Books on Bulgaria
% of GDP
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
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
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
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
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
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.
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.
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
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,"
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
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.
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
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.
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.