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Books on Bulgaria
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Update No: 121 - (27/06/07)
Cleaving to the US, not Russia
From being the staunchest pro-Moscow member of the Warsaw Pact, Bulgaria is now
becoming a pro-US hawk in NATO. It has allowed the establishment of three US
bases on its territory. Those with memories of the Red Army must find it all
very strange.
It was after all Russia that secured Bulgaria's independence from the Ottomans
in 1878, after the appalling massacres of 1877-78, that enraged Gladstone, who
made a political comeback out of it. It was the USSR that liberated it in
1944-45 from the Nazis, only to impose another totalitarian system in their
place. There's the rub.
The crowning moment of the new rapprochement with Washington came with Bush's
visit to Bulgaria on June 10-11, a first by a US president. This must have had
some oldster bystanders staring in disbelief.
Bulgaria expects the U.S. anti-missile defense system to cover all NATO
states
The main topic on the agenda had been already mentioned beforehand by the number
two in the Bulgarian government, a likely future premier and a powerhouse on
foreign policy. NATO should consider extending the US anti-missile defence
system to cover all NATO member states, Bulgarian Vice Premier and Foreign
Minister Ivailo Kalfin said on June 7th. Under the principle of "the
indivisibility of security" of the territory of NATO countries, Bulgaria
expects NATO to further discuss the system with the United States and have it
cover all NATO members, not just Poland and the Czech Republic, the BTA news
agency quoted Kaflin as saying. NATO subsequently have not demurred at the US
proposals
Kalfin also denied that as yet the three US military bases set up in Bulgaria
were involved in the anti-missile defence system.
The United States plans to place a radar base in the Czech Republic and 10
interceptor missiles in neighbouring Poland as part of a planned global missile
defence shield. Russia has voiced strong opposition over the deployment.
Nevertheless, NATO officials said the system is not able to protect the
southeastern Europe, which is too close to Iran.
Bulgaria willing to advocate Balkan region's interests-Purvanov
Bulgaria has the ambition of advocating the interests of the Balkan
countries and the European Union region, Bulgarian President Georgi Purvanov has
said.
Purvanov took part in an international conference on Southeastern Europe and EU,
taking place in Montenegro's coastal town of Becici, Focus news agency reported.
The construction of a modern transport and communication network and energy
infrastructure in the region was needed, Purvanov said.
Montenegro's president Filip Vujanovic, Albanian president Alfred Moisiu, Bosnia
and Herzegovina's Nebojsa Radmanovic, Macedonian president Branko Crvenkovski
took part in the forum.
Purvanov told conference participants that despite its new status after the EU
accession, Bulgaria would continue defending the interests of the region. He
said that the need for modern infrastructure in the region received no attention
during previous forums, but it was of key significance for the region.
EC lacks any reason to impose safeguard clause on Bulgaria- Kalfin
The European Union (EU) is having second thoughts about the wisdom of
allowing Bulgaria and Romania to enter so rapidly before reform was further
advanced. It is much more difficult to lay down conditions retrospectively.
Foreign Minister Kalfin, however, claims the European Commission (EC) lacks any
reason to impose a safeguard clause on Bulgaria. Bulgaria faces sanctions
because of its inefficient fight against organised crime and corruption. The
foreign minister is disingenuous to say the least; everyone knows the truth.
The EC is expected to present its report soon on the reform progress in Bulgaria
and Romania. Six areas in Bulgaria came under monitoring because of the slow
pace of change.
Kalfin said that positive evaluation was expected and some of the areas under
monitoring could be left out.
Recently European justice commissioner Franco Frattini said that the EC would
try to refrain from sanctioning Bulgaria. It was best for the commission to aid
the country in speeding up reforms instead of introducing a safeguard clause, he
said. But the 'softly-softly' approach rarely works.
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BANKING
UniCredit says economy will remain strong in 2007
Italian banking group UniCredit believes Bulgaria's economy will continue
growing strongly in 2007, but with limited progress in slowing down inflation,
Sofia news agency reported.
The marked drop in inflation from the beginning of the year, however, is
unlikely to be long-lived and end-year inflation is forecast at 5.1 per cent,
versus 6.5 per cent in 2006, it was reported. Buoyant individual consumption and
strong investment activity, largely financed by FDI, are the main drivers of
growth for the two newest EU member-countries Bulgaria and Romania, the latest
CEE Quarterly report of UniCredit New Europe Research Network concluded.
UniCredit Group economists expect 6.2 per cent real gross domestic product (GDP)
growth in 2007, compared to last year's 6.1 per cent for Bulgaria, as well as
about a 13 per cent increase in GDP per capita to 3690 Euro by the end of 2007.
Without wage hikes, UniCredit forecasts a slight drop in the current account
deficit to 15.5 per cent of GDP. Strong economic growth with good corporate
profitability and rising household income and consumption, yet some remaining
gaps of fiscal penetration in the region, suggest a positive outlook in terms of
banking sector development in 2007, the UniCredit CEE report said.
The EU entry adds to the appeal of Bulgaria, which already offers low production
expenditure, according to the report. At the same time, the access to EU funds
will also play a role. Yet, the utilisation capacity of Bulgaria and Romania is
expected to remain low in the first years after their accession, it was
reported. Opportunities to take down the current account deficit in 2007 also
remain limited. Higher natural gas expenditures and a change in the structure of
the used energy sources after the closure of Kozloduy nuclear power plant units
will exercise pressure over imports.
Improvements are expected in 2008, when the country's production capability will
go up, it was reported. The report also cautioned Bulgaria against removing
restrictions on wage hikes in the state sector, which the cabinet recently
lifted. "The risks for macroeconomic stability will run high as a sudden
increase in incomes in the public sector has the potential to undermine
competitiveness and unleash uncontrolled pressure on fiscal spending," the
report read. UniCredit forecasts a retail lending growth of 33.2 percent
year-on-year in 2007 for the region, with volumes increasing from 258 billion
Euro at the end of 2006 to 344 billion Euro at the end of 2007 for the whole
CEE-17.
Corporate lending is likely to also benefit from the very positive macroeconomic
outlook, despite relatively tight monetary policies and companies' direct access
to alternative forms of financing. UniCredit Group economists forecast 20.4
percent corporate lending growth in 2007, with total volumes rising from 426
billion Euro in 2006 to 513 billion Euro in 2007. Overall, total bank lending in
the region will expand by 24.4 per cent to 921 billion Euro at the end of 2007.
Strong growth is expected also on the deposit side, based on sound corporate
profitability and moderate increase in households' income, despite increasing
investment in real estate and more focus on diversification of the savings
portfolio. UniCredit Group forecasts at the regional level 16.2 per cent
year-on-year growth in retail deposits to 512.6 billion Euro at the end of 2007
and 19.3 year-on-year growth in corporate deposits to 317.5 billion Euro.
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ENERGY
Bulgaria ratifies Bourgas-Alexandroupolis agreement
The Bulgarian parliament on May 30th ratified a 280-kilometre, US$1.211-billion
pipeline deal with Russia and Greece to link terminals in the Black Sea and the
Aegean. Ratification of the agreement by the Russian Duma was expected to take
place in the near future, while the Greek Parliament has already ratified the
agreement, New Europe reported.
Representatives of the three countries will soon be meeting in order to set up
the international company that will construct and operate the pipeline. The
project between Bourgas in Bulgaria and Alexandroupolis in northeastern Greece
would be completed in 2011 with an initial annual capacity of 35 million tonnes,
with a potential for 50 million. It would bypass the congested tanker route
through the Bosporus and bring mostly Caspian fields oil shipped from the
Russian terminal at Novorossiisk to the terminal in the Mediterranean. According
to the three-way agreement initialled in March, Russia would control 51 per cent
of the pipeline operator, with Bulgaria and Greece equally splitting the rest.
The construction, including the 166-kilometres stretch through southeastern
Bulgaria, is scheduled to start this year. The transit fees would be negotiated
at a later date.
BTC Mobile, Intracom Bulgaria ink 3 agreements
JSC Sitronics (Sitronics), a leading provider of telecommunications, IT and
microelectronic solutions in Russia and the CIS with a growing presence in other
EEMEA emerging markets, recently announced that Intracom Bulgaria S.A., a
provider of information and communications technology services in Bulgaria, has
signed three framework agreements with Bulgarian Telecommunication Company
Mobile S.A. (BTC Mobile), a Bulgarian mobile operator, Sofia news agency
reported.
Intracom Bulgaria S.A. is a part of Intracom telecom, which is a subsidiary of
Sitronics.
Within the framework of the agreements, Intracom Bulgaria will supply
telecommunications infrastructure design and installation services, and provide
shelter equipment to BTC Mobile, it was reported. The total value of the
contracts is 13.6 million Euro. The projects are expected to be implemented over
the next two years. Founded in June 2004, BTC Mobile operates under the trade
mark "Vivatel" and provides GSM and next generation telecommunication
services to 700,000 subscribers in Bulgaria.
BTC Mobile has had contracts for network sharing with the two leading Bulgarian
mobile networks, MOBILTEL (MTel) and Cosmo Bulgaria Mobile (GLOBUL), since 2005.
Alexander Lutsenko, SITRONICS chief of strategy, was quoted by the news agency
as saying: "We are pleased to announce the deal with BTC Mobile, which is
one of the most dynamic mobile operators in Bulgaria. These agreements will
allow us to provide a wide range of telecommunications solutions to one of the
key players in this market, thus broadening our portfolio of projects and
strengthening our presence in one of our high priority regions."
Sitronics is a former Scientific Centre Concern as the largest scientific
complex in the microelectronics sector. It covers the Czechia-based Sitronics
TS, NIIME, Greece-based Intracom Telecom, Micron, VZPP Micron, Kvant, Kvazar
Micro, Elax, Elion.
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