nuclear power plant, Belene, the largest one in the Balkan area, and help
Bulgaria to maintain its first nuclear plant, Kozlodui.
The agreement said that Russia will invest in building an oil pipeline from
Bulgaria's harbour, Burgas, to Greece's harbour, Alexandropolis, and expand the
Russia-Bulgaria natural gas pipeline to increase gas export to Bulgaria and to
facilitate the sale of Russian gas to Greece, Macedonia and Serbia. It also said
that Russian companies will take part in the privatisation of the Bulgarian
It is the largest energy cooperation agreement between Bulgaria and another
country since 1990.
Both ministers also signed agreements on transportation, communication,
environmental protection, tourism and justice.
Russia is Bulgaria's traditional cooperation partner. Before its collapse, the
Soviet Union provided Bulgaria with 98 percent of oil, 100 percent of natural
gas and 80 percent of electricity. In the 1990s, bilateral relations cooled
down, and two-way trade slipped to only 160 million US dollars in 2001.
Bumper grain crop set to push exports higher
Bulgaria expects to harvest larger wheat crops than initially planned this year,
with output likely to reach 3.4m metric tons. According to agriculture experts,
the prevailing wheat has lower gluten content this year due to the humid
weather. Due to the moist and warm weather this year, the sunflower seed
production in Bulgaria is expected to outreach initial projections standing at
700,000 metric tons from 490,000 hectares. However, estimations show the crop
will be down from last year's 720,000 mt harvest from 610,000 hectares. Over
400,000 tons of grain have been exported from Bulgaria, Minister of Agriculture
and Forestry Mehmed Dikme said in Karnobat town. He said further that the
country has never seen such an export within two months after the completion of
harvesting. The Cabinet is making every effort to regulate the grain market, the
Farm Minister said, Standart daily reported.
Grain is to be stored in specialised warehouses against 1.20 levs per kg. He
added that some 3m decares are ready for autumn sowing.
At present, a duty-free export quota of 88,000tn of maize to the EU is being
negotiated. The quantity is going to rise by 8,000tn per year till Bulgaria's EU
accession. As for the grain, the yearly increase is expected to be 50,000tn. In
the meanwhile, Bulgarian farmers will soon be allowed to export unlimited
quantities of agriculture products. The EU scrapped the import duties this
summer and on September 9th, the Cabinet endorsed the agreements on
liberalisation of trade. The decision becomes effective after being promulgated
in the State Gazette.
SAS Airlines interested in air privatisation
Scandinavian Airlines SAS, have shown interest in the privatisation of national
air carrier Bulgaria Air, New Europe reported recently.
The news was released by Transport and Communications Minister, Nikolay Vassilev,
who met the company management in Stockholm, (Sweden) on September 8th.
SAS expects the Bulgarian Parliament to approve the strategy for the
privatisation of Bulgaria Air and to acquaint itself with the terms and
conditions it features, Vassilev said. Vassilev also met with the management of
Ericsson, and acquainted them with the policy of the Bulgarian Government in the
field of telecommunications, as well as the award of a third-generation GSM
licence. Ericsson said they intended to boost their presence in Bulgaria by
investing in the production of software for telecommunication services.
Also, Vassilev and Swedish Minister for Communications and Regional Policy,
Ulrica Messing, discussed pending privatisation deals of Navigation Maritime
Bulgare, Bulgarian River Shipping Corporation and Bulgaria Air, as well the
award of concessions of airports and ports.
Vassilev also said that he had offered his colleagues from Finland, Norway and
Sweden to increase automobile permits and invited them to visit Bulgaria.
Bulgaria, Armenia to develop cooperation in transport, communications
Regular flights between Bulgaria and Armenia may be launched in April 2005. This
was agreed between Deputy Premier and Transport and Communications Minister,
Nikolay Vassilev, and Armenian Communication and Transport Minister, Andranik
Manukyan, the Transport Ministry said, BTA web site reported on October 5th.
The two transport ministers discussed the opening of a direct Sofia-Yerevan
airline route during a meeting that was held within the framework of the
official visit of President Georgi Purvanov to Armenia. The Bulgarian party is
ready to start with the launching of a Varna-Port Kavkaz ferryboat line; it
emerged from the talks of the two ministers. The final decision on the part of
Armenia is pending.
Vassilev and Manukyan discussed opportunities for boosting the development of
transport connections between the two countries because of the exceptional
growth of trade between Armenia and Bulgaria. In the last three years alone,
Bulgaria's exports to Armenia have increased more than 100-fold. A joint
declaration for cooperation in the field of communications, information and
communication technologies will be signed during Vassilev's visit to Armenia,
and an agreement for cooperation in exchange of information, marketing and
logistic studies between the Armenian Railways and Bulgarian State Railways BDZ,
Port Varna and Navigation Maritime Bulgaria.
Bulgaria set to boost cooperation with Jordan
Bulgaria and Jordan should improve their cooperation in the field of tourism
and economy, New Europe reported recently.
Economy Minister, Lidiya Shuleva, and Jordan's Deputy Prime Minister, Mohammad
Halaiqa, was due to sign an agreement on tourism cooperation. Mohammad Halaiqa
headed an 8-member business delegation willing to explore Bulgaria's business
On September 16th he was received by Prime Minister Simeon Saxe-Coburg-Gotha,
the Government's Information Service said. The two discussed bilateral relations
and the possibility of promoting trade and economic cooperation. Later the
Jordanian Trade and Industry Minister and Bulgarian Deputy Economy Minister,
Dimiter Hadjinikolov, opened a Bulgarian-Jordanian Business Forum at the
National Palace of Culture.
Economically, Jordan is an open country and foreign investors are treated on an
equal footing with local ones, said the guest. In his view the visit will boost
bilateral relations. Jordan is interested in the possibility that its railway
and maritime experts be trained in Bulgaria. This issue was discussed at a
meeting between Deputy Prime Minister, Nikolay Vassilev and Deputy Prime
Minister and Minister of Trade and Industry of Jordan, Mohammad Halaiqah, the
Transport Ministry said.
Vassilev and Halaiqah signed an intergovernmental agreement on maritime
commercial navigation and ports. With the object of easing sea shipping
regulations, both sides agreed on mutual recognition of ship documents, issued
or recognised by either of them. The two deputy Prime ministers exchanged
experiences in the field of high technologies.
During the meeting, Vassilev voiced the Bulgarian side's will to implement
"turn-key" engineering projects in Arab countries. Relations between
Bulgaria and Jordan featured high on the agenda of the talks between President
Georgi Purvanov and the guest, the President's Press Secretariat said. Jordan is
interested in the participation of Bulgarian companies in the development of the
country's railway transport and restoration of previous levels of import of
certain Bulgarian products.
According to Halaiqah, there are untapped reserves in the area of tourism. The
two assessed in highly positive terms, political relations between Bulgaria and
Jordan. The President stressed that Bulgaria greatly appreciates highly Jordan's
role in the Middle East and views it as its priority partner in this region.
Belene to operate with Russian-type units
Bulgaria will probably prefer Russian-made to Canadian-produced units to put its
second nuclear plant into operation in Belene, construction project chief,
Krassimir Nikolov, said recently, Sofia News Agency reported.
The US Parson consultants of the project advised that the country constructs two
Russian-made VVER 1,000 million watt pressurised water reactors instead of the
Canadian-type CANDU heavy water units which have technical characteristics
unauthorised by Bulgarian legislation, Nikolov said during the international
forum dedicated to the "New Nuclear Facility in Bulgaria."
A Czech-made 1,000 million watt unit of the Russian VVER-1,000 type was supplied
at the Belen site in the late 1980s and is still stored there waiting to be
fixed. The same-type reactors are currently operating in Bulgaria's Kozloduy
power plant (units five and six) and the Czech Temelin power plant.
During the forum Energy experts stated that the cost of the Canadian CANDU
technology, if applied in Bulgaria, would reach two billion Euro compared to the
much cheaper Russian technology realisable at the cost of 1.5 billion Euro. The
power produced by Canadian reactors would cost 0.04 Euro cents of 1 kilowatt per
hour, while the alternative variant of power production is calculated at about
0.03-0.035 Euro cents.
At the end of last year the government decided to complete the mothballed
project in Belene, situated on the Danube River, 250km northeast of Sofia, in a
bid to make up for the loss of four ageing 440m watt reactors at its other
nuclear plant in Kozloduy.
Reactting to EU safety concerns, Bulgaria permanently closed two of these units
in late 2002 and agreed to shut down the other two in 2006. The parliamentary
commission on energy is scheduled to convene and discuss the parameters of the
upcoming tender on the Belene power plant construction.
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