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Key Economic Data 
  2003 2002 2001 Ranking(2003)
Millions of US $ 6,963 5,249 4,800 104
GNI per capita
 US $ 1,540 1,270 1,240 123
Ranking is given out of 208 nations - (data from the World Bank)

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Borislav Paravac

Update No: 098 - (01/07/05)

Socialists win the elections
The elections to parliament on June 26th have been won by the former communists, now called Socialists, who took 31% of the vote. The outgoing National Movement of former king, Simeon 11, obtained just under 20%, while the Muslim-based Movement for Rights and Freedoms got 12.7%.
Sergei Stanishev, the head of the Socialists, is ready to form a government with the latter, although they need a minor party to back them in the 240-seat parliament to make up a majority.

Magnificent record
Actually, Bulgaria has made progress by leaps and bounds under the able and pragmatic leadership of Prime Minister Simeon Saxe-Coburg (former king Simeon 11). But being in power in Bulgaria invariably brings unpopularity. Highly unpopular reforms are always necessary. His predecessor government had been highly competent but were punished by loss of office for the same reason, that people did not feel the benefits of an improved economy
From the financial wilderness and political uncertainty of the past decade, the reformist Saxe-Coburg-Gotha government has brought Bulgaria a long way in a few years to its present healthy state, offering a stable and transparent economic environment plus legal and operational framework oriented towards the needs of business. In addition state-sponsored temporary job programmes and a rise in private sector employment helped to cut unemployment from 17.21% in October 2001 to just about 11% now. 
The overall readiness of the country on the verge of the European Union accession on January 1st 2007 is evident from the European Commission's latest progress report, eulogising Bulgaria's improvement in the political arena, its economic fast track and adoption of EU laws.
Saxe-Coburg in a recent publication aptly pointed out, "Bulgaria today has returned to the world stage. Our strategic geographical location, backed by a strong and growing economy, allows us to punch above our weight in the Balkans, in Europe and in our relationship with other continents and trading blocks. Economic growth averaging five per cent for the past few years, combined with falling unemployment now down to 11.5%, inflation below 6% in 2004 and a stable currency pegged to the Euro have earned us the approval of the international financial institutions."
Within the last few years, Bulgaria has managed to come out of the shadows of post-communist economic blues to experience brisk economic growth, rising consumption levels and a sustainable stable market economy thus ensuring a steadily increasing inflow of foreign capital investment.

IMF approval leads to FDI
This is evident from the successful completion of the stand-by agreement (SBA) with the International Monetary Fund (IMF) in spring 2004 and replacement by another SBA running for two years from September 2004 - thus covering the EU accession period until January 2007.
Interesting to note that the SBA has been of "precautionary" nature with money disbursed not automatically but only if it is actually needed. This IMF approval also helps the country to attract foreign direct investment (FDI) and keeps a leash on governmental spending. 
Moreover, with the EU accession being formalised, Bulgaria will be a net recipient of EU funds and this will impact real economy and the policy-forming environment. With EU funds comes the stale outlook and the vibrant economic development can be gauged by the fact that the credit rating of Bulgaria has been increased 112 times in the past three years.
This resulted in Bulgaria notching up the most attractive foreign direct investment destination spot in eastern Europe and gobbling up nearly two billion Euro in 2004 alone. According to data available, with foreign investment accounting for 9.2% of its GDP, Bulgaria can boost of the highest FDI per-capita levels in the region.
The pragmatic policies of the Saxe-Coburg government brought this windfall of foreign investment. Moody's credit rating agency listed reasons to invest in Bulgaria as, "strategic location, skilled labour, excellent technical qualifications, competitive cost, robust legal framework and expected EU membership."
According to financial pundits the global outlook for FDI is bright. Pavel Ezekiev, chairman of Invest Bulgaria Agency was quoted by local media as saying that the government's strategy at the moment is to attract investments from countries that have not made significant contributions to its local FDI. The focus was cited as on the United States, Canada, United Kingdom, Ireland and Sweden as well as on Spain and France.

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Coca-Cola bottling branch buys Bulgarian mineral water plant

The Coca-Cola Hellenic Bottling Company (CCHBC) has acquired the Bulgarian mineral water company Bankia, New Europe reported recently.
The Athens-based CCHBC, one of the world's largest bottlers of Coca-cola products, bought bottling facilities on the outskirts of Sofia and the Bankia mineral water brand-name. The value of the deal was not disclosed, reports said. CCHBC is one of the largest bottlers of non-alcoholic beverages in Europe. Operating in 26 countries with a total population of more than 500m, CCHBC was created in August 2000 with the merger of the Athens-based Hellenic Bottling Company SA, with Coca-Cola Beverages plc. CCHBC's product line includes carbonated (CSD) and non-carbonated (non-CSD) soft drinks, juices, water, sports and energy drinks, and ready-to-drink beverages such as teas and coffees. With a geographical range that stretches from the Republic of Ireland to the eastern-most parts of Russia, and from Estonia to Nigeria, CCHBC is focused on meeting the demands and local tastes and cultures of all of its markets.

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Bulyard to build 3 ships for NMB

Bulgarian shipping company, Navigation Maritime Bulgare (NMB), and the new shipbuilding consortium, Bulyard, on May 22nd signed their first mutual contracts for the building of three ships. Transport Minsiter, Nikloay Vassilev, who attended the signing ceremony told Sofia News Agency that the ships worth 58m Euro will be ready in two years.
NMB fleet has grown to more than 83 owned ships totalling over 1.8m dwt, making the company the biggest ship owner in Bulgaria and one of the largest in the Black Sea and Eastern Mediterranean region.

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Telekom Austria takes over Bulgaria's Mobiltel

Telekom Austria (TA) and its mobile phone subsidiary Mobilkom Austria signed an agreement recently for the 100% takeover of Bulgaria's mobile phone network operator Mobiltel, Deutsche Presse-Agentur (dpa) reported.
The signing of a share purchase agreement was earlier than expected, said TA spokesmen. The Austrian group had already had a purchase option since December 2004. The transaction was due for completion in July. Mobiltel, estimated to be worth 1.6bn Euro, was owned by a consortium of Austrian and international investors.

M-Tel wins UMTS licence

Bulgaria's Deputy Prime Minister and Transport Minister, Nikolay Vassilev handed on May 11th the 3G/UMTS licence to the three wireless operators in the country. Bulgaria's first and largest GSM operator MobilTel was granted a licence to launch the first UMTS 3G network in this country, Sofia News Agency reported.
MobilTel was issued a 3G/UMTS licence, Class A, which it won at a tender with an offer of 78m levs (40m Euro). MobilTel won the UMTS Class licence tender for a 20-year term on March 31st, 2005. The tender included a secret bidding and took two hours. The UMTS licence was granted to M-Tel CNO, John Treuge, by the Chairperson of the Communications Regulatory Commission (CRC), Gergana Surbova. Deputy Prime Minister, Nikolay Vassilev, attended the festive ceremony. Vassilev said he is pleased to know that there are still companies in Bulgaria which have the financial stability to pay tens of millions levs for licence rights and to invest hundreds of millions Euro in the construction of their networks.

Telco signs treaty with Bulgarian cable operators

Bulgarian Telecommunications Company (BTC) has struck a deal with national cable operators to settle the dispute over the terms and price of usage the telecom's subterranean duct infrastructure, New Europe reported recently.
Under the agreement signed on May 5th, cable operators were due to declare by May 20th all cables placed into the underground duct system of BTC. In turn, the formerly state-owned telecom agreed to delay the introduction of new charges for usage of that system giving cable operators two months to legalise the additionally placed cables.

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New resort near Borovets

Bulgaria is planning to build a new resort near popular Borovets; this is part of the government's special strategy for the development of Borovets until 2015 which was published on May 12th, according to Sofia news agency. 
The new holiday settlement will be located between Borovets and Samokov and is expected to have an accommodation capacity for about 7,000 people. In the first phase of the project, the number of people employed in the local tourism business should double. The accommodation potential should increase by 2007, while the ski runs will be broadened to match European standards. The second phase will be related to the building of the new resort. Following will be the modernisation of the area with an altitude of 1,400 metres.

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CPC approves Trakia highway concession

Bulgaria's Commission for the Protection of Competition (CPC) endorsed the Trakia Highway concession agreement that will be valid for 35 years, New Europe reported recently.
The CPC's favourable opinion on the deal was one of the necessary conditions, so that the Trakia Highway concession agreement, which was signed in April, can come into force.
Three Portugal-based firms - MSF-Moniz da Maia, Lena Engenharia e Contrucoes and Somague Concessoers e Servicos, along with two Bulgarian state-run companies Technoex-portstroy and Avtomagistrali, took the concession of the highway without holding a tender or bidding. In April the government signed the contract for granting a 35-year concession for the Trakia Highway to a Portuguese consortium.
The cost of the project is estimated at 720m Euro with 590m Euro planned investments until end-2007 and another 125m Euro until end-2009. The deal has been challenged by observers, including Transparency International Bulgaria, a non-governmental organisation (NGO) devoted to combating corruption.
In the agreement, signed by Minister of Regional Development and Public Works, Valentin Tserovski, the state is to pay compensations to the concessionaire, if the traffic rate on the highway is very low.
At the same time, the Portuguese are guaranteed 12% of the annual profit. The highway will cost 717m Euro. The money will be taken on loan from the firms. The favourable opinion of the European Investment Bank is also necessary for the concession agreement to come into force.
The EIB is to grant a loan of 100m Euro to the state for the construction of two sectors of the Trakia highway and an other 60m Euro for the construction of other road sectors. "We are aware of the fact that there are certain contradictions in the Trakia highway concession agreement. We are conducting negotiations with the Bulgarian authorities, mainly over the phone for the time being," an EIB representative told Standart.
Experts claim that it is likely that the EIB will allow building projects, financed by the European Bank with low-interest loans, to be granted as a concession. Bulgarian state officials are presently mulling over the possibility of how to outmanoeuvre the EIB in the Trakia highway deal, Standard quoted a source as saying. The idea is that the loans worth 160m Euro, to be repaid together plus the interests, provided in case of pre-term repayment. Thus, these sectors of the highway will be included in the concession agreement, but the loans will be taken for their construction, in which there will be higher interests and the price of the Trakia highway project will rise further.
The majority of the CPC members voted that in the agreement there was no illegal state assistance in favour of the concessionaire. 

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