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Books on Bulgaria
REPUBLICAN REFERENCE
Area(sq.k.m)
110,910
Population
7,517,973
Capital
Sofia
Currency
Lev
President
Georgi Purvanov
Private sector
% of GDP
40%
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Update No: 099 - (26/07/05)
Post-election turn-about
Simeon Simeon Saxe-Coburg, the outgoing PM and leader of the centrist National
Movement Simeon II (NMS) resigned as Prime Minister on July 11th, upon the
convening of the new Parliament.
There was no special power handing in ceremony since the current government will
continue to exercise its prerogatives until the election of a new one. The
resignation of the cabinet will simply be filed in the National Assembly's
registrar office.
Meantime Sergey Stanishev, leader of the Bulgarian Socialist Party, which won
the general elections in June said that a possible three-party coalition that
would include the Socialists, Simeon's party and the mainly Turkish Movement for
Rights and Freedoms (DPS), has no political logic; but other members of his
party were calling for exactly that outcome to the crisis.
The Bulgarian Socialists (BSP) and the DPS party of ethnic Turks have agreed
that a Socialist prime minister should head the Balkan country's next
government, but they still need the backing of another party to form a
parliamentary majority. It was a first step forward in coalition talks since
elections on June 25th, in which BSP won the most votes, but not enough to build
a cabinet alone, or even with DPS alone. BSP has 82 of the 240 seats in the
parliament and DPS 34.
Some observers still anticipate that the outgoing Prime Minister Simeon
Saxe-Gotha-Coburg's National Movement would take part in a government coalition,
with its 53 seats. But not only is Stanashev opposed to the idea in principle,
so is Simeon, who regards the Socialists as ex-communists, with disdain.
Yet it looks as if circumstances have forced their hand, as intensive
negotiations over the weekend of July 10th-11th made the trilateral solution
appear inevitable. As those in favour of it pointed out, there is the highest
principle of all in its favour - that of the patriotism of all, whether an
ex-king or an ex-communist.
In a related development, Bulgarian President Georgi Parvanov earlier called on
the country's political parties to find a compromise in their negotiations to
form a coalition government. "There are no alternatives to a political
compromise," Parvanov said. At least three parties had to find a
"compromise formula" to give Bulgaria "a strong and effective
government", Parvanov said.
The president said that he still wanted to convene the new parliament as planned
and expected that a coalition agreement could be achieved before then.
Business on board
The Business representatives met on July 5th with Socialist party officials and
asked for the rapid formation of a stable government that would hear their
suggestions for social and economic improvement. From his side the Socialist
leader Stanishev promised to leave skeletons behind, Sofia News Agency reports,
a reference no doubt to the widespread corruption in Bulgaria.
Mr. Stanishev said that his party is committed to move ahead, leaving "the
skeletons in the wardrobe and committed to a business-friendly policy within the
new government." Bulgaria may have a democracy now, but of a decidedly
idiosyncratic kind. In what Western state would a candidate for the highest
office declare that he was going to leave the skeletons firmly in the cupboard,
even if it was his intention to do so?
The Socialist officials spoke, one may be sure without dwelling on such an
unappetising topic, with representatives of the Bulgarian Chamber of Commerce,
Union of Employers, Bulgarian Chamber of Commerce and Industry, Bulgarian
Industrial Capital Association, the Union of Private Bulgarian Entrepreneurs
Vazrazdane, Union for Private Economic Enterprise and the Bulgarian
International Business Association.
Meanwhile, the Bulgarian union of employees on the other side of the coin
appealed to the political parties to build a stable government quickly and begin
working on the commitments it took in talks with the European Union (EU).
Bulgaria is hard-pressed for time if it wants to join EU membership as planned,
in 2007. The new parliament will have to implement key reforms to have them
included in the EU annual report this autumn and avoid a possible one-year delay
of the accession. The reforms include the adoption of a new penal code, which is
envisaged to suppress widespread corruption and crime, as well as the
liberalisation of agriculture and services markets.
Anti-semitism rears its head
Already aggravating Bulgaria's EU bid is Ataka (Attack), an extremist,
anti-Semitic and anti-European party which stunned mainstream politicians and
analysts by qualifying for parliament and taking 21 of the 240 seats. Ataka
released a list of 1,500 Bulgarian Jews on its internet site (www.ataka. bg.com).
The list - under a caption saying "Aren't we tolerant?" - was online a
day after the polls, local media reported.
Posted on a forum, it included several prominent names, including that of the
Sofia Mayor Stefan Sofianski, jazz musician Milcho Leviev and painter Gredi Asa.
A spokesman for Ataka told national radio that the party did not post the list
and described it as a "provocation."
EU welcomes reforms but tells Bulgaria "keep system clean"
The EU recently praised Bulgaria's market reforms, but warned it to continue
combating organised crime in the final spurt to EU membership in 2007, Deutsche
Presse-Agentur (dpa) quoted a source as saying. "You must keep the system
clean. It is a disaster if a country has a reputation that this is taking
place," EU Competition Commissioner, Nellie Kroes, said in Sofia on May
13th, referring to crime and corruption in the economic and investment
framework.
Bulgaria had progressed immensely in reforming its market and opening it to
competition and faced "no risk" of entry delay over that issue, Kroes
said. But it still needed to reform its inefficient judicial system and crack
down on deeply rooted organised crime and corruption in the next 18 months or
face the activation of a safeguard clause in its accession treaty and the
postponing of accession until 2008.
Kroes stated on May 13th that in order to make the Bulgarian economy competitive
on the EU market, the state support should target business innovations and
R&D. She said that state support, should be channelled to small-and
medium-sized enterprises (SMEs), which account for more than 95% of all
enterprises in the EU and generate the bulk of the jobs. In her view,
registration procedures need to be sped up and streamlined. Kroes suggested
providing risk capital as state aid to start-up businesses so that they are not
encumbered by banks.
The EU commissioner expressed her satisfaction with the professionalism of the
Committee for the Protection of Competition and with Bulgaria's progress in the
field of competition and anti-trust policy. She said that provided the
institutions continue working at the same pace, there is no risk for Bulgaria's
EU membership.
Meanwhile, Foreign Minister, Solomon Passy, while addressing Bulgarian farmers
and people working in the agriculture sector in Pleven, said Bulgaria's entry
into the EU provides new opportunities to the country's agriculture sector.
Passy announced this during the national informative campaign on the prospects
of Bulgaria's EU entry. Passy said: "I am optimistic as Bulgaria's
agriculture does not need promotion and I am optimistic as we have traditions in
that sector."
The foreign minister also pointed out that the negotiating team has done very
intensive work under the guidance of former Prime Minister, Simeon Saxe-Coburg.
Rehn says Bulgaria's EU membership not at risk
There is no threat to Bulgaria's membership in the European Union, EU
Enlargement Commissioner Olli Rehn said after meeting with Bulgarian Prime
Minister Simeon Saxe-Coburg recently. The premier participated in a working
meeting of the leaders of the European liberal parties in Brussels on June 16th,
Bulgarian news agency quoted the government information service as saying. This
was the first session of the Council of the European Union in which Bulgaria was
an active observer.
Rehn said the debates on the constitution for Europe pose no threat to Bulgaria
so no problems would emerge if Bulgaria perseveres with the reforms. For his
part, Saxe-Coburg said that there are no reasons for concern over Bulgaria's
membership in the EU. In this connection European Affairs Minister Meglena
Kouneva said that for the first time "we are on the other side of the
door."
Following a meeting of the European Liberal Democrat and Reform party,
Saxe-Coburg compared the present situation in Europe to growing pains which are
a symbol of youth. This is the reason he does not attach particular importance
to the fears about the future of Europe.
At the same meeting, Danish Prime Minister Anders Fogh Rasmussen said that the
debates on the constitution and the budget on the agenda of the meetings of the
European leaders would not affect Bulgaria's accession to the EU. The agreements
with Bulgaria should be honoured, Dutch Secretary of State for European Affairs
Atzo Nicolai told Bulgarian News Agency.
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ARMAMENTS
Sofia launches arms plant tender
Bulgaria's Vazov Group of arms producing plants (VMZ) at Sopot, a strategic part
of the country's defence industry, will be offered 100 per cent for the public
sale by strategic investors under a strategy for their privatisation approved by
the cabinet, Bulgarian News Agency reported recently.
The plants will be privatised through a two-stage publicly announced tender. The
candidates are expected to be legal entities with prior experience in military
production, trade in military produce or the use of military equipment. These
activities should have fetched them over 50m Euro in revenues in the past three
years. After the completion of the sell off deal, the buyer would be obliged to
retain more than 51 percent in the plant for five years. It is expected that
during the five years, no changes in the shareholding structure of the buyer
company will be allowed and the buyer will have to preserve his core business
and service regularly all its financial obligations, including those originating
prior to the acquisition. The binding offers will be ranked according to the
price, investment and employment programme. Sweden's SKF acquired the bearing
business of VMZ from the government in 2002. The VMZ bearing operations comprise
four factories in Bulgaria, at Sopot, Kalofer, Karnare and Bogdan. To date, the
Swedish leader has managed to modernise the plant and to secure its employees
improved working conditions.
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AVIATION
Vassilev: New airport terminal launch is on schedule
Bulgarian Deputy Prime Minister and Minister of Transport and Communications
Nikolai Vassilev and representatives of Stranag holding group recently inspected
the new terminal at Sofia airport that is currently undergoing construction,
Sofia news agency reported.
After inspection, Vassilev stated the terminal is expected to open on August
31st as planned.
Bulgarian Prime Minister Simeon Saxe-Coburg and head of delegation of the
European Commission in Sofia, Dimitris Kourkoulas, were also present at the
inspection. Vassilev added that most probably Moststroy would construct the road
to the new airport facilities.
Meanwhile, the Bulgarian premier expressed gratitude to those who had
contributed to the realisation of the project.
Bulgarian Deputy Transport and Communications Minister Sofia Kassidova said the
price offered by the company was smaller than the 12m levs allocated for the
compulsory purchase of land and the construction works.
Asked what if Strabag demands an additional amount of money to cover expenses,
Kassidova replied that the only way of settling the problem would be to refer it
to the international court of arbitration in Paris.
However, Kassidova said that so far Strabag has not filed any appeal with it.
There are also no requests for increasing the price of the project due to the
construction of the airport's new runway. It is expected that the runway should
be ready by the end of October, Kassidova concluded.
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FOREIGN AID
EU grants 85m Euro for Kozloduy NPP decommissioning
Bulgaria will receive 85m Euro in grant aid from the European Union for
decommissioning of units one to four of the Kozloduy nuclear power plant, under
an approved financing memorandum between the government and the European
Commission and under a special Phare programme 2004, the government information
office said at a cabinet meeting recently, Sofia News Agency reported.
Under the memorandum, Bulgaria will be assisted in the decommissioning of the
units in line with the western European approaches to this activity. The money
will be spent according to a 2001 framework agreement between Bulgaria and the
European Bank for Reconstruction and Development (EBRD).
Daily management will be effected after consultation between the financial
institution and Bulgaria's Ministry of Energy and Energy Resources. The Council
of Ministers mandated the finance minister to sign the financing memorandum in
his capacity as national coordinator of the assistance.
Kozloduy's work should be finished by 2007 in order for Bulgaria to be accepted
into the EU. Bulgaria approved the project for building a new nuclear power
plant, in the town of Belene last April. The next step will be the opening of an
international tender for a supplier and constructor.
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FOREIGN LOANS
World Bank approves loan for key social areas
The World Bank approved on June 2nd a US$150m third programme adjustment loan
for Bulgaria, the last in the series of PALs that is providing a single umbrella
of support to reforms across different sectors of the Bulgaria's economy while
assisting the advancement of Bulgaria's reform agenda, a World Bank statement
read recently. The loan signed for PAL 3 is to be paid over in 17 years,
including a 5-year grace period, New Europe reported.
PAL 3 plays an important role in moving forward Bulgaria's structural reform
agenda, which would help improve prospects for Bulgaria's successful EU
integration, the World Bank Sofia Office said. The World Bank urged that more
efforts be made in reforming the judiciary and reducing corruption for a better
business environment.
The reforms supported by the PAL programme have helped Bulgaria fulfil important
achievements in the areas of large-scale privatisation, infrastructure,
improvement of the business climate, banking and non-banking financial sector
reform, public sector governance, enhancing the access to quality education and
health services, and increasing the effectiveness of social assistance. Public
service delivery at national and local levels needs to be enhanced to provide
quality service to citizens.
Bulgaria should deepen the reforms in education and health to ensure equal
access, quality and fiscal sustainability and to strengthen the skills and human
resources necessary for a competitive economy.
A flexible labour market would help improve employment opportunities.
Investments in infrastructure are needed for enhanced transport and water
services. Reforms in the social protection and social services should continue.
The total amount of the 3 loans under the PAL programme is US$425m. PAL 1 for
US$150m was approved in February 2003 that was aimed to improve the business
environment, the restructuring of infrastructure sectors and further deepening
of the financial sector. PAL 2 added another US$125m equivalent and main target
was public administration reform. PAL 3 is equivalent to US$150m in value.
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MINERALS & METALS
Cambridge Mineral Resources strikes gold in Bulgaria
Cambridge Mineral Resources (CMR), a London-based mining company, recently
announced an important gold discovery in Bulgaria. According to the company,
Cambridge's Bulgarian subsidiary found gold mineralisation at its Polski Gradets
permit in the east European country, New Europe reported.
The Polski Gradets permit is located in central Bulgaria near the town of
Topolovgrad. Exploration has led to the discovery of a style of gold
mineralisation little recognised in Bulgaria that has strong affinities to the
world class Carlin-type gold deposits of Nevada, the company said. A substantial
drilling campaign is being planned and is to be completed over the summer.
Currently, CMR is evaluating the Lomero-Poyatos gold-rich polymetallic deposit
in southern Spain, developing the Marcelita-2 gold mine in Peru and has further
exploration interests in joint venture with Ivanhoe mines in Bulgaria and
Serbia.
The Polski Gradets permit is included within CMR's joint venture agreement with
Ivanhoe Mines, which is currently earning into the project by providing the
exploration funding. Mineralisation was historically known to occur as quartz
vein systems up to 2,000 metres in length, which have been explored by the State
for tungsten and gold. Meanwhile another UK firm, Orchid Developments, has
planned to raise 20m Euro for investment in Bulgaria from a flotation on the
alternative investment market of London, Bulgarian news agency reported. Orchid
Developments is a UK-registered property developer and hotel operator active in
Bulgaria, the latest in a string of companies that is searching to raise capital
to access the relatively untapped property markets of Eastern Europe.
The flotation at AIM could value the company up to 100m Euro. The company also
stated that it would raise debt from European Bank of Reconstruction and
Development (EBRD), which gave a nod for 30m Euro of senior debt available for
five of Orchid's projects.
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TELECOMMUNICATIONS
Telekom Austria acquires MobilTel
Telekom Austria signed on June 1st a share purchase agreement for the
acquisition of 100% of Bulgarian leading wireless operator Mobiltel AD. The
acquisition of MobilTel is part of the Austrian telco's strategy to expand in
Central and Eastern Europe, Sofia News Agency reported.
The deal is expected to be finalised presently instead of in the fourth quarter
as the Austrian telecom accelerated its planned purchase of Mobiltel through
early exercise of the call option acquired on December 17th.
The deal totals 1.6bn Euro, including the call option price of 80m Euro paid by
Telekom Austria in the first quarter of this year, two payments of 182m Euro and
100m Euro deferred until the fourth quarter of this year as well as the net debt
of Mobiltel which will be assumed by Telekom Austria at closing. In June 2004 it
totalled 450m Euro.
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TOURISM
Bulgaria's image grows as an alternative tourism destination
A recent analysis carried out by the Bulgarian Association for Alternative
Tourism (BAAT) said the country's rich history and tradition coupled with
abundant natural resources has made Bulgaria a preferred alternative tourism
destination. A SWOT analysis of the alternative tourism in Bulgaria identified
the key need for up-to-date management to feed its successful growth, Standart
reported.
Safety, an increasing number of tour operators and programmes for alternative
tourism and enhanced media awareness are cited as the strengths of alternative
tourism in Bulgaria, which includes tourism packages and individual tourism
services for natural and cultural tourism. The friendly nature of Bulgarian
people and the excellent cuisine also counts.
BAAT called for the development and adoption of new tourism laws, improved
infrastructure and services, the introduction of common quality standards and an
evaluation system for accommodations and other services. In order to utilise
these available opportunities, the establishment of new education and training
centres for qualification of mountain guides, activities coordinators and
managers of guesthouses is recommended. Experts said the massive construction
projects on the Black Sea may lead to an exodus of tourists from there and also
from Bulgaria.
BAAT said Bulgaria will become a leading alternative tourism destination among
the Balkan and Eastern European countries by 2007.
Meanwhile, in a special report, Bulgaria's Culture and Tourism Ministry
announced on June 2nd that Czech tourists prefer Egypt and Bulgaria for their
holiday destinations. Last year about 100,000 Czech tourists visited Bulgaria
and their number is expected to jump up this summer season. Interest of Czech
holidaymakers to go to Bulgaria has been growing 25-30% annually, the ministry
said. There are more than 20 Czech tour operators that offer holidays in
Bulgaria this year.
A special video presenting the Bulgarian tourism potential was shown in an event
in Prague in which Czech journalists and representatives of the leading tourism
agencies participated. The event was co-organised by the Czech and the Bulgarian
side, and introduced Prague's media to the latest development in the Bulgarian
tourism industry. The number of Czech tourists visiting Bulgaria increased 65%
in January-April 2005.
Air travel is the most preferred mode of transport. Summer flights exceed 450,
serviced by 3 Bulgarian and 2 Czech air carriers. Bulgaria has succeeded in
regaining its position in the Czech tourism market, with the bulk of holiday
makers headed for the Black Sea.
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TRANSPORT
Bulgaria approaches TERNA to renovate railway
The Bulgarian government contracted Greek company TERNA for the construction and
modernisation of Krumovo-Parvomaj railway road, a key part of a European
transport corridor, New Europe reported recently.
The Bulgarian Transport Ministry told Standart that this is one of the biggest
projects for railway infrastructure upgrade since 1999 in Bulgaria. The
Plovdiv-Slivengrad road project is worth 340m Euro and is co-funded by European
Investment Bank (150m Euro), ISPA programme (153m Euro) and the state budget
(34m Euro). The new and renovated railway road would allow passengers' trains to
run at a speed of 120 km/h. The project that is being inspected by the European
Commission, envisions the construction and modernisation of the Krumovo-Parvomaj
stretch of the Plovdiv-Svilengrad railway.
EU approves Lyulin motorway tender dossier
The Bulgarian Regional Development and Urban Planning Ministry recently
announced that the European Union Commission approved the tender dossier of
Lyulin motorway, Standart reported.
The route of the motorway runs along the Pan-European Transport Corridor IV in
its Vidin - Sofia - Koulata section. It will link Sofia ring road - Malo
Bouchino - Golyamo Bouchino - Daskalovo and will have a total length of 19km.
The value of the project stands at 148.45m Euro, including 111.338m Euro grant
from the budget of the European Commission and Bulgaria offered 37.112m Euro.
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