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Books on Bulgaria
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Update No: 118 - (29/03/07)
Bulgaria became a member of the EU as of January. This means
it is now operating in a tripolar world, with Russia and the FSU as a whole on
the one hand and the US on the other as the two other poles.
Turkey and the Middle East are also important, but not as much as the three
giants in question.
Efficient use of EU funds
It has already established procedures and mechanisms for the efficient
utilisation of EU funds, Prime Minister Sergei Stanishev has told members of
Parliament.
In 2006 Bulgaria accepted a law for financial management and control of the
public sector and a law for internal audit, Stanishev said. These regulations
also aided the distribution of EU funds.
Another positive step was the setting up of controlling institutions in various
offices, responsible for EU fund utilisation, Stanishev said as quoted by the
Bulgarian National Radio.
Bulgarian National Audit Office will also exercise control.
Stanishev listed some of the measures to be used for controlled fund
distribution. Institutions will be given the chance to report any violations or
suspicions of fund misuse. Additional practices will be introduced to increase
transparency and efficiency.
All institutions and measures were created following EU recommendations,
Stanishev said.
Three Nations Finalize Oil Pipeline Deal
Meanwhile the business of government goes on. Bulgaria is keen to maintain close
ties with Russia and Central Asia, not least for their energy supplies.
Bulgaria, Greece and Russia have signed an agreement finalizing the details for
the construction of a long-awaited oil pipeline that will funnel Russian oil
directly to southeastern Europe - bypassing Turkey's busy Bosphorus Straits.
No immediate details were announced about the cost of the privately funded
project, in which a 175-mile pipeline will be built, but experts had estimated
it at between US$1 billion and US$1.3 billion.
The pipeline will bring Russian oil from Bulgaria's Black Sea port of Burgas to
Alexandroupolis in northeastern Greece, bypassing the environmentally vulnerable
Bosphorus Straits. Russia is expected to have a 51 per cent share in the deal,
with Bulgaria and Greece splitting the remaining 49 per cent.
In discussion since the early 1990s, the venture received new interest because
of high oil prices.
Andrei Dementiev, Russian Deputy Minister of Industry and Energy, said the
signing was an important step to compensate for time that has been wasted so
far.
The agreement must be approved by the three governments, said Bulgarian Deputy
Minister of Regional Development Kalin Rogachev, who signed the agreement on
Wednesday. "The project puts Bulgaria on the world energy map," he
said.
The Burgas-Alexandroupolis pipeline, tentatively scheduled for completion by
2010, would initially carry 700,000 barrels of oil a day port through a 36-inch
pipeline, with capacity set to eventually rise to more than 1 million barrels a
day.
Russia's Gazprom-Neft and Rosneft are to participate in the venture, along with
Russian-British venture TNK-BP, Bulgargaz and Terminal Universal Burgas from
Bulgaria, and Greek companies Hellenic Petroleum and Thraki.
Last September, Russian President Vladimir Putin, Greek Prime Minister Costas
Karamanlis and Bulgarian President, Georgi Parvanov, met in Athens to pledge
political support for the project. Putin last week again urged faster progress.
In Athens, Greek Development Minister, Dimitris Sioufas, stressed the pipeline's
"important and positive economic impact on the wider region."
"The project enhances the geostrategic position of Greece and Bulgaria and
gives them an important role in serving the Mediterranean and European
markets," Sioufas said.
It remained unclear whether the agreement would resolve a dispute between Sofia
and Moscow over ownership of the Burgas oil terminal. Opposition lawmakers in
Bulgaria argue the deal should be scrapped if Russian companies are granted
control.
Burgas-Alexandroupolis could compete with another planned pipeline venture.
Macedonia, Albania and Bulgaria have agreed to build an east-west pipeline from
Burgas to the Albanian port of Vlore. The 556-mile pipeline is also due to be
completed in 2010, costing an estimated US$1.2 billion.
Bulgaria is becoming a hub of the EU energy system:-
New energy horizons for Europe
The European Commission welcomed an intergovernmental agreement to construct
a Trans-Balkan pipeline that will be built on EU territory, bypassing the
crowded Bosporus Straits. "It is going to alleviate the pressure on a very
environmentally-sensitive area and it is going to increase the security of
supply by providing an alternative route for the transit of oil. So, however you
look at it, it's positive," Ferran Tarradellas Espuny, spokesman for Energy
Commissioner Andris Piebalgs, told New Europe from Brussels on March 16th.
A day earlier, at the Presidential Mansion in Athens, Russia, Greece, and
Bulgaria in excellent ambience signed an agreement on the construction and
operation of the Bourgas-Alexandroupolis pipeline. Russian President Vladimir
Putin, Greek Prime Minister Costas Karamanlis, and Bulgarian Prime Minister
Sergei Stanishev attended the signing ceremony, marking a new era for the
transport of Russian and Caspian crude to Europe.
Signing the agreement on behalf of the three countries were Greek Development
Minister Dimitris Sioufas, Russia's Industry and Energy Minister Viktor
Khristenko and Bulgarian Regional Development Minister Asen Gagaouzov.
The Greek premier, in full command of the signing ceremonies, told a
well-attended press conference this "historic day" is the result of
intensive preparation leading to the implementation of this strategic project.
"This has been a pending issue for 14 years and it is now being managed in
the best possible way for the benefit of all," said Karamanlis, who helped
overcome last minute obstacles in negotiations.
He pledged that Greece will continue to work on the pipeline at the same intense
pace in order to make up for lost ground and complete the work as quickly as
possible.
Karamanlis said this project will place Greece and Bulgaria on the energy map.
"Apart from individual benefits for individual countries this is a wider
issue and a wider project that will be beneficial for the global energy market
since it facilitates access to oil and products that are important products.
"Putin defined the project's significance for energy security, noting that
the Trans-Balkan pipeline will provide an opportunity to think about expanding
supplies from the Caspian region through Russian territory.
"We are all equally interested in making this project happen. Bulgaria,
Greece and Russia are equally interested in the construction of this pipeline,
but, of course, as my colleague - the prime minister of Greece - said this is a
project that is interesting for all the energy markets globally because the
implementation of this project also provides a scope for further considerations
on how oil will be brought further from the Caspian Sea," Putin said in
response to questions. "It will be very interesting for US companies, Azeri
companies or Kazak companies. This will also increase energy supplies for the
global market.
"In turn, Stanishev said the pipeline is of geo-strategic significance and
will play an important role in strengthening energy security. "This is a
new beginning of an era to come which should lead to great infrastructure works
and projects which should play a very important role not only in Greece but
rather in Europe.
"It's notable that the Russian president stressed that the pipeline will be
filled with new volumes of oil, which will be transported through Russia among
others.
Assessing the Russian president's statements, the EU energy spokesman welcomed
the possibility of using Kazakh and Azeri oil for the pipeline. "That's
perfect. That's reasonable because from a commercial point of view the more
people you have using the pipeline, the more money you are going to get. So it
will be risky to say they cannot use Kazak or Azeri oil, if they don't have
enough oil to fill it," Tarradellas Espuny told New Europe.
The agreement to build the Bourgas-Alexandroupolis pipeline could also have a
positive effect for another project, the Chevron-led Caspian Pipeline Consortium
(CPC) -- operating the pipeline running from the Chevron-led Tengiz field in
Kazakhstan to the Black Sea.
The CPC partners - Kazakhstan and Chevron - have been asking for Russia's
permission to double the size of CPC capacity. "Russia has blocked that
pipeline's capacity expansion until the Bosphorus pipeline is agreed because
otherwise that oil from the Caspian would be competing with Russian oil trying
to get out of the Bosporus," Chris Weafer, chief strategist at Moscow's
Alfa Bank told New Europe. Speaking telephonically from Washington DC, he said,
"Russia has been telling Chevron: 'If you want permission for the doubling
of the pipeline you have to lean on the US State Department to put pressure on
Greece and Bulgaria to agree on the pipeline.'
"Washington, which backed a competing Trans-Balkan pipeline -- the
Burgas-Vlore oil pipeline project - has eased its reservations about
Bourgas-Alexandroupolis, realising that a bypass of the crowded Bosphorus
Straits, where tankers sometimes have to wait inline for 10 days, was long
overdue.
Just a few days before Russia, Greece and Bulgaria signed the agreement for the
construction of the Bourgas-Alexandroupolis pipeline, US Deputy Secretary of
State Matt Bryza, who visited Turkey and Greece, said Greece and Bulgaria are
US' allies in NATO and American companies are interested in the pipeline, so
Washington does not oppose the pipeline.
Asked if American companies would participate in constructing the Bulgarian
portion of the pipeline, the Bulgarian development minister told journalists in
Athens it would be decided by the time construction is set to begin. He noted,
however, that transit fees would be collected by Bulgaria.
Meanwhile, Bryza has urged diversity and multiple means of transport of
hydrocarbons. The US opposes Russia's proposal to participate in the
Turkish-Greek-Italian pipeline deal, which will transport natural gas from the
Caspian region and the Middle East to Europe. Putin's visit to Greece followed
his trip to Italy where Russian gas giant Gazprom and Italy's ENI finalised the
details of a major gas deal.
Politicians, company executives and analysts alike believe the
Bourgas-Alexandroupolis pipeline is ready to move forward. Transneft CEO Semyon
Vainshtok told journalists in Athens that Russia, Greece and Bulgaria will form
an international company and register its head office. According to the
intergovernmental agreement, the international company will be registered in a
European Union member state. A tender will then be held to conduct a survey and
a feasibility study, and construction will start after it has been completed.
This will all be done "within a very short time, in less than a year or
two," Vainshtok said. Asked if everything will go well, Vainshtok said he
is certain since Russian oil will be flowing through the pipeline.
Commenting on the agreement, Alfa Bank's Weafer said: "Everybody believes
it's a done deal. In terms of the political decision to do it, I don't see any
further obstacles. It looks like all parties have finally agreed ... Even the US
now wants it done."
U.S., Bulgaria in joint aviation training
If Sofia is looking eastwards for energy, it is looking westwards for its
military ally. From March 19 to 30 Bezmer aviation base hosted joint training of
Bulgarian and U.S. air forces, the latest result of its year-long alliance with
Washington.
The aviation training took place under the name Thracian Spring 07. U.S. medical
personnel, the 37th Airlift Squadron and members of the Bulgarian Air Force took
part in the humanitarian relief training.
Participants in Thracian Spring 07 were to be trained according to NATO
transport aviation procedures. The training was to make use of simulations and
participants to be instructed how to act in conditions of serious incidents and
natural disasters.
Bulgaria's Foreign Minister Ivaylo Kalfin and Secretary of State Condoleezza
Rice signed in April last year the agreement for the location of U.S. military
bases on the territory of the Black Sea country.
Under the agreement the U.S. will be able to use three Bulgarian military bases
- the Novo Selo range and the Bezmer both near Bulgaria's border with Turkey,
and the Graf Ignatievo airfield in central Bulgaria. US forces will also use a
storage facility near Bulgaria's port of Burgas.
The agreement, which will be valid for 10 years, provides mechanisms for
bilateral consultations over the actions of the US forces in Bulgaria.
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AVIATION
Fraport to invest 10m in airports in Varna, Bourgas
In 2007, Fraport Twin Star Airport Management AD will invest 10 million Euro
each in the two airports in the Black Sea cities of Varna and Bourgas, Andreas
Helfer, executive director of the company who won the concessions on the two
facilities, said a meeting, Sofia News Agency reported.
Work is going on for the completion of Terminal 5 of the Varna Airport.
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CREDIT RATINGS
Moody's raises bond rating outlook from stable to positive
Moody's Investors Service said it has raised the outlook on the Government of
Bulgaria's Baa3 long-term foreign and local currency bond ratings to positive
from stable, a press release from the agency reported.
The alterations in outlook was due to the government's strong fiscal position,
robust economic growth and expected Euro zone membership. Economic growth has
been robust and macroeconomic volatility has declined. The outlooks on
Bulgaria's A1 foreign currency bond ceiling, Baa3 foreign currency deposit
ceiling and Baa1 local currency deposit ceiling were also changed to positive
from stable. The change did not affect Bulgaria's local currency bond ceiling,
which is Aa3.
Citing Bulgarian government's budget surplus of 3.7 per cent of GDP in 2006,
Kenneth Orchard, Moody's lead analyst for Bulgaria said that this is the largest
surplus of any European Union member country and indicates that the government
strongly follows a prudent fiscal policy.
The ratio of government debt to GDP has declined dramatically from 66 per cent
in 2001 to about 24 per cent today. "Risk is further diminished by the
improved currency and maturity structure of the government's debt, combined with
a substantial fiscal reserve account that could be tapped in a period of
stress," Orchard added. In Moody''s view, high rates of investment should
allow the economy to continue to grow at the current trend over the medium term.
Bulgaria is expected to join the Euro zone eventually. "Bulgaria currently
meets the deficit, debt and interest rate Maastricht criteria for Euro adoption
but does not meet the inflation criterion," said Orchard.
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ENERGY
Russia, Greece, Bulgaria endorse pipeline agreement
Russia, Greece and Bulgaria endorsed the Bourgas-Alexandroupolis oil pipeline
agreement in the Bulgarian coastal city of Bourgas. Russian Deputy Industry and
Economy Minister Andrey Dementiev, Greek Secretary General of the Development
Ministry Nikos Stefanou and Bulgarian Deputy Regional Development Minister Kalin
Rogachev signed the document, Focus news agency reported.
The pipeline project would strengthen Bulgaria's positions on the European
energy market, Rogachev said.
Stefanou said the project is an alternative way of the Bosporus Straight for
transportation of oil from Russia and the Black Sea to EU countries. The route
is safe and offers opportunities for high economic effectiveness.
The agreement between the three governments will be signed in Athens after which
an international project company will have to be set up.
Construction works will start in the beginning of 2008 and have to finish within
shortest terms, Stefanou said.
One of the participants in the project - Russian oil company Rosneft - said the
agreement might be signed in February, but a source in a related Russian
department said he doubted that this would be possible, Interfax reported.
The 285-kilometre-long pipeline could initially carry 35 million tonnes of oil
annually, but its handling capacity could be later increased to 50 million
tonnes. The project is valued at some US$900 million.
Russian President Vladimir Putin said at a press conference two weeks ago the
Russian side has made the necessary proposals for the project, all that remains
is for them to be agreed by Greece and Bulgaria.
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FOREIGN COOPERATION
Greece to expand cooperation with Bulgaria
Greek Parliament Speaker, Anna Benaki-Psarouda, recently said that Greece will
boost its comprehensive cooperation with Bulgaria, after meeting with her
Bulgarian counterpart, Georgi Pirinski, in Bulgaria, Sofia News Agency reported.
She added that cooperation would focus on safeguarding regional peace and
stability, boosting trade and promoting personnel exchanges. She hoped that
Greece, Bulgaria and Romania would form a regional axis to implement the policy
of the EU and spread their experience to their neighbouring countries.
Bilateral cooperation discussed with Slovakia
Bulgaria`s Interior Minister, Roumen Petkov, and his visiting Slovak
counterpart, Robert Kalina, recently discussed the signing of a new cooperation
agreement and ways to step up cooperation, Sofia News Agency reported.
After the meeting, Petkov said that the two countries have similar problems in
home affairs. The two discussed the fulfilment of the Schengen Criteria and the
possible introduction of new identity documents - passports and driving licences
- with biometric data. Kalinak said cooperation with Bulgaria is very important
for this country.
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FOREIGN ECONOMIC RELATIONS
India, Bulgaria to expand economic relations
Vice-President of the Bulgarian Chamber of Commerce and Industry (BCCI), Tsvetan
Simeonov, recently participated in a presentation of Indian economy and
opportunities for trade and economic cooperation between Bulgaria and India. At
the meeting, Simeonov said that Bulgaria and India could expand their economic
cooperation through exchange of technologies, know-how and establishment of
joint companies, Sofia News Agency said.
In turn, Indian Ambassador to Bulgaria, Lal Miller Dingliana, said that Indian
firms are interested in cooperation with Bulgarian alcohol producers and
particularly wine producers. India's middle class, one of the main wine
consumers, totalled 300 million people, Dingliana said. The exchange of goods
between the two countries in 2006 amounted to 75 million Euro, it was reported.
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FOREIGN INVESTMENT
5,500m Euro to be invested in infrastructure
According to a national strategy for integrated development of infrastructure in
2006-2015, a total of 5,500 million Euro will be invested in infrastructure
projects by the end of the government's term in 2009, Bulgarian Regional
Development and Public Works Minister Asen Gagaouzov announced during the
conference, "Infrastructure Projects, Bulgaria 2007: State and
Prospects," Sofia News Agency reported.
Addressing the participants at the conference, Gagaouzov said that the
construction sector generated over six percent of Bulgaria's GDP in 2006,
according to preliminary figures. A total of 1,626 kilometres of roads, worth
over 450 million Euro, were built or rehabilitated last year. The Trakia and
Maritsa motorways will be completed by 2009, while the Lyulin motorway will be
completed within three years. Concession-awarding procedures will be launched
for the Hemus and Black Sea motorways.
In 2007-2010, 153 kilometres of roads will be rehabilitated or newly built with
a loan from the European Investment Bank under the Transit Roads 5 Project. Over
600 million levs has been allocated for second and third-class roads under the
Regional Development Operational Programme. As to the Transport Operational
Programme, over 2,000 million Euro has been allocated for infrastructure,
Gagaouzov recalled. The construction industry has yet to attain the standards
for environmental protection and for the quality and safety of the construction
products.
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MINERALS & METALS
Bulgarian unit of Cumerio hikes production
Belgian copper producer Cumerio recently reported that its production of
cathodes at Cumerio Med, the Pirdop, Bulgaria-based smelter, reached 65,000
tonnes in 2006, an eight per cent improvement on the previous year. The
company's annual financial report revealed, however, anodes production was
slightly below last year's level, at 238,500 tonnes. Cumerio said the
maintenance performed at the smelter during the first half of 2006 did not
significantly affect the production of anodes for the year, New Europe reported.
Sales of anodes and cathodes in the Black Sea region increased to 137,000 tonnes.
Cumerio said group recurring EBIT topped 93.8 million Euro in 2006 and is seen
at 70-75 million Euro this year. In February 2006, Cumerio announced a major
investment program for Bulgaria. In view of the current shortfall in refining
capacity, the company said it had decided to build a state-of-the-art copper
refinery with an annual production capacity of 180,000 tons of cathodes. Cumerio
also said it would de-bottleneck the smelter, which would increase its annual
capacity to 275,000 tonnes of copper anodes.
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TOURISM
Tourist boom in Eastern Europe expected
Bulgaria and Romania's accession to the European Union is expected to generate a
boom in tourism around Eastern Europe, especially on the Balkans, reports
leading online holiday company directline-holidays.co.uk.
After the two countries joined the Union, experts envisage that Bulgaria is
bracing itself for a 10 per cent rise in foreign tourists during 2007 as a total
of 5.6 million are expected to visit, Sofia News Agency reported.
Joining the EU increases the visibility of a country as a tourist destination.
Bulgaria's EU membership has made it more popular as a travel destination. In
fact, Bulgaria boosted tourism in 2006, earning the record breaking amount of
nearly one billion Euro. This has even prompted directline-holidays.co.uk to
hire travel consultants with unique knowledge of Eastern Europe in order to deal
with specific Balkans holiday enquiries. The increase, according to directline-holidays
Sales Manager, Alex Pilkington, points to a bright future for tourism in the
Balkans.
Tourists are realising Balkans holidays offer the best of both worlds: from
sunny beaches to world class ski resorts. They are also among the countries
offering the lowest prices for package tours. With an increasing number of
Britons choosing activity holidays and most of them turning to the mountain
slopes, a boom in Bulgaria skiing holidays has followed, with direct-line
skiing.
Budget airlines have also attracted tourism to Eastern Europe with no-frills air
carriers increasing the number of flights they offer, whilst competition is
expected to bring prices down further. One of the reasons for more flight
options is that after EU entry, aviation companies no longer need government
permission to secure landing rights.
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