Books on Bulgaria
% of GDP
Update No: 094 - (24/02/05)
European leaders in Sofia launch initiative to fight discrimination of
Leaders from Central and Eastern Europe launched in Sofia on February 2nd the
Decade of Roma Inclusion - an international initiative to improve the status of
Roma, Europe's most vulnerable minority. The moving commemoration of the 60th
anniversary of the liberation of Auschwitz and the Nazi death camps on January
24th did not emphasise sufficiently that two million Roma perished in the
Holocaust as well as six million Jews. Unlike the Jews there is no Israel for
them to go to.
It shows the vision of Prime minister Simeon Saxe-Coburg Gotha of Bulgaria that
he should have decided to host the conference, and also that he is a
compassionate man, as befits a former monarch, for whom the principle of
noblesse oblige is paramount. Prime ministers Ferenc Gyurcsany of Hungary, Ivo
Sanander of Croatia, Vlado Buckovski of Macedonia and Vojslav Kostunica of
Serbia and deputy prime ministers Pavel Nemec of the Czech Republic, Marco Bela
of Romania and Pal Czaky of Slovakia signed a joint declaration stating their
commitment to improve the living standards and the social position of Roma.
"We solemnly declare that our governments will work for ending
discrimination and bridging the unacceptable gap between Roma and the other
parts of society," the document said. Participants in the meeting included
also World Bank President James Wolfensohn and Open Society Institute (OSI)
Chairman, Hungarian-born U.S. financier George Soros. OSI and the World Bank are
the two principal sponsoring organizations of the initiative.
The Decade of Roma Inclusion represents the first cooperative international
effort to change the lives of Roma, many of whom live in dire poverty in the
heart of Europe. Bulgaria, Croatia, the Czech Republic, Hungary, Macedonia,
Romania, Serbia and Montenegro, and Slovakia are the founding countries of the
Decade, which will span 2005-2015.
"It is one of the great moral issues facing Europe today," said World
Bank President James D. Wolfensohn. "If we do nothing, we will see
continued disaffection and suffering. If we succeed, the Decade offers an
opportunity to turn the tide of history and harness the political will to
include the Roma as full citizens in European societies," he added.
To accelerate social inclusion and improve the economic status of Roma, each
country will set goals for improvements in four identified priority
areas-education, employment, health, and housing. The Decade will also provide a
follow-up framework to monitor progress in ending discrimination and poverty
faced by Roma communities in the region.
"The basic principles of humanism and democracy are violated when large
groups are lagging behind in their social integration," Saxe-Coburg said.
"Every citizen must have a chance for better life regardless of his or her
religious or ethnic group. National minorities are the riches of our country and
we struggle to reaffirm their status in accord with the international
standards," Sanander said.
"The communist regime didn't recognize differences and ghettoes it
established are at the core of Roma's problems of today," Nemec said.
"The Decade signals a sea change in Roma policy," said Soros.
"But it is just the beginning. Problems will not be solved overnight and we
must be prepared to fight social exclusion and discrimination over the course of
The Decade planning is guided by an International Steering Committee, made up of
representatives of governments, Roma from each country, and international
organizations. It is owned by the governments that signed on to it. Funding of
the Decade action plans involves the reallocation of existing resources in
national budgets and aligning these plans with funding instruments of
multinational, international, and bilateral donors.
In addition to the governments of the participating countries, the World Bank,
and the Open Society Institute, the Decade of Roma Inclusion is supported by the
European Commission, the United Nations Development Program, the Organization
for Security and Cooperation in Europe, the Council of Europe, the Council of
Europe Development Bank, and most importantly, Romani leadership.
Bulgaria is facing parliamentary elections in the summer of 2005, the expiry of
the term of office of the current government. With several months still to go,
the Bulgarian Socialist Party (BSP), the successor to the communists, continues
to hold the lead in the public opinion polls, in spite of rather tumultuous
events in 2004.
According to a poll in December 2004 by the MBMD polling agency, had the
elections been held in the beginning of that month, the BSP would have got 23%
of the votes.
For all Premier Simeon's sterling qualities, he has not been able to deliver on
his promise four years ago to double living standards. It was a rash promise to
make. He is almost certain to lose.
But history is likely to be kinder to him than his own people if his initiative
on the Roma leads to their living standards being decidedly improved over the
coming years as a result.
New Year bombshell
The former communists, nevertheless, face a problem or two. Major
controversy erupted around the BSP in January 2004, after a report in the Iraqi
daily Al-Mada, according to which the BSP had in 1998 received 12 million
barrels of petrol as a "gift" from the regime of Saddam Hussein.
According to the report, about 200 individuals, companies, political
organisations and religious organisations in 50 countries that year received
from Hussein various quantities of petrol as a gift under the UN food-for-oil
Opposite the name of Bulgaria appeared the BSP and a Bulgarian-Iraqi company,
IraqBul, which allegedly received two million barrels of petrol.
Purvanov in repudiation
President Purvanov, who was BSP leader at the time when this allegedly
happened, described the Al-Mada report as "ill-advised black humour",
ordered the National Security Service (NSS) and the National Intelligence
Service (NIS) to hold an inquiry, and rejected all allegations.
Current BSP leader Sergei Stanishev also rejected the allegations. Several days
after the first report, it turned out that businessmen close to the BSP had
indeed dealt with Iraqi petrol under the UN oil-for-food programme.
In an interview with the bTV national channel, Zahari Zahariev, a member of the
BSP Supreme Council (SC), admitted that he was an intermediary in a deal under
the UN oil-for-food programme between Iraq and a Bulgarian company,
Machinoexport, controlled by Dimitar Mandjukov, widely seen as close to the BSP.
Mandjukov is the publisher of the party newspaper, Duma. He is also a weapons
dealer, owns the BBT cable television channel, has interests in the
telecommunications sector and has been awarded by President Purvanov the Stara
Planina order for his contributions to journalism in Bulgaria.
But Mandjukov said that he had made only a little profit from the sale of the
one million barrels of petrol and had not used it to sponsor the BSP. Mandjukov
said he would sue anyone who tried to say anything negative about his companies.
It remains to be seen if such threats will deflect enquiries into his affairs.
Both Mandjukov and Zahariev denied having involved the name of the BSP in the
deal or having negotiated with Iraq outside the UN programme.
The controversy led to the setting up of a parliamentary committee in February,
which started its own inquiry into the Al-Mada allegations. On several occasions
the committee, whose original two-month term has been extended on more than one
occasion and it is still in existence, has tried to summon Purvanov. So far it
has not succeeded. It may be assumed that it will emerge who were the
beneficiaries of Saddam Hussein's largesse.
In the heat of the Iraqi oil controversy, the BSP tried to shift negative public
attention from itself by pushing for early elections and solemn vows to rid
itself of members "who stick their fingers in the honey" but at the
same time, party leader Stanishev refused to dismiss SC member Zahariev from his
In the beginning of March, 2004 the BSP tabled in Parliament a vote of no
confidence on the basis of the Government's "social irresponsibility".
Deputy leader Rumen Ovcharov identified as evidence of the
'irresponsibility" of the Government its income policies, problems within
the education system and with health care, the sale of the Bulgarian
Bulgarian Opposition Removes Parliament Speaker
The left-wing and right-wing opposition parties on February 4th succeeded in
removing Ognyan Gerdzhikov as parliament speaker, because he refused to schedule
a debate on a failed privatisation deal earlier in the week. In all, 119
deputies voted to remove him, while 114 supported him. There was one abstention.
The wrangling began when British American Tobacco pulled out of a deal to buy
three cigarette factories from the government. Gerdzhikov refused to summon the
assembly to an extraordinary session requested by opposition lawmakers.
Following his ousting as speaker, the law professor said he would resign from
parliament completely. Fallout from the failed privatisation bid continues.
Sofia airport to secure new runaway by October 31st
The deadline for the construction of a new runway system at Sofia airport has
been extended by seven months until October 31st 2005, the airport's Executive
Director, Stoil Pashkunov, said, Bulgarian News Agency reported.
Construction has been delayed partly due to a large dumping site which the
project contractor did not know was in the area of the future runways. It took a
month to dig out the waste and fill the pit with dirt, Pashkounov said.
No subsidy was needed to cover the additional expenses, which amounted to
US$500,000. The project was initially scheduled to be completed by April 2nd
this year. The tender for the construction of a new passenger terminal at Sofia
airport remains unchanged, by end-August 2005. Construction work proceeds well,
The foundations have been laid for a bridge over the Iskur River, which will be
part of the adjoining infrastructure.
Some two million levs has been allocated for landscaping work, which will be
carried out by 2006. A total of 92 hectares of land, owned by 400 persons, has
been earmarked for the purposes of the project. The process has involved 120
lawsuits. Three houses remain in the area, and alienation negotiations are still
under way for one of them. The new airport is expected to handle two million
Sofia airport's before-tax profit in 2004 is estimated at 15m levs (10.5m Euro),
up from 13.6m levs in 2003, the executive director said. Last year the airport
handled 28,700 airplanes (compared with 25,800 in 2003), 1,615,000 passengers
(300,000 more than in 2003) and 14,400 tonnes of cargo (compared with 13,700
tonnes in 2003).
The airport's main runway was upgraded to a higher class on January 17th, which
means it will handle aircraft in lower visibility conditions.
DZI interested in Macedonian acquisitions
Bulgarian financial group DZI is reportedly holding talks for acquiring 3
Macedonian banks and the largest Macedonian insurer QBE, New Europe reported
The reports indicate that talks were held with Macedonia's 5th largest bank
Ohridska Banka as well as with the lenders Rado Banka and Makedonska Banka. The
Bulgarian group also held initial consultations with QBE, which was privatised
in 1998 and presently holds more than 50% of the car and general insurance
markets in Macedonia. In Bulgaria the financial group DZI is comprised of a
commercial bank (the country's 10th largest), a general insurance company, a
life insurance company (both insurers rank second in their segments) and a
pension fund. The interest of DZI in acquisitions in Macedonia was confirmed by
the CEO of DZI Bank who said that the aim of the financial groups is to acquire
Austrian EVN buys power firms
Austrian power giant EVN AG completed the acquisition of a 67% stake in the
southeast network of Bulgarian power distribution companies, the state sale body
announced recently, Sofia News Agency reported.
The Austrian company also declared an interest in the sale of three thermal
power plants of Bulgaria: Bobov Dol, Varna and Russe heating utility companies.
EVN AG won the public tender on July 15th with a bid of 271.7m Euro for the
acquisition of the two power utilities in the south-southeast cities of Stara
Zagora and Plovdiv. It outbid Czech electricity utility CEZ AS (BAACEZ.PR),
Germany's E.ON Energie AG, Greece's Public Power Corporation SA (PPC.AT) and
Bulgaria to build merchant vessels for Chile
At a recent business meeting in Santiago, Bulgarian Deputy prime Minister and
Minister of Economy, Lydia Shuleva, stated that Chile has expressed interest in
constructing merchant vessels in Bulgaria, Standart reported.
Currently, Chile needs to boost the strength of their merchant fleet due to
rising commodity turnover with China. The vessels are supposed to be
commissioned to the Varna-based shipyard. Chilean entrepreneurs are also
interested in the privatisation of Navigation Maritime Bulgare, which is a
state-owned Bulgarian shipping company and the national flag-carrier Bulgaria
air, as well as in businesses of the military-industrial complex. Businessmen
from Sao Paolo also informed themselves about the terms to bid for the
Navigation Maritime Bulgare.
On January 14th, Shuleva met with Federation of Industries of the State Sao
Paolo (FIESP). Its members asked if Bulgaria would reduce the tax rates in the
wake of its accession to the European Union. Bulgaria's Prime Minister, Simeon
Saxe-Coburg Gotha, said the cabinet was to introduce flat taxes after Bulgaria
becomes a fully-fledged member of the 25-member bloc, expected in 2007.
Brazil also showed an interest in joint projects with Bulgaria in the field of
energy. News of this surfaced after Shuleva held talks with Brazilian Energy and
Mining Minister, Vilma Rouseff, who is of Bulgarian descent. The host expected
Bulgarian offers for production of rails as Brazil is replacing its obsolete
Shuleva supports a Brazil-based company for the import of 50 tonnes of
Bulgaria-made ammonium nitrate. The deal is expected to be finalised in May.
Unofficially, the Bulgarian deputy prime minister said the Bulgarian company in
question was Neochim.
BTC to shrink mobile charges by 20%
Bulgarian Telecommunications Company (BTC), which holds the country's third GSM
operator licence, will announce its mobile services price list just before its
launch, Sofia News Agency reported.
The company has promised to reduce mobile phone charges by at least 20%, giving
its clients high quality services and increasing the network capacity. The
construction of the network is underway and the new owners of previously
state-owned BTC, Viva Ventures, plan to step into the Bulgarian market in April.
Last June Bulgaria sold a 65% stake in BTC to Vienna-registered Viva Ventures
GmbH for 280m Euro. The state competition watchdog recently approved the third
GSM licence awarded to the BTC on June 7th.
BTC was given the licensing document several days later after it remitted the
negotiated fee, amounting to 54.2m levs. The case of issuing a third GSM licence
had been faltering for half a year after rival operators in Bulgaria objected
the non-tendered sale of the licence, which had been negotiated by the
government as part of the BTC privatisation deal.
BTC was also be listed at the Sofia Stock Exchange on February 1st. The initial
price of BTC shares to be traded on the bourse was to be announced no later than
three days prior to the equity listing, Atanas Bangachev, CEO of the sale body
announced in December. Bulgaria will put up for sale a 35% state-owned stake in
the national telecom BTC in exchange of compensatory bills.
Public and private sectors can drive Bulgaria's tourism
Bulgaria's tourism industry can only flourish through a joint effort of the
public and private sectors, according to Bob Miller, Bulgaria's honorary consul
for Nevada and former governor of the state.
Miller and Maxim Behar, CEO of leading Bulgarian public relations company M3
Communications Group, Inc were organisers of the major tourism forum
"Bulgaria - Dream Area," which closed on January 7th.
Miller praised the performance of the government in enhancing the tourism sector
during his meeting with the head of the budget committee, Nina Radeva, who was
elected MP on the ticket of the ruling Simeon II National Movement in the
second-biggest town of Plovdiv, Sofia News Agency reported.
Bulgaria has a wealth of cultural tourism assets to be viewed and Plovdiv is a
rich area, the governor said.
The main advantage of Plovdiv is its potential to offer a complex tourism
product, said Radeva, who failed in running for Plovdiv's mayor in 2003
The Bulgarian state has to put a framework around education and training in the
field of tourism, the president of tourism and culture commission, Euro-Adriatic
region, said at the forum on January 6th. Alain Deriaz took part in the Bulgaria
Dream Area forum, which is focused this year on human resources in the tourism
Deriaz also delivered a special message from the president of the Congress of
Local and Regional Authorities of the Council of Europe, Giovanni di Stasi, who
wished great success to the forum. Deriaz also invited participants in Bulgaria
Dream Area to a special tourism conference in Switzerland in the end of January.
Bulgarian representatives would get a chance to contact potential investors,
according to Deriaz. Bulgaria recorded last year a record-high of €1,601bn of
revenues from international tourism.
A total of 4m Euro is allocated to the economy ministry for promoting Bulgaria's
tourism in 2005, up by 2.5m levs from the initially planned amount.
Siemens to renew railways
Bulgaria's transport minister and representatives of Siemens inked on January
7th a 67m Euro contract for the German company to provide 25 diesel trains for
Bulgaria, Sofia News Agency reported.
Bulgarian Deputy Prime Minister and Transport and Communications Minister
Nikolay Vassilev and Deputy Transport and Communications Minister Anelia
Kroushkova attended the ceremony. This major deal marked the beginning of a
railway renewal process in the country, which would result in better services
for the Bulgarian people, Vassilev said after signing the document. Vassilev
said a major of trains operating in Bulgaria were made in 1979, 1982 and 1986.
Last December Siemens won a competitive procedure for the diesel railcars. The
first two railcars are expected to arrive soon, and there are due between the
middle and end of 2005. The new rolling stock is expected to recoup itself
within 10 years, economising on diesel fuel alone. They will run along sections
of Bulgaria's railway network that are not yet electrified and where no
alternative means of transport are available. The maximum speed of the railcars
would be 120km per hour. Officials disclosed that the Bulgarian side had managed
to arrange a 10% discount from the originally offered price. Siemens also
arranged a loan by KFW and Nordbank to cover most of the sum. Bulgaria became
the 12th client purchasing the Desiro trains, according to Friedrich Smazwil,
vice president of the Transportation Systems Group of Siemens.