Books on Bulgaria
% of GDP
Update No: 107 - (28/04/06)
Tough talk from the EU
A month before a crucial European Commission report on Bulgaria's EU bid,
Sofia's dialogue with Brussels has deteriorated even further. The most
contentious issue remains the rewrite of the Constitution which, according to
Brussels, compromises the independence of the judiciary.
The Romanian media reported that the foreign ministers of the two aspirant
states will urge Brussels to state unequivocally the accession date, fuelling
speculations that the eagerly anticipated reports due to be released on May 16th
may cite no concrete deadline.
The visit of EU enlargement commissioner Olli Rehn ended in hushed tones and
with business-like efficiency, while in parliament MPs from the ruling majority
insisted that they still didn't get what Europe wants. On April 14th, just
before Easter Friday, Rehn visited Bulgaria for the last time before the issuing
of the final European Commission report on the country's readiness to join the
union. He was giving no Easter eggs, however.
The implementation of reforms in Bulgaria is more important than the EU
accession date, Rehn stated. Significantly, he declined to name a specific entry
Rehn met President Georgi Purvanov and Prime Minister Sergei Stanishev, as well
as diplomats from EU member countries. MPs did get the chance to discuss issues
with Rehn, leading to criticism from members of opposition parties.
007 is the date
Yet January 1st 2007 is an achievable accession date for Bulgaria into the EU
should it put an all-out effort into the implementation of reforms, Rehn said.
He said the final EC report will be as objective as possible.
Rehn praised the amount of investment that Bulgaria managed to attract in the
past months, reportedly in the hundreds of millions. Previously, Bulgaria has
been a laggard in attracting foreign direct investment (FDI); but not now.
Investors have begun to note that it is in Central Europe, and that it has a
highly educated work-force, the one undoubted boon of communism, and at
incredibly cheap wages and salaries. It is enough to make one conjecture that
the Labour Theory of Value and Marx's highly charged interpretation of it as
inextricably involving exploitation might be right after all. But communism
being vindicated in backward countries as the appropriate forerunner, rather
than the successor, to capitalism!
Rehn also noted the progress in previously critical spheres including
agriculture, intellectual property rights and border control.
Bulgarian institutions are working on the fulfilment of all EU accession
criteria, Prime Minister Sergei Stanishev told European commissioner for
financial planning and budget Dalia Grybauskaite.
The main goal of the ruling coalition is to achieve EU accession on January 1st
2007, as scheduled, Stanishev said.
Stanishev presented the specific measures the National Assembly and Cabinet are
undertaking, the Bulgarian National Radio reported.
The discussion also focused on the utilisation of EU structural funds in
Bulgaria, one of the priorities for the Bulgarian administration in the words of
Grybauskaite said a decentralised management system is essential for the proper
distribution of EU funds. She also discussed with Stanishev other financial
matters related to the upcoming EU accession of the country.
Bulgaria plans long-term energy investments
Large-scale investments are up-coming in international energy corridors and
Bulgaria should use its attribute as a strategic geographic location in regards
to energy, newly appointed executive director of Bulgaria's investment agency,
InvestBulgaria's Stoyan Stalev, said, Sofia News Agency reported.
Long-term strategy and marketing are required to implement projects in the
energy sector since future investment will likely focus on the energy sector,
Stalev said. He added that better investment opportunities exist for sectors
that offer slower but long-term investment return. The amount of investment is
not the only important factor. Investment should also create and maintain
employment, Stalev said.
Mining and light industries are sectors with short-term development potential.
Any investor bearing a long-term social responsibility is a reliable investor,
he added. According to Stalev, the number of new and existing jobs and the large
volume of investment are important factors. As employment is a social priority
of the country's policy, strengthening relations and coordination with the local
and regional governments and the joint seeking of investors for recovering
traditional and developing new productions are vital, Stalev said.
Regional investment policy organisation and orientation to municipalities with
higher unemployment will help the local self-employment bodies. The
self-confidence of local authorities in regards to foreign investors should be
improved by stating their requirements and priorities. Local authorities have
their social and economic goals but lack some initiatives, Stalev said.
Capital is expected to be invested also in the finance, high-tech and tourism
sectors. However, the conditions in these sectors change fast and may become
over-exploited. Tourism is a prospective area in regards to investments and
development. Stalev said he would also consider investments in ecotourism
projects to help preserve nature.
Bulgaria authorises Varna sale to Czech CEZ
Bulgaria's privatisation agency announced that it has agreed to sell 100 per
cent of Varna Thermo-electric Power Plant to Czech utility CEZ for 206 million
Euro. During the tender procedure CEZ offered 192 million Euro for the power
plant. The agreed upon increase will add nearly 14 million Euro to the national
budget. Discussions between the PA and CEZ ended a month before the deadline of
April 21st. During the talks, the additional investment CEZ is willing to
provide reached 40 million Euro which will be part of an investment fund for
energy projects. The memorandum on the fund's establishment will be signed
between the minister of Economy and Energy and CEZ simultaneously with the
privatisation agreement, reported Sofia News Agency.
The negotiations between the Agency and CEZ have been completed. Some technical
details, related to the draft sales agreement, are about to be specified prior
to its endorsement. In the near future the draft contract will be endorsed and
offered for the approval of the supervisory council of the PA. Before the new
owner acquires the power plant, the Commission for the Protection of Competition
also needs to approve the deal. "We have always promised a very fast and
factual approach to negotiations and we look forward to the conclusion of the
contract and quick settlement of the transaction," said Martin Roman,
Chairman of the Board of Directors and CEO of CEZ.
So, the Czech energy company will become the largest energy distributor in
Bulgaria, running also the three-way energy pool including 67 per cent stakes
each in Sofia City, Sofia District and the town of Pleven power utilities.
Currently the three companies are servicing a total of 1,915,497 subscribers,
with electricity sales totalling 7.981 B kWh. The company started talks to
acquire the 1,260-megawatt Varna plant, for which it placed a second-best offer
last year, after top bidder Unified Energy System (UES) from Russia, abandoned
the sale. The Czech energy giant is also interested in taking a stake in the
planned 2,000-megawatt Belene nuclear power plant, which Bulgaria is struggling
to commission by 2011. CEZ is vying to buy power distributors in the Former
Yugoslav Republic of Macedonia and Romania. The company is also in the final
stage of talks with VS Energy, a Russian-owned, Dutch-registered firm, over a
majority stake in up to six power distributors in Ukraine. It has also signed a
contract with Bosnia's state-owned utility Elektroprivreda to build at least two
coal-fired plants and purchase coal mines in a long-term deal that could exceed
1.5 billion Euro. The news of the agreement reached between Bulgaria and CEZ
increased the demand for CEZ stock. Some 1.5 billion crowns worth of CEZ stock
Greece supports Bulgaria's EU entry
During a visit to Sofia, Greek Defence Minister, Vangelis Meimarakis, stated
that all political parties vehemently supported Bulgaria's accession to the
European Union scheduled for January 1st 2007. Negotiations with Bulgarian
counterpart, Vesselin Bliznakov, Bulgarian President Georgi Parvanov, and
Bulgarian Prime Minister Sergei Stanishev, in a cordial atmosphere left
excellent impressions on Meimarakis. After the meetings, Meimarakis underlined
the excellent bilateral relations that are characterised by mutual
understanding, friendship and cooperation between the two countries, stating
that this was a positive factor for the two countries and the entire region in
general, reported Sofia News Agency.
Meimarakis said that Greece's stance to warmly support Bulgaria's NATO accession
is vindicated because it has created a sense of security in the whole region. He
added that an environment of peace and security is necessary to have economic
growth, investments and new jobs, stressing that Bulgaria's EU accession will
have only positive results for all. Meimarakis confirms the mutual political
will for the further development of bilateral relations. The same climate
characterised the meeting he had with his Bulgarian counterpart Bliznakov.
Meanwhile, Stanishev expressed gratitude for Greece's support to Bulgaria's
accession into NATO and the ratification of the EU accession treaty by the Greek
parliament, according to a statement issued. He said the Greek minister's visit
has given a renewed interest in the development of closer and good neighbour
relations with Greece. Aikon, a unit of Greek construction, energy and real
estate group Gek, plans to build a 5-star hotel in Vidin, North-western
Bulgaria, said Aikon Director, Ivan Vilfan.
Bulgaria, Switzerland discuss bilateral relations
Bulgaria's President, Georgi Parvanov, met with his Swiss counterpart, Moritz
Leuenberger, while on an official visit to Switzerland, where Parvanov expressed
hope to be included among the beneficiaries of a one billion Swiss franc funding
package that Switzerland approved last February for the 10 new EU member states,
Sofia News Agency reported.
Parvanov voiced expectations that his country will be able to use payments
allocated by Switzerland to the new member states under the EU cohesion fund
deal. In turn, Leuenberger expressed Switzerland's strong support for Bulgaria's
accession to the EU, which will strengthen Europe's stability and security. He
noted that the decision for the allocation of CHF one billion to the 10 new
member states, as approved by parliament, may be put to a referendum.
HSDPA launches in Bulgaria
Bulgarian operator, Mobiltel, which launched its UMTS network in September 2005,
has started operating over an HSDPA network in Sofia, Sofia News Agency
Mobiltel, now part of the world's first five network operators offering new 3G
technology, plans to further expand into other major cities in the future. With
HSDPA and the first 3G network in Bulgaria, Mobiltel has once more demonstrated
its pioneering role as a leader in both the market and in technology, said
Mobiltel CEO, Josef Vinatzer, adding that "the fact that Mobiltel and
Mobilkom Austria are both part of the first five telecom companies in the world
who opened a HSDPA network shows the success of the Mobilkom Austria group
family and its commitment to innovation."
Mobiltel is offering deals on Sony Ericsson's K600i to market its first 3G
service, video calling. The changeover takes place completely automatically and
free of charge and all Mobiltel customers who already have a 3G-capable mobile
phone may begin using the new, faster network straight away. Just as in Austria,
the Bulgarian HSDPA network is integrated into the overall network. For example,
if a customer leaves the area where 3G is available, the mobile phone
automatically switches over to the 2G network. The main supplier for the HSDPA
upgrade was Ericsson.
French, Russian tourists prefer Bulgaria destinations
Bulgaria recently participated in the biggest French tourism fair, Salon
Mondial du Tourisme, which was attended by 110,000 people of which 7000 were
professionally involved in the tourism sector. Bulgaria was represented by the
state tourism agency, Bulgaria Air, Albena, USB-Travel and Solvex tourism
During the fair, several visitors inquired about the Bulgarian coast and
cultural tourism. It was noted that Bulgaria is re-gaining its popularity as a
tourism destination among the French. French tourists are mainly interested in
Black Sea resorts and cultural tourism opportunities in the country, Bulgarian
News Agency reported.
Bulgaria features as a destination in the catalogues of most major French
tourism agencies. The number of bookings is on the rise, representatives of the
tourism agency said. The interest in mountain, eco tourism and rural tourism
opportunities is also increasing. On March 15th the Bulgarian embassy in Paris
organised for the fourth consecutive time a tourism presentation which aimed at
presenting to French tourism agencies, media and leading French tourism guides
the potential and advantages of Bulgarian tourism opportunities. The last few
tourism seasons show a return of French tourists to Bulgaria. The French market
is considered to be one with great development potential. A strong interest was
also registered at the Bulgarian national stall at the Intourmarket 2006
Exhibition, which opened in Moscow with the participation of 500 companies from
46 countries. The speaker of the Russian State Duma Boris Gryzlov, Presidential
Envoy to the Central Federal District and Chairman of the exhibition's
organising committee Georgy Poltavchenko and Moscow Region Governor Boris Gromov
visited the Bulgarian stall. MITT-2006 Travel and Tourism Exhibition, which is
the world's third most important tourist event also opened on March 22nd at
Krasnaya Presnya Expocenter. Sixty-two Bulgarian tourist companies, a delegation
from the State Tourism Agency and representatives of the municipalities of
Sofia, Nessebur and Tsarevo participated.
Railway improvement programme introduced
Bulgaria's state railway BDZ Executive Director, Oleg Petkov, and National
Railways Infrastructure Company General Director, Dimitar Gaidarov, in the
presence of trade union representatives, industry-wide organisations and media,
presented a programme aimed at improving the financial situation of Bulgaria's
railways to Transport Minister Petar Mutafchiev, Sofia News Agency reported.
Both directors suggested the immediate sale of all non-operational assets and
measures that would boost revenues and reduce costs. At the meeting, Petkov
presented an analysis of the activities and talked about the programme's points
on development, while Gaidarov outlined the programme's points to improve the
railway's infrastructure, technical parameters and financial stabilisation.
Proceeds from the sale of non-operational assets in 2006 and 2007 are expected
to be 44 million and 43 million levs respectively, Gaidarov said. The short-term
railway infrastructure focus on the safety enhancement programme will take funds
from the cohesion and structural funds to both develop Transport Corridors 4, 8,
9 and 10 and to increase speed along the Gorna Oryahovitsa - Kaspichan line and
the Sofia - Karlovo - Bourgas line, which are not within the specified
The facilities are in exceptionally poor technical condition, resulting in the
reduction of train speed by 30 kilometres per hour. The company is expected to
report a loss of 76.3 million levs for 2005, an increase of some 30.5 million
levs from the previous year.
The proceeds from the infrastructure fees are also likely to be lower than
expected at 237.1 million levs. BDZ's 2005 losses are expected to equal some 37
million levs, Petkov added.