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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: 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 date.
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. 

FDI mounts
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! 

General progress
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 Stanishev. 
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.

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ENERGY

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 changed hands.

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EU ENTRY

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.

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FOREIGN RELATIONS

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.

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TELECOMMUNICATIONS

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 reported.
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. 

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TOURISM

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 agency.
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.

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TRANSPORT

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 corridors. 
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.

 

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