FREE GEOPOLITICAL NEWSLETTER

bulgaria

For current reports go to EASY FINDER

BULGARIA


  
  

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 19,859 15,608 13,600 69
         
GNI per capita
 US $ 2,130 1,790 1,650 106
Ranking is given out of 208 nations - (data from the World Bank)

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%
 



Update No: 111 - (25/08/06)

Presidential elections in October
Bulgaria is in the throes of an electoral campaign for the presidency, a largely ceremonial position, but in a transition period by no means unimportant. It symbolises the nation as Bulgaria prepares to enter the EU next year.
Prime ministers in Bulgaria tend to become rapidly unpopular, as things do not improve for the bulk of the population. Presidents are above the political fray and can remain popular despite general hardship, precisely because they are not held responsible for it.
Hence the symbolic value and resonance of the presidency. The elections are being held on October 22nd.

The Macedonian card
The Bulgarians have always regarded neighbouring Macedonia as part of themselves. It was an anomaly in their view that the Balkan wars of 1912-13 left it as belonging to Yugoslavia. The Greeks of course had similar ideas! 
There is a game afoot in Bulgaria in the run-up to the presidential elections, and it has to do with the use of nationalist sentiment. Given the views held by many ordinary Bulgarians about Macedonia, it is an easy shot to try to make political gains by leaning on Macedonia. 
With somewhat of a summer lull in news, the media in Bulgaria and Macedonia have made much of a policy statement by Foreign Minister Ivailo Kalfin about this country's small neighbour to the west. Kalfin said that Bulgaria supported Macedonia's aspirations to membership of the European Union, but wanted revision of the portrayal of Bulgaria in the country. This statement, especially on the question of history taught in schools, has been made before, but the fact that Kalfin has said it elevates it to the level of policy.
The media and politicians sat up and took notice, and in some cases took to shouting, and this is no surprise, because they were meant to. Kalfin's statement was the spawn of domestic political needs shaping foreign policy.
It is no coincidence that Kalfin's statement was followed up by remarks in an interview by President Georgi Purvanov, who is seeking a second and final term of office to which the constitution entitles him to be eligible.
It is regrettable that the question of the portrayal of Bulgaria in Macedonia is being made a political football being kicked for the sake of public spectacle. No doubt there is some validity in mutual misgivings about how the two countries depict each other and their histories. It would seem that these should be matters for discreet negotiation, rather than public breast-beating.
Why does all of this matter? It matters because much rides on the future of this region, including Macedonia, which has need of a stable European future, and all the assistance that it can get along the way towards this future. The country has unresolved domestic issues, and thus far Bulgaria has been one of the countries playing a constructive public role in regard to Macedonia and, by implication, in some small way towards the Western Balkans as a whole. 
While Bulgaria is a model of stability and predictability in South Eastern Europe, and thus is able to have the potential to attract and reassure foreign investors, no savvy business person will neglect to look at the wider neighbourhood. Few who inform themselves to any extent about the history of this region will be unaware that it is a place where matters of emotion and sentiment about perspectives on the past and present quickly turn into extremely unhelpful disputes. 
Bulgaria's leaders need to focus on continuing to build on the stability already achieved within this country and to assist in the process of making the entire region stable. If this may be achieved, including through the long and difficult process of bringing the region into the community and ethos of the EU, all concerned will gain. If delays are introduced through petty domestic politics, progress will be slowed, or even reversed. These are not difficult principles to understand, and there is no excuse for sacrificing them to petty domestic political needs.

The right-wing candidate
Georgi Purvanov, the incumbent president, hails from the left. He is the former leader of the Bulgarian Socialist Party.
The right need a voice too. Former king Simeon II, prime minister for four years, 2001-05, has pulled out. He did a good job, but could not possibly live up to his campaign promise to double living standards in a thousand days. 
Four of the main democratic parties named Nedelcho Beronov, Constitutional Court chairman, a veteran lawyer of 78 years, as their candidate for president for the October presidential elections. The news came after representatives of eight democratic parties gathered in Sofia to discuss a joint candidate for president who would confront President Purvanov, 
The August 1 meeting was just another step in a process that started four months previously. Since then, the search for a right-wing joint presidential candidate has taken a lot of turns, and so far resulted in only four of the eight parties supporting a united nominee.
At present, Beronov can rely on the support of the Union of Democratic Forces (UDF), Democrats for a Strong Bulgaria (DSB), the Union of Free Democrats (UFD) and the Democratic Party.
As for the other four right-wing parties that took part in the August 1 meeting - the Internal Macedonian Revolutionary Organisation (IMRO), the Bulgarian Agrarian People's Union-People's Union (BAPU-PU), the Gergyovden Movement and the Bulgarian Agrarian National Union (BANU) - Beronov must try harder for their support. Of those four parties, only BANU has announced that it would not support Beronov at all. The other three parties have neither denied nor confirmed their support for Beronov, which threatens to prolong the process of a joint right-wing presidential candidate once again, with less than three months before the elections.
Apparently having that in mind, DSB deputy leader Vesselin Metodiev told journalists after the meeting that a public council would nominate Beronov as a presidential candidate and the work on his campaign would start as of August 2. 

The four parties that supported Beronov's candidacy can be described as the group of the "big players" of the right-wing, since together they hold the majority of the right-wing seats in Parliament.
Beronov was initially suggested for candidate by the DSB, and later supported by the UDF after its leader and former president Petar Stoyanov withdrew his nomination. Beronov himself has stated several times that he would accept to run for president only if he had the support of all the right-wing parties. Although his nomination has not yet been officially announced, with the four main right-wing players behind him, Beronov's candidacy seems almost secure.
A sign of this was the statements that came after the August 1st meeting. The UFD, IMRO, Gergyovden and BAPU-PU requested a meeting with Beronov in order for him to persuade them to support him. Several hours later, Beronov told Bulgarian news agency BTA that "several parties would like to meet me, so I will talk with each of them and win their support". 
In the past few weeks, three main reasons against Beronov's nomination have come from the right wing. The first argument, according to Gergyovden leader Lyuben Dilov, is that the only people who could win against Purvanov were UDF leader Petar Stoyanov, DSB leader Ivan Kostov or Sofia mayor Boiko Borissov. Since Stoyanov withdrew his nomination and Kostov had never offered his, Borissov, according to Dilov, was the only suitable person for a joint right-wing candidate because of his constant popularity among Bulgarians.
This position was shared by BAPU-PU deputy leader Ventsislav Vurbanov on August 1, when he told journalists that his party was likely to meet with the citizens movement Citizens for the European Development of Bulgaria (GERB), led by Borissov. Although Borissov was never considered a potential right-wing candidate by the DSB and UDF, Beronov, when asked by BTA the same day whether he would seek support from GERB, said: "I will turn to all people with a right-wing mindset and will not turn my back on any of them".
Although Borissov said that he would not run for president in this year's elections, his political vacillation has been proven many times and his potential nomination is still on the agenda.
Previously, Borissov had expressed his sympathy for the current President Purvanov with the same passion with which he had expressed his sympathy for the right-wing, which, together with his immense popularity, might decide the winner in the elections. 
Another reason against Beronov's candidacy came again from Gergyovden. Beronov, although chairman of the Constitutional Court, is vastly unrecognisable among Bulgarians. The first time his name was mentioned in the media was when his nomination was suggested by the DSB. A good PR and media campaign might change that, but with less than three months till the elections, a lot would have to be done. 
The third reason against Beronov running as joint right-wing candidate, however insufficient it might appear, was his age. Beronov is 78 years old, and many fear that he would not attract the young Bulgarians, however honourable he might seem.
Whether Beronov is the most suitable candidate for the right wing would become clear only after the elections, but according to political scientist Evgenii Dainov, who gave an interview with private national Darik radio on July 27th, Beronov's candidacy was the final opportunity for the right-wing parties to prepare for the elections.

« Top

AVIATION

Russe Airport to open for concession

Procedures will begin shortly for the award of concession contracts for Danube Port terminals at Rousse, Transport Minister, Peter Moutafchiev, said recently, Sofia News Agency reported. 
Moutafchiev expected the government to make a decision in early August on the launch of a bidding procedure, which is likely to take between 12 to 14 months. All analysis and reports are ready, and an inter-agency working group will be set up to make a concession proposal, which will be considered by the Council of Ministers, Mutafchiev underlined. If the new amendments are adopted, the concession procedure would be launched at the beginning of September and it could be concluded in one year. As for the Rousse East and Rousse West cargo terminals of the river port, experts still disagree over whether they should be operated under a single concession contract or under two separate contracts, Moutafchiev said. He believes it is better to lump them together, because major potential investors prefer this option.

Three companies eye Bulgaria Air 

Bulgaria's private air carrier, Hemus Air, Greek-American consortium, York Capital-Olympic Investors, and the Australian Airlines, Qantas, have so far purchased the tender documents for the privatisation of national flag-carrier Bulgaria Air, Sofia News Agency reported. 
The deadline for entering the first stage of the sale, July 18, has already expired. Both Austrian Airlines and Hemus Air confirmed the information. 
Unless the carrier goes private by the autumn, a further delay in its privatisation could be fatal for the company, Transport Minister, Petar Mutafchiev, said. From those who had previously declared their interest in the sale, only "Ilyushin Finance," owned by the Russian member of parliament, Alexander Lebedev, has not yet bought documents. At the beginning of June, Bulgaria's sale body opened a public two-stage tender for the sale of 30,159 shares, forming 99.99 per cent of the national air carrier's capital. 
Sofia invited strategic and financial investors, only if the company, which owns no less than 51 per cent of the partnership, is Bulgarian or European. The successful candidate must have posted 150 million Euro of revenues in aviation services for the last two years and have flown 750,000 passengers for the same period. Financial investors are required to manage over 250 million Euro in assets or hold stakes in other companies in excess of 150 million Euro. 
A Boeing 737 was added to the eight-jet Bulgaria Air fleet on July 22, boosting the delay-plagued carrier's capacity to guarantee scheduled flights on time. The air carrier has been struggling to cope with jet under capacity and the spike in oil prices. According to unofficial sources, Bulgaria Air has lost 15 million levs so far in 2006. The company, created to succeed bankrupt flag-carrier Balkan Airlines, was supposed to break even by the summer of 2006.

« Top

ENERGY

Demand for better offers on power plant 

Bulgaria is demanding better offers for the construction of a new, 2,000-megawatt nuclear power plant, estimated to cost four billion Euro, Bulgarian Energy Minister Rumen Ovcharov said at an energy forum, Sofia News Agency reported.
In February, Sofia held negotiations with Russia's Atomstroyexport and a Czech consortium led by Skoda JS to build two 1,000 megawatt units at the Danube River town of Belene. Atomstroyexport is controlled by Gazprom and Skoda JS is owned by Gazprom unit OMZ. 
Recently, the National Electric Company (NEC) and the committee responsible for evaluating the Belene project offers requested the two major applicants for renegotiation of prices. "The prices we were offered are very close to the price for building a whole new plant, and this project is about continuing a previous construction. NETC asked for a change in the prices offered," Ovcharov said. 
According to Ovcharov, the offers for the plant's construction were too expensive. Project re-examination was possible if the two companies refused to review their offers, he added. "If we do not get improved offers, we will obviously have to reconsider the expedience of implementing the project the way it is now," Ovcharov said. 
NEC told the two applicants to use an already-supplied 1,000 megawatt Russian-type reactor and cut the time for its installation to before the initially planned 2012. Bulgaria has already spent one billion Euro on a previous attempt to build the plant in Belene, which included the purchase of a Czech-built reactor and other equipment. However, the plant was not installed, and Sofia had to leave the project in the 1990's due to environmental protests and a lack of financing. 
The project is seen as key to keeping Bulgaria's role as Southeast Europe's leading power exporter after a planned shutdown of two 440-megawatt reactors at its Kozloduy nuclear power plant ahead of its planned EU entry next year. 
The head of the Nuclear Regulatory Agency Sergey Tsochev announced that Kozloduy NPP has requested that its work on dismantling the equipment be included in the licence.

Two more heating utilities up for sale 

Bulgaria's sale body launched the sale for the district heating companies in Plovdiv, Ruse and Shumen, Privatisation Agency (PA) Chief, Todor Nikolov, said, Sofia News Agency reported.
Prospective applicants must be strategic investors engaged in the production or distribution of energy or electricity transmission. Strategic investors and consortia 50 per cent owned by strategic investors are invited to bid for 100 per cent of the Plovdiv heating company, the news agency reported.
The applicants are required to have a volume of at least 600,000 megawatts per hour of realised electricity, or respectively 1.8 megawatts per hour of heating energy utilisation for the last three financial years. Candidates are expected to have been assigned a minimal credit rating + (Standard & Poor's), B1 (Moody's Investors Service) or + (Fitch Ratings). Offshore companies and companies indebted to corporations 51 per cent-owned by the state will be barred from the procedure, the privatisation agency said.
The agency expects a sale from: Italian utility company Enel, Austria's EVN, Germany's E.ON, Gazprom and France's Dalkia. Offers will be accepted from the 80th day of the promulgation of the sell-off procedure in the Official Gazette.
The eligibility criteria for the sell-off procedures of heating utilities in use and Varna are similar to that of Plovdiv. The privatisation plans for the heating utility based in Pernik is stalled for the time being, so that the company could absorb 8.5 million Euro in reconstruction investment. Project lenders, the World Bank and the European Bank for Reconstruction and Development (EBRD), have warned the PA that they will claim the state guarantee granted to the project if the utility is put up for sale. The sell-off procedure for the Sliven heating company will be open to coal suppliers to ensure the company stays afloat after it goes private, Nikolov explained.

« Top

EU ENTRY

Preparations for EU entry going along 

Based on the study of experience of separate countries, Bulgaria is bound to write the draft and withstand its own strategy and policy in the separate spheres for the preparation of its accession to the Eurozone, reads a report of the Bulgarian delegation to the EU-Bulgaria Joint Consultative Committee, Sofia News Agency cited the Press Office of the Economic and Social Council as reporting. 
The committee held a meeting in Brussels, which is expected to be the last one prior to Bulgaria's accession to European Union. At the meeting, Jean-Marie Gobeaux, Deputy head of Unit 2 Bulgaria Team at the Enlargement DG, said that Bulgaria would be admitted to the Union according to Brussels and Bulgarian time. The analysis shows that if Bulgaria applies the correct strategy and policy and informs its citizens about the change, then Bulgaria's entry to the EU will be highly beneficial for the economy and society. 
The economic interests of households and companies and the country's macroeconomic policy are main factors to be considered at the time of joining the Eurozone area. The analysis further shows there are several critical social effects that could be expected, particularly, at the beginning of the accession to the Eurozone. The sphere of utility services with a monopoly in the market is a critical area. At the same meeting, European Commission Vice President, Siim Kallas, who is also Commissioner responsible for administrative affairs, said that Bulgaria's public administration is being reformed in the right direction. He met with Minister of State Administration and Administrative Reform, Nikolai Vassilev, and European Affairs Minister, Meglena Kouneva. 
He voiced support for the country's successful accession to the EU, the state administration ministry said. Vassilev talked about the ministry's achievements in the priority areas. Kallas stressed the importance of e-government, explaining that high technology would increase effectiveness and transparency. 
He cited that the IT sector is providing training courses to more than 10,000 employees, and computers were provided to all municipal and regional administrations. Vassilev said an e-trading law had been enacted and the ministry was working hard on an e-government law. Vassilev and Kouneva presented a programme for transparency in the performance of the administration and of senior officials, as well as measures implemented to achieve more modern governance with a well-functioning public administration applying European practices and policies. At the end of the meeting, Vassilev invited Kallas to visit Bulgaria in September.

« Top

TELECOMMUNICATIONS

Mobiltel offers new cheap calls service 

Bulgaria's biggest mobile phone operator, MobilTel (M-tel), launched a new service to reduce prices for people aged 14 to 26 to 0.01 levs a minute if they sign up by the end of August for the new cellular service rolled out by Mobiltel, Sofia News Agency reported. 
The service would also be available for clients using prepaid services. The service is registered under a new trade mark called LOOP. The operator would use the M-tel network, and LOOP clients could use all the services M-tel presently offers. M-tel customers, regardless of their subscription plan, could also benefit from LOOP prices. LOOP offers a tariff of 0.39 levs per minute for calls to non-LOOP phone users, and the price of an SMS would be 0.14 levs. The charge for subscribers contracted after August 31 will be 0.05 levs per minute for calls within the LOOP network. The 0.01 levs per minute tariff will increase to 0.12 levs per minute when the subscriber exceeds a limit of 500 minites. The access code to LOOP network would be 0883. Subscribers would pay for the services they had used over the month without initial taxation. According to the Telekom Austria financial report for 2005, the average monthly minute usage by Mobiltel contract subscribers was 30. LOOP subscribers would pay a minimum monthly subscription of 15 levs. Mobiltel estimates that the new product has a potential uptake of one million subscribers.

« Top

« Back

 


 
Published by 
Newnations (a not-for-profit company)
PO Box 12 Monmouth 
United Kingdom NP25 3UW 
Fax: UK +44 (0)1600 890774
enquiries@newnations.com