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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: 108 - (30/05/06)

Into the EU; but when?
That Bulgaria and Romania will enter the European Union (EU) is certain. But it remains far from clear when this great change will take place.
The EU may withhold aid for Bulgaria and Romania even if they join the bloc on time next year - because key reforms have yet to be completed, a draft European Commission report showed on May 11th. The document, circulated for debate among senior Commission officials, did not contain a recommendation on whether the two Balkan countries should join the 25-nation bloc in 2007 or 2008. 
EU leaders are now due to take a decision in June, although there are growing indications the final choice may be postponed. 
Luxembourg Prime Minister, Jean-Claude Juncker, said in an interview for the weekly Le Jeudi that the countries will join the EU in 2007. A Reuters poll of more than 40 analysts showed they were seen as having a good chance of joining on that date. 

What about aid disbursement?
The EU is a magnificent idea, but it is arguable that it has not really lived up to its initial promise. The grand conception behind it is to banish wars between its member states once and for all by intertwining their economies so intimately as to render this impossible.
Europe was of course the continent that set off the two world wars of the last century. It is doubtful that France and Germany would ever have gone to war again even without the EU's existence. Neither benefited from either dire conflict but the European 'balance of power' was for centuries the core issue, and that of course kept changing. But with the EU firmly in situ it is now certain that nothing of the sort will ever happen again.
The downside of the affair is that it has become in practice the excuse for an agricultural racket and hand-outs of onerous provenance and dubious delivery. The Common Agricultural Policy (CAP), which began with the excellent idea of protecting the countryside from depopulation by preserving small farmers, has become, as everyone knows, a system of vast subsidy for agro-business and big farmers. It also, by its import tariff regime and exclusion of extra-European products, impedes the development of world trade and of the wealth of nations, particularly Third World nations. Mozambique, for instance, could provide sugar at a tithe of the price that Finland sells its sugar beet.
There are few people who would dispute the foregoing critique of the actual reality of the EU, save obviously self-interested people such as President Chirac of France, the greatest beneficiary of CAP. This is why there are grave misgivings about admitting new members. Every new EU state adds to the financial burden on Brussels, that is the communality of EU member-states.

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With the foregoing reflections in mind, it is clear why there are reservations about admitting Bulgaria and Romania right now among cognoscenti in EU affairs.
Bulgaria and Romania have so far failed to set up payment agencies for EU farm subsidies and Sofia was also not ready to disburse the bloc's multi-billion-euro regional aid. "If this is not remedied, the Commission may take measures to ... withhold payments to Bulgaria and Romania," the May 11th draft report of the commission said. 
Bulgaria and Romania missed out on the big wave of EU enlargement into former communist Eastern Europe in 2004, when 10 new members joined, because they were too slow in political and economic reforms. 
Since the Commission's last progress report in October 2005, Romania has reduced the number of red flags to four from 14 and Bulgaria to six from 16. 
However, while Romania's shortcomings concerned technical issues such as a computer system for tax collection, Bulgaria was told it must make urgent progress in prosecuting organised crime and fighting corruption. This is the rub. For it is much easier said than done. There is nothing like agreement between the member states about Bulgaria's fitness to join at this time, since the continuation of such outrages as contract killings, and rapacious illegal levies at the borders, indicates that the Sofia government is not in control of the country.
For instance, 52% of the Dutch polled recently oppose Bulgarian entry. Holland, as a founder member of the club really counts, as its role in stalling the EU constitution last year showed.

Russia "Limits" Negative Effects of Bulgaria, Romania EU Entry
There are those outside the club who have grave reservations about the enlargement too. Russia would like to take precautionary measures to limit the negative effects of Bulgaria and Romania's entry in the EU in 2007, Vladimir Chizhov, Russia's ambassador to the EU was cited as saying on May 23rd.
In an interview for the Interfax Agency Vladimir Chizhov explained that Russia wants to avoid the problem with the synchronisation "just as it happened two years ago when the ten countries joined the bloc." We have a series of fears concerning Bulgaria and Romania linked to the necessity of evaluation of the active agreements. Some of them will have to be changed and some annulled, Russia's ambassador to the EU added.
He also pointed out that the EU is an important, but difficult partner for Russia. "Despite being partners, we are also rivals in view of economic globalisation. The problems will continue emerging and the fight for markets will go on," Chizhov said in the interview.
Chizov earlier talked to the Financial Times saying that EU's new member states are spoiling Moscow's relationship with the bloc due to "phantom pains of the past."
"With enlargement, the EU has not become an easier partner for us," Vladimir Chizhov told the Financial Times. "Some, not all, of the new members have brought into the EU their own phantom pains - people who concentrate on the sores of the past," he added.

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FOREIGN RELATIONS

Polish PM visits Bulgaria 

Polish Prime Minister, Kazimierz Marcinkiewicz, recently made an official visit to Bulgaria by invitation from Bulgarian Prime Minister, Sergey Stanishev. Marcinkiewicz met with Bulgarian President, Georgi Purvanov, National Assembly Chairman, Georgi Pirinski, and Stanishev, Sofia News Agency reported. 
After the plenary talks between the official delegations, the two prime ministers held a joint news conference at the Council of Ministers. The main subjects of the talks in Sofia included Poland's support on Bulgaria's way to the European Union, the development of trade and economic relations, and cooperation in the field of military and power industry. Last year, trade between the two countries stood at 426.8 million Euro, a 36 per cent rise year-on-year. Imports from Poland in 2005 were worth 297.5 million Euro, or a 39 per cent increase compared to 2004. Exports of Bulgarian goods to Poland in 2005 stood at 129.3 million Euro, a 30 per cent rise year-on-year. According to data from the Bulgarian National Bank, Polish investments in Bulgaria for the 1996-2005 period amounted to some six million Euro, including 5.5 million Euro implemented in 2005. Preliminary information indicates that the largest share of this sum rests with the Maspex Wadowice Group, which at the end of 2005 acquired Litex Juice-Lovech. Investments have also been made in tourism and trade.

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NUCLEAR ENERGY

Kozludui NPP closure to cost Bulgaria 1.6bn Euro 

The closure of Units 1-4 of the Kozlodui nuclear power plant reactors will lead to a loss of more than 1.6 billion Euro for Bulgaria's energy sector, Economy and Energy Minister, Rumen Ovcharov, told Sofia News Agency. 
Additional sums varying between 250 and 750 million Euro will be lost due to the inability of Bulgaria to export large amounts. An intradepartmental work group with the council of ministers has concluded that after January 1st 2007 the Kozlodui plant's exploitation costs may reach 590 million Euro. Additionally, 600 million Euro must be invested in other projects as well, in view of ongoing reconstruction and modernisation programmes. Ovcharov admitted in Parliament that the closure of blocks will lead to increases in electricity prices. These higher prices will change inflation levels through expected price increases in other goods and services. 
According to government analysis, household incomes will decrease due to higher electricity prices and will decrease consumption demand. The closure of the four units is also expected to increase the workload of the Maritza East heating power plants. This will create an environmental problem and create health risks to those living close to the plants. Meanwhile, TVEL Nuclear Fuel Corporation Executive Director, Vassily Konstantinov, said that Russia would continue to store used nuclear fuel from the Kozlodui plant even after 2020, until the exploitation period expires. Russian experts said that the Kozlodui plant and energy blocks are safe and can still be used.

Russian, Czech bidders team up for Belene NPP 

Russian company, Atomstroyexport, is considering teaming up with Czech consortium, Skoda Alliance, to build Bulgaria's second nuclear power plant in Belene, Sofia News Agency reported. 
The two bidders may unite if the Bulgarian government decides to go through with the project, Vladimir Porigin, head of the Atomstroyexport division for construction of new NPP abroad said. 
Bulgaria's government had to choose the cheapest option to finance and offer the lowest electricity price, Porigin said. The procedure for selecting the contractor allows tie-in between rival bidders. Porigin believes that the National Electricity Company (NEC) in Bulgaria will be ready with its choice of a contractor for the Belene plant construction by early June. The Bulgarian government has decided to build two 1,000 megawatt reactors in Belene at a cost of two to four billion Euro. NETC expects the first reactor to become operational in 2012. The contractor's bids were introduced in early February. Some 20 Bulgarian companies have notified AtomStroyExport of their interest in becoming subcontractors on the Belene project, Porigin added. 
The company will audit the candidates before making a selection. NEC even asked Russian experts 800 questions concerning the technical and economic aspects of the Belene NPP construction project. Russian Gazprombank is also a strategic investor in the project, and the Russian government has granted a loan to guarantee the financing of the Belene plant construction. Bulgaria Energy Minister, Rumen Ovcharov, recently said Bulgaria will provide a 300 million Euro guarantee for the loans that will be received from Euroatom and EIB for the Belene NPP. The guarantee is a political move aiming to secure EU backing for the project, Ovcharov explained. 
The Belene project was suspended in the early 1990s due to cost overruns and environmental concerns. By the time the building of the 1,000 megawatt Soviet-designed plant was put on hold, some 40 per cent of construction works worth 1.0 billion Euro had been completed, including the delivery of a Skoda reactor. Atomstroyexport will also work together with Framatom, the company that will deliver and assemble the equipment for the Nuclear Power Plant.

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TOURISM

Korean tourists explore possibilities in Bulgaria 

Members of the State Tourism Agency (STA) and the Bulgarian Association of Travel Agencies (BATA) presented Bulgarian tourism products to representatives of the 10 biggest tour operators in Korea, media and diplomats in the Bulgarian embassy in Seoul, Sofia News Agency reported. 
According to Korean data, the number of South Korean tourists in Europe exceeded one million in 2005. As a result of the growing Korean interest in Europe, in December 2005 Bulgarian Honorary Consul to Korea Kim Hi Yong established an informal organisation including ambassadors of Bulgaria, Poland, Romania, Slovakia, Serbia and Montenegro, Hungary and the Czech Republic. The aim of the group is to explore possibilities for further development in relations with Korea. The group works also in the area of tourism to attract South Korean tourists to Central and Eastern Europe by offering tourist packages. Such tour packages are common practice on the Korean tourism market. The initiative will also inform Korean tour operators of many unexplored tourism possibilities in Bulgaria, Romania, Slovakia and Serbia and Montenegro. Even countries with a developed tourism policy like Poland, Hungary and the Czech Republic agreed to take part in the programme, as it will give them the opportunity to increase the number of South Korean tourists.

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