Books on Bulgaria
% of GDP
Update No: 097 - (26/05/05)
Elections to parliament
The Bulgarians face parliamentary elections on June 25th. Prime Minister Simeon
Saxe-Coburg's National Movement, which rules with a minority Turkish party, is
on only 13.9% in the polls, whereas the main opposition, the socialist BSP, is
Simeon, the former king of the country, made the mistake of promising to double
living standards in 800 days when elected in 2001. He failed of course, a
predictable outcome in a transition economy.
Not that the economy has been doing badly in the aggregate. GDP growth has been
consistently in the 4% range over the last four years, as indeed it was
beforehand when the BSP was in power. Car sales have been booming and recorded a
remarkable jump of 48% in the first three months of the year, exactly the sort
of miracle Simeon promised.
But other areas of consumer demand are not rising at such a breakneck speed. It
is very hard to win a second term in a country which is still after all very
poor by European standards.
The EU beckons
The Bulgarians are pinning their hopes on imminent entry into the European Union
(EU). A decisive event took place on April 25th when Bulgaria and Romania were
accepted as candidates to join the EU. The target date for entry is January
2000, but it could be delayed for either of them if they do not comply with the
full panoply of l'acquisition communitaire, the set of house-rules of the
Bulgarians impatiently eye a large electronic clock in central Sofia, which is
counting down the time remaining until Bulgaria joins the European Union, a goal
the country set itself immediately after the fall of communism. The clock now
stands at around 600 days. Three out of every four Bulgarians expect a better
life in the club of the rich - higher salaries and pensions and better job
opportunities in other EU member states.
Simeon may not have delivered in his 800 days; but the EU will in 600. This is
all of course rather primitive thinking.
EU funds to the rescue
Nevertheless, a huge influx of funds from the EU lies ahead. "We see a
promised land on the horizon," Foreign minister, Solomon Passi said, eyeing
the more than 44bn Euro (US$56.5bn) earmarked by Brussels for his country and
With it, following the expansion in 2007, Bulgaria will receive the largest
financial injection in relation to the GDP of any new member. Local politicians
from all parties regularly refer to EU billions.
And Bulgaria, one of the poorest prospective members, needs the cash badly, to
at least catch up with the development of the 10 new EU states that joined in
May last year.
Despite 5.6% growth in 2004, the average monthly pay in the public sector hovers
around 160 Euro, while in industry, half of the workforce survives on less than
Conditions in the welfare and health system partly resemble those in third World
countries. Another problem is the impoverished, crime-prone Roma minority, with
its 90% unemployment rate soaring about the 13% national average.
Up to 17% of ethnic Turks, who are the other large minority in Bulgaria, are
illiterate, according to their own politicians. But it is the sluggish reform of
the judicial system that could delay Bulgaria's EU entry by a year. The
accession treaty, signed on April 25th, contains the delay clause in case Sofia
fails to meet EU standards.
The standards include courts sufficiently effective to combat organised crime
and deeply rooted corruption. As it is on the crossroads between Europe and
Asia, Bulgaria is also a destination of money counterfeiters, drug smugglers and
traffickers of women. It is a place where the dubious newly rich ostentatiously
show their power.
Foreign investors demand better legal security. They have so far poured eight
billion Euros into Bulgaria, which they describe as an attractive destination
for capital because of its qualified and cheap labour.
Particularly interesting for investors is the entire infrastructure, the
construction industry and tourism on the Black Sea or mountains in the south.
At the moment, it is impossible to estimate how much of the local industry will
be able to compete with the pressure of competition from other EU states.
The food industry is among those expected to be hit hard along with others
facing costly changes in order to meet EU regulations.
With Bulgaria's accession the EU will stretch its south-eastern border to touch
its controversial membership candidate Turkey. It will expand its territory by
110,000 kilometres square and population by 7.7m. Bulgaria will also contribute
the first Cyrillic alphabet to the Union, its nuclear power plant in Kozloduy
and plenty of enthusiasm.
Romania and Bulgaria get EU entry go-ahead
The European Parliament recently voted overwhelmingly in favour of European
Union membership for Romania and Bulgaria on January 1st, 2007 but warned both
countries to step up reform efforts to meet the deadline, New Europe reported.
The EU Parliament voted for the two countries' accession despite last minute
calls by the assembly's Green group for a postponement of the ballot.
A total of 522 deputies voted in favour of Bulgaria's EU entry, with 70 against
and 69 abstentions. Those voting in favour of Romanian accession numbered 497,
with 93 against and 71 abstentions.
European Commission enlargement chief Olli Rehn welcomed the parliamentary green
light, saying the accession treaty for both countries signed on April 25th
provided sufficient safeguard clauses to ensure that Romania and Bulgaria met EU
membership standards. "We must have a fair game. While the jury is still
out, it is now time to give the benefit of the doubt to the two countries,"
"Bulgaria and Romania must use the remaining time until the planned day of
accession to finalise their preparations," he said adding that the
Commission would keep a close watch on developments in both countries.
Martin Schulz, leader of the Parliament's powerful Socialist Group, underlined
that the EU assembly would be fully involved in monitoring progress in the 2
countries. "Many things remain to be done and the governments of both
countries will have to make strong and convincing efforts," said Socialist
group Vice President, Jan Marinus Wiersma.
"Parliament will monitor the process very closely and will make full use of
its rights," he underlined.
The comments made clear that although EU governments have set a January 1st,
2007 date for Romania and Bulgaria's membership of the union, accession could be
delayed by one year if they fail to make key reforms, such as curbing corruption
and reorganising farming. In a debate preceding the vote, there was special
concern that Romania - a country of 23m people - was still lagging behind.
Green group leader, Daniel Cohn-Bendit told the Parliament he was concerned
about the state of press freedom and governance in the country. He said his
group wanted to delay the vote.
But those in favour of Romania's membership warned that postponing the vote
would sent a "dangerous" political signal to the country.
FOREIGN ECONOMIC COOPERATION
Bulgarian, Turkish presidents discuss EU bids, economic cooperation
Turkish President, Ahmet Necdet Sezer, recently congratulated Bulgarian
President, Georgi Purvanov, and the Bulgarian people on the signature of their
country's EU Accession Treaty. "This is a historic step which, I believe,
will create an even closer bond between our countries as they have a common
goal," Sezer said, emerging from a meeting with Purvanov in Ankara, BTA web
Bulgaria is pleased with the decision of the European institutions to start
membership negotiations with Turkey, Purvanov said. The European Council has set
3rd October 2005 as the date for starting EU accession negotiations with Turkey.
Purvanov said Bulgaria will assist Turkey in the process of negotiations not
only by its support but also with concrete expert aid in spheres in which Turkey
may decide it needs support, like agriculture, for instance. He expressed his
conviction that Turkey's negotiations with the EU will be intensive and
correspond to the wishes of the Turkish people.
"Bulgaria and Turkey are not just good neighbours, we are also friends and
solid and reliable allies," Purvanov said. He noted that his meetings with
Sezer are part of an overall political dialogue which is more active than ever
before in the history of bilateral relations. "These meetings create a new
climate of confidence and a favourable foundation for contacts between our
countries' business communities and citizens," he added.
According to Sezer, there are no political problems between Bulgaria and Turkey,
the two nations share common values and are building a sound foundation to
expand their cooperation in trade and economy.
During the talks, which Purvanov and Sezer described as fruitful, they made a
comprehensive review of the current agenda of bilateral relations. One of the
topics they discussed was economic exchange. Annual two-way trade is expected to
increase to US$2bn in 2005 from US$1.8bn in 2004. Bulgaria is Turkey's second
most important trading partner in the Balkans, and Turkey tops the table of
countries with the largest number of companies investing in the Bulgarian
Sofia and Ankara should work to relax business licensing regulations on a
reciprocal basis, ease the terms of transit, and improve their infrastructure,
Purvanov said. He hailed the forthcoming inauguration of a new crossing on the
common border, between Lesovo and Hamzabeyli.
Purvanov's initiative to change the format of meetings between Bulgaria,
Romania, Turkey and Greece was met with understanding. He proposed that
bilateral meetings be superseded by quadrilateral ones and focus on topics of
interest for all four countries, such as energy and infrastructure.
MobilTel wins UMTS licence with 78m lev bid
Leading Bulgarian wireless operator MobilTel won a tender for a UMTS Class A
licence after submitting a bid worth 78m levs, New Europe reported.
Bulgarian Telecommunications Company (BTC) and MobilTel were the sole bidders
for the tender. The tender for Class A licence took place at Hall 6 of the
National Palace of Culture in Sofia on March 30th. The starting bid price was
70m levs with an increment of two million levs. As the price stood at 78m levs
it became obvious that MobilTel would win the bid. Eligible bidders were
required to provide evidence of at least 500,000 subscribers to their
telecommunication services and a turnover of 50m Euro in 2003. By the end of
2006, the UMTS will cover Sofia, Varna, Plovdiv, Burgas and Ruse, CEO Nikolay
Nikolov, told Standart. He added that over the next year and a half, 100m Euro
would be invested to build a entirely new network for the UMTS.