Books on Bulgaria
% of GDP
Update No: 101 - (27/09/05)
Bulgaria is enhancing its international profile by the month.
The current coalition government was formed in August, after the socialist
party, led by Sergey Stanishev, unseated the centrists, led by former Prime
Minister Simeon Saxe-Coburg.
The wisdom of Solomon; NATO Shortlists Three Military Bases in Bulgaria
The USA and NATO have been eyeing Bulgarian military bases for troop deployment
possibilities. As an expected outer door of the EU, should it become a member of
the Union in 2007, and an effective Alliance member, Bulgaria has been seen as a
strategic partner in the western policy to the Near and Far East, and Russia.
Negotiations are under way between NATO and Bulgaria about Novo Selo, the
airport at Bezmer and the Burgas port, Bulgaria's former first diplomat Solomon
Passy has announced. While on a visit to Black Sea's Burgas, Passy, who is now
head of the parliamentary foreign police committee, said some two to three
thousand US military are expected to be deployed in these three locations.
A NATO military delegation was due to arrive in Bulgaria on October 1st, Solomon
Passy added, to further talks on the military deployment with the new government
of the Balkan country.
Solomon Passy specified that the military port of Burgas is not at the moment on
the list of negotiated locations, but he stressed that "Bulgaria should be
ready to respond with provision of bases and facilities to any possible need of
the EU or NATO."
Sofia, Washington discuss Bulgarian withdrawal from Iraq
Bulgaria's new Prime Minister, Stanishev, has said the country will withdraw its
troops from Iraq by the end of the year, stepping back from the socialists' vow
to pull out the soldiers sooner. As elsewhere in Europe the left are now highly
disillusioned with the war for obvious reasons. Several Bulgarian soldiers have
lost their lives.
The change of government has confirmed that Bulgaria is to withdraw its troops
from Iraq. Bulgarian and American officials have discussed Sofia's decision to
withdraw its troops in Iraq, the country's Foreign Ministry announced. Bulgarian
and US experts have discussed Bulgaria's future role in the democracy
establishing process in Iraq.
Representatives of the Bulgaria's Foreign Ministry, the Defence Ministry and the
General Staff of the Bulgarian Army have discussed the situation with military
experts from the US State Department, the Pentagon and the US Embassy in Sofia.
Bulgaria's parliament, which has the final say over Bulgarian troop deployments,
approved in May a government plan to withdraw the country's 450 troops in Iraq
by the end of the year.
Bulgaria's PM seeks institutional coordination
Prime Minister Stanishev of course has domestic matters as his top priority. The
first few months in office can set the tone for a whole administration. He
arranged a meeting to discuss the coordination between the executive power and
the Parliament at his headquarters on September 20th.
The meeting gathered the left-wing ministers and their deputies, district
council leaders, the chairmen of the parliamentary commission in an attempt to
optimise the performance of the new government.
Stanishev urged the ministers to announce the priorities for each ministry so
that the governmental programme could be prepared by the end of October. The PM
also recommended that they keep their work as transparent as possible and to
follow the national interests rather than their own.
Bulgaria should start preparations for utilizing EU funds available after
accession before its entry pinned for 2007, an expert warned.
The use of consultants is highly recommended because of the huge amount of
knowledge required in the process, John Ayerst, former adviser to the Finance
Ministry on the issues of pre-accession, said at a public debate on regional
development in the second-biggest town of Plovdiv. He gave an example from the
United Kingdom, where funds utilization in the underdeveloped regions of
Southwest and Northeast parts of the country was as low as 10% within a year for
lack of proper consultancy work.
The drawing up of strategies and plans for development at the local, district
and regional level, requires a normative base and institutional structure.
Coordination and planning, partnership with NGOs, business ethics and
entrepreneurial culture were on the agenda of the debate, organized by the
Delegation of the European Commission to Bulgaria. "European initiatives
for improving the business climate for SMEs and agriculture producers"
included three panels of debates on the draft plan for the development of the
Central Southern region, local and foreign sources of funding for business
infrastructure, for improving the competitiveness of agriculture and of organic
John Ayerst assessed Bulgaria's progress highly in the development of small and
medium-sized enterprises (SMEs), citing the support they get from the central
government, chambers of commerce and business organizations. Calling SMEs work
"embedded" in Bulgaria's future, he warned that the business climate
should provide more incentives for investors to meet Europe's standards for
competitiveness and facilitate entry on the internal market.
"The ability to develop natural comparative advantages to encourage
entrepreneurs includes strong business environment, strong business ethics and
reduced corruption," Ayerst said. He praised the activities of the
Bulgarian Business Leaders Forum (BBLF), one of the most influential communities
in the country, in the field. Among the priorities in industrial policy he
singled out encouraging entrepreneurship, better business climate and access to
tools for funding and consultancy.
Dorotea Duncheva, chief inspector at the "Strategic Planning for Regional
Policy" directorate with the Regional Development Ministry, criticized
municipalities and districts for failing to prepare their plans for development.
Meglena Rusenova, deputy governor of the district of Plovdiv, thanked the
Delegation of the European Commission to Bulgaria, for its efforts to
disseminate information about Bulgaria's future in the European Union.
Direct flight to link Sofia, Manchester
National air carrier Bulgaria Air is launching a new route from the country's
capital Sofia to Manchester, UK. This first flight is scheduled to take place
from October 2, Sofia news agency reported recently.
According to the winter flight schedule, the Sofia-Manchester-Sofia flights will
be performed on Thursday and Sundays. Bulgaria Air performs flights from the
capital Sofia to more than 20 cities in Europe and the Middle East. Regular
direct lines connect the sea airport of Varna with London, Vienna, Amsterdam,
Berlin and Frankfurt.
Fitch upgrades Bulgaria's to BBB from BBB-
International rating agency Fitch has upgraded Bulgaria's long-term foreign
currency rating to BBB from BBB minus and local currency rating to BBB+ from
BBB. The country ceiling is also upgraded to BBB from BBB-. The short-term
rating is affirmed at F3. Following the upgrade, the outlook is now stable, the
finance ministry said in a press release, New Europe reported.
"Bulgaria's sovereign credit fundamentals are underpinned by sound fiscal
policy and falling government debt, large foreign direct investment inflows, as
well as rapid and sustainable growth. They are also supported by the good
prospects for economic policy continuity with the government that has emerged
from the June elections," said Nick Eisinger, Fitch analyst for Bulgaria,
said. In a statement the agency pointed out that the three parties that form the
new coalition government share common views on the need to maintain a prudent
fiscal policy, to uphold the structures demanded by the currency board
arrangement and to finalise the reforms needed to secure Bulgaria's accession to
the European Union, according to Fitch. Fitch expects this to occur in January
2007, despite some outstanding judicial reforms and a more fluid situation
within the EU itself, although the chances of a one-year deal to EU entry have
increased. The agency expects a second consecutive year of fiscal surplus (over
1 per cent of GDP).
The fiscal reserve account has allowed the government to repay all outstanding
brady debt, which should underpin a reduction in general government debt to
around 30 percent of GDP by end of the year from 39 per cent of GDP in 2004,
Fitch said. The current account deficit remains a weak spot of an otherwise
strong macroeconomic backdrop, and highlights the need to bolster domestic
savings and cool down the economy. However, much of the widening is driven by
investment, and foreign direct investment coverage of the external shortfall is
one of the highest of all countries in the BBB rating range, Fitch said.
N-Plant revenues larger than planned
In the first 6 months of the year, the revenues of the Kozloduy nuclear power
plant exceeded the target amount by 45,140,000 levs as the amount of electricity
generated and sold by the plant was larger than planned, Sofia news agency
On August 10th, the plant also reported successful implementation of the final
phase of a programme to upgrade its Units 5 and 6, as well as a programme for
repairs. The scheduled annual maintenance and refuelling of Unit 5 are nearing
completion. Over the first half of the year, the company invested over 53m levs
of its own funds in the implementation of its investment programme.
Stanishev: EU membership is key objective for Bulgaria
The Bulgarian government and the World Bank agree that European Union membership
is the overriding objective for the country, Prime Minister, Sergei Stanishev,
said on August 26th after a meeting with World Bank (WB) country chief for
Bulgaria, Anand Seth, Sofia News Agency reported.
This was Stanishev's first meeting with Seth after he took office as prime
minister on August 16th. During the meeting, Seth said Bulgaria needs to
preserve its economic stability, complete its EU membership preparations, boost
consumer income, promote economic competitiveness and attract more external
With the World Bank's three-year programme in Bulgaria having ended in July, the
prospects for cooperation were discussed during Seth's visit. Stanishev said
that relations between Bulgaria and the World Bank were at a crossroads. He
added that strategic cooperation with the World Bank is possible in long-term
programmes and projects that should be well coordinated.
"We know that Bulgaria has achieved much in its economic development in
recent years, but some problems will take a joint effort to overcome," he
said, citing the example of low income level, which is lower than that of the EU
and even of the new EU members.
Stanishev stressed that the Bulgarian economy still lagged behind in
competitiveness, citing the large trade deficit and the current account deficit,
which has been growing steadily in the last seven years. Meetings with World
Bank working teams were scheduled for September and early October, at which the
main projects and parameters of the future cooperation between the World Bank
and Bulgaria were to be agreed, Stanishev said. Seth also said Bulgaria still
does not rank among the top 50 countries in economic productivity and the World
Bank would like to see it happen.
BTC unveils name for 3rd mobile operator
The Bulgarian Telecommunications Company (BTC) plans to launch its mobile
operator by Christmas under the name Vivatel, the company announced recently
after a country wide survey, Sofia News Agency reported.
"The launch of Vivatel will bring real competition on the Bulgarian market
of mobile communications," after years of market domination by just two
companies, said Denis Wallach, BTC's chief executive officer.
Currently, two companies offer GSM services in Bulgaria - Mobiltel, which was
recently acquired by Telecom Austria, and Greek-owned Globul. According to
Wallach, the new operator would offer "much lower GSM rates" than
these of Mobiltel and Globul, and media reports said Vivatel prices would be up
to 20 per cent lower. He added that the Bulgarian public will witness an ever
greater market activity synchronised with the pace set by BTC and BTC Mobile.
The network's operator, BTC Mobile, has polled employees of the national dealer
network and has received a positive reaction to the choice of brand name. BTC
Mobile chose two advertising agencies through a competition to service the third
mobile operator, the BTC press centre said.
Leo Burnett Sofia will carry out the media campaign involving the drafting of a
creative concept for television, radio, external advertising and internet. The
Kres agency will be in charge of the non-media advertising that will organise
and hold events, promotions and games.
Last year the government sold the majority 65 per cent stake in BTC - the
country's largest fixed-line telecom to Viva Ventures Holding GmbH, a
Vienna-based unit of US equity fund Advent International. At the same time, the
company was awarded a GSM operator licence. In January, the minority package was
sold off at the Sofia stock exchange to a number of smaller investors.
According to official statistics, Bulgaria's telecommunications market last year
reached a volume of 2.5 billion levs (1.3 billion Euro). In 2004 the market grew
13 per cent, with the wireless services up by 25 percent, the state telecom
regulator said. Plans were to launch the third mobile network this April, but a
delay was imposed because of auctions for UMTS licences and BTC Mobile
negotiations with MobilTel.
Tourist arrivals up 7% in January-July
According to preliminary data released by the Bulgarian Tourism Ministry,
tourist arrivals rose 7% in January-July to over 2.7m, Sofia news agency
reported recently. Tourism revenues from international tourism gained 10%
year-on-year to stand at 706m levs, up 9.2% in comparison with the same period
last year. The data indicated the amount of cash spent by the average foreign
holiday-maker increased insignificantly from last year. This year's top growth
markets for the Bulgarian tourist industry were Russia (+13%), Romania (+18%)
and Turkey (+42%). The ministry also said that over 2.7m foreign tourists spent
their summer holiday in Bulgaria by the end of the July.
The released figures came amid fears that over-construction and poor
infrastructure would harm the tourism industry this year. Nearly 100% of the bed
capacity in Bulgaria's major sea resorts has been booked, according to a report
of the culture and tourism ministry. It indicated that European Union members
account for more than half of the 2.7m foreign holiday-makers who visited
Bulgaria by the end of July. The number of the British tourists is marking an
increase by 42% in comparison with the same period last year, those from Spain -
The tourists from Scandinavian countries have gone up by 30%. The same upward
trend is visible in the number of tourists from the newly acceded EU member
states - Poland (16%), the Czech Republic (12.5%).
Trakiya Highway deal on the right track
Bulgarian Regional Development Minister, Assen Gagauzov, announced that the deal
for the concession of Trakiya Highway was due to be officially unveiled, Sofia
News Agency reported.
The key southern road-belt was granted on a 35-year concession to a
Bulgarian-Portuguese consortium. According to Gagauzov, the ISPA funds could
finance the highway reconstruction once the country enters the European Union in
2007, but this would delay the finalisation date until 2011. The joint venture
comprised of two Bulgarian state-owned companies, Highways AD and
Technoexportstroy, and the Portuguese firms MSF, Lena, and Sacyr Vallehermoso's
Portuguese unit Somague, signed a government contract last March to restructure
and complete the construction of Bulgaria's second largest cross-country
highway. Gagauzov stated that the supreme administrative court fixed October 11
as the date to hear the case of Trakiya concession deal.