Books on Bulgaria
% of GDP
Update No: 113 - (26/10/06)
Most Bulgarians expected that incumbent Georgi Parvanov would win the first
round of the presidential election on October 22nd, which he duly did on 63.69%.
But due to a low turnout of 42% there had to be a run-off on October 29th.
Seven candidates were hoping to win Bulgaria's presidential election on October
22nd. Due to an expected low turnout, however, the race was always likely to be
decided in a runoff a week later.
By law, at least half of the country's eligible voters of some 6.4 million had
to participate in the first round of the presidential poll for the person who
garnered more than 50% of voter support to win outright victory. That was
unlikely to happen, as was successfully predicted by Tsvetozar Tomov, a
sociologist at the Skala polling agency, on October 9th.
Georgi Parvanov won 75.9 per cent of the vote in the second-round ballot,
while 24.1 of the voters cast ballots for Volen Siderov, the Central Election
Commission announced with 99.11 per cent of the votes counted.
He had a gift of an opponent in Siderov, just as Chirac had in Le Pen in the
second round for his re-election in 2002.
Threat from the far right
Stanishev lashed out at nationalist Ataka (Attack) leader Volen Siderov, who he
pointed out as one of Parvanov's most serious opponents, according to the first
round results the most serious. While they had not ruled out a possible turn of
tide among those competing for the second place, pollsters widely had expected a
runoff between Parvanov and Siderov, which duly came about.
The premier recalled the early 90s, when Siderov, then editor of the Demokratzia
(Democracy) paper stood firmly behind the ethnic Turkish Movement for Rights and
Freedoms in his publications. At present the agenda of the hardcore nationalist
is focused on announcing the Turkish party unconstitutional and advocating their
removal from Bulgaria's parliament.
Siderov would have risked turning Bulgaria into a pariah in Europe had he become
president. With EU entry in January next year it was vital for the eminently
respectable Parvanov, much liked in European capitals, to win.
"It is much easier to defeat Volen Siderov", Georgi Parvanov said at
press conference, a journalist of FOCUS News Agency reported. According to him,
the rightist candidate Nedelcho Beronov had represented a real political
alternative, which was not defended. However, it was not his fault. He behaved
with dignity. Besides, he joined the presidential campaign very late in
comparison to the other candidates", Parvanov stated.
Parvanov's winning the elections, is a success for Bulgaria too, Stanishev
explained, as the only two alternatives were a destructive one and a
Despite the fact that Parvanov won the previous elections as a candidate of the
socialist party, he chose to run as independent for a second term in office.
Days after his candidature was raised by an initiative committee, the socialists
officially announced that they will be supporting him as well.
GDP rising by six per cent
Prime Minister Stanishev was able to point to one success to motivate voters
when he said that the country's gross domestic product (GDP) was expected to
rise by six per cent by the end of 2006. The average GDP increase in the past
several years was five per cent, Stanishev said, as quoted by Bulgarian National
Stanishev also said that Bulgaria disposed of enough financial means to cover EU
accession expenses. The state budget had provided 650 million leva for projects
utilising EU pre-accession funds. Projects utilising the EU Structural Funds
would receive total state funding of 200 million leva, Stanishev said.
The EU beckons
The Prime Minister Stanishev announced that there are no reasons to believe
that prices in Bulgaria would go up after the country joins the EU on January 1,
2007. Stanishev warned that if anyone tries to speculate with prices and future
membership, the 'state would sanction him'.
Stanishev was speaking during meetings with people and entrepreneurs held in
three Bulgarian towns on October 16th. In all three towns the Prime Minister
explained that joining the EU does not mean that anyone else would solve the
problems of Bulgaria, but it also does not mean at all that prices would jump
dramatically, companies would go bankrupt and unemployment would increase.
The Paris-Sofia axis
Now is obviously an excellent time to forge a special relationship with
France, traditionally in their eyes the leader of the EU.
Bulgaria was putting every effort into meeting the EU entry criteria by the end
of the year, Prime Minister Sergei Stanishev said during a meeting with French
senators. The representatives of the ruling Union for a Popular Movement visited
Bulgaria to examine reforms related to the country's upcoming EU entry.
Delegation members said that France was expected to ratify Bulgaria's EU
accession treaty soon, as the country deserved to become union member on January
1 2007, a Council of Ministers press release said.
Bulgaria registered an increase in foreign investment, Stanishev said. France is
to invest 400m euro in Bulgaria. France and Bulgaria could deepen their economic
co-operation in the fields of energy, transport and agriculture. One sign of the
improved business relations between the two countries was the increased number
of French tourist visits to Bulgaria, he added.
Stanishev also discussed the closure of some blocks of Kozlodui nuclear power
plant. Bulgaria needs to shut down the reactors as part of the EU-related
engagements it accepted. Though the issue was sensitive for Bulgaria as it
affected public opinion, the country was going to comply with the conditions
related to the functioning of Kozlodui listed in the accession treaty, said
In mid-October he clinched the new relationship by meeting Chirac in Paris,
where the reception was most cordial. One fortunate consequence of the end of
the Cold War is that stereotypes built up then are evaporating. Bulgaria is now
seen as the interesting and strategic partner for Europe that it is, the gateway
to the Balkans.
Stanishev had the honour of inaugurating the exhibition of four of Bulgaria's
world-famous golden treasures dating back to Thracian times at Paris' Jacquemart-Andre
Museum. More than 100 pieces of gold artifacts from the Rogozen, Panagyurishte,
Borovo and Letnitsa treasures will reveal the high mastership of ancient
Thracian arts to the French public.
The Germans count too
The French may still have the upper hand politically, but the Germans are
the economic colossus in Europe, with the world's greatest volume of exports and
an industry increasingly interested to emulate the Anglo-American proclivity to
The decision of German company, Siemens, to open a factory in the Bulgarian town
of Botevgrad showed confidence in Bulgaria's business climate and workforce
quality, Prime Minister Stanishev said. Stanishev attended the opening ceremony
of Siemens' transformers factory. Bulgaria would be the third country after
Canada and China where the company would produce high technology items.
"The opening of Siemens' factory is a sign of the confidence in the
country, the business climate, the quality of the workforce and in our ability
to work by European standards," said Stanishev.
Economic policies pursued were going to attract other major foreign investors in
the future, he added. For the first six months of 2006 direct foreign investment
in the country reached 1.4 billion euro, said a Council of Ministers press
Siemens invested four million leva in Botevgrad so far. Nearly 100 experts have
been employed to take part in the production.
Greece's EFG Eurobank buys 74% of Bulgaria's DZI
Greece's EFG Eurobank acquired 74.26% of Bulgaria's DZI Bank recently, Sofia
News Agency reported.
The shares of Bulgaria's bank were sold for 157.76m Euro, 110m Euro in cash,
along with 2 million of EFG Eurobank shares.
DZI Bank ranks eleventh in the Bulgarian banking system and has a 3% market
share, with a network of 21 branches and 95 points of sale. It has total assets
of US$717m and a market capitalisation of US$75m.
The DZI financial group owns around 70% of DZI Bank and the Bank Austria
Creditanstalt owns 20% of DZI.
The company is run by Vesela Kyuleva, the spouse of top banker Emil Kyulev who
was shot dead a year ago.
Fitch Upgrades UniCredit Ratings
The international agency Fitch upgraded the individual rating assigned to
UniCredito Italiano to "B" (from "B/C") and to Bayerische
Hypo-und Vereinsbank to "C" (from "C/D"), the Bulgarian
office of UniCredit announced, Sofia News Agency reported.
Fitch revised the outlooks on both banks to "Positive" (from
The rating actions reflect the progress made by UniCredit's management in
integrating HVB Group and notably the capital ratio improvement and the credit
risk reduction in HVB's German operations, comments Fitch Ratings.
The ratings reflect UCI's sound prospects for consolidating its leading position
in the Italian banking market, as well as in the German, Austrian and Central
and Eastern European ("CEE") markets, Fitch Ratings adds.
UniCredit Group is the leading financial Group in Central and Eastern Europe.
With Market Cap of 65bn Euro, UniCredit is present on 21 core markets in the
world and has 28 million clients, 7000 offices, 134,000 employees and total
assets of 804bn Euro as of end June 2006.
UniCredit Group is represented by Bulbank, HVB Bank Biochim and Hebros Bank in
Bulgaria. Together the three banks are the biggest financial group in the
country with joint assets of over 3.3bn Euro, more than one million clients and
over 320 offices.
Albania-Bulgaria sign memorandum for oil pipeline
Bulgaria and Albania have signed a memorandum of cooperation for the
construction of the US-backed AMBO oil pipeline, totalling 917 kilometres in
length and responsible for carrying 750 barrels per day from Burgas to the port
of Avlona, Italian News Agency ANSA reported on October 4th.
Albania's annual profits from the pipeline are seen reaching US$40 million per
year. According to the initial planning, the pipeline will cross the above
areas: Qafe-Thane, Perrenjas, Librazhd, Elbasan, Cerrik, Fier, Novosela and
reach the port of Avlona. Due to environmental concerns, government sources
suggested that the pipeline's final destination will be Porto Romano area and
EBRD lends 15 mln Euro to UBB, Allianz Bulgaria
The European Bank for Reconstruction and Development (EBRD) announced the
disbursement of a total of 15 million Euro to United Bulgarian Bank (UBB) and
Commercial Bank Allianz Bulgaria, according to a recent press release. UBB will
get 10 million Euro to help the country's industry become more energy efficient
with the help of another EBRD loan. The EBRD is further lending Commercial Bank
Allianz five million Euro to support the development of local small and
medium-sized enterprises. The loan comes under the EU/EBRD SME Finance Facility
and is being complemented by a one million Euro-grant from the European
Commission for technical assistance and financial incentives, New Europe
James Hyslop, EBRD country director for Bulgaria, said the loan will support the
growth of Bulgaria's private small business sector by facilitating their access
to finance. A vibrant SME sector is a prerequisite for a strong economy. In
order to grow, these companies need long term funds, and the EBRD welcomes CB
Allianz Bulgaria's strategy to increase its focus in this sector, he added.
Procurator of CB Allianz Bulgaria, Georgi Momchilov, said that, with their
flexibility, SMEs are a major engine for economic development. In order to be
competitive and to meet European standards, these enterprises need investments,
especially in preparation for Bulgaria's accession to the European Union.
Providing finance to the SMEs represents our commitment to this process, he
underlined. CB Allianz Bulgaria aims to use the proceeds of the EBRD loan and
the EC grant to streamline its approach to SME lending. The EBRD has an
important strategic partnership with Allianz Group, whose parent company Allianz
AG is the largest insurer in the EBRD's countries of operations.
The EU/EBRD SME Finance Facility, a joint programme of the European Commission
and the EBRD, supports the development and growth of SMEs by facilitating their
access to finance. Under the programme, the bank will make available funding of
1.1 billion Euro. The EC has contributed 156.75 million Euro in grant financing
since the launch of the programme in 1999. The EBRD is the largest investor in
Bulgaria with over 1.3 billion Euro committed to projects across the country.
Working with its many partners, the EBRD has mobilised more than 5.4 billion
Euro for projects in Bulgaria.
MINERALS & METALS
Restructuring of metallurgical plant to finish in 2008
The cabinet have approved an updated national programme for the
restructuring and development of Kremikovtsi metallurgical works in Bulgaria.
According to the programme, the restructuring of the steel industry must be
completed by the end of 2008, the government's information service said, Sofia
News Agency reported.
It was reported that the programme was approved back in 2004 and has been
submitted to the European Commission. It targets three steel-making companies,
Kremikovtsi, Stomana Industry and Promet Steel. The restructuring of Stomana
Industry and Promet Steel will finish by the end of 2006, a press release said.
The two have achieved the technological and financial indicators stipulated in
the programme. Over the past three years, the two companies have led a stable
trade policy in the fast-growing national and regional steel market. Kremikovtsi
is yet to achieve the indicators for economic viability. No increase in the
capacity for production of end products is planned for the plant. In 2006-2017,
Kremikovtsi expects to receive investments worth US$317 million. A total of 239
million Euro are to be invested by 2008, while 76 million Euro are reserved for
the realisation of environmental projects until 2010.
Cameco interested in country's uranium production
Canadian uranium extraction company, Cameco Corporation, was interested in the
eventual restoring of uranium production in Bulgaria, Sofia News Agency
Bulgaria closed down the uranium extraction after a 1992 government decision,
the news agency added. Preliminary data showed uranium deposits in the country
amounted to 12,000 tonnes.
This quantity may be sufficient for Bulgaria's nuclear energy needs in the next
two to 30 years, Economy and Energy Minister, Rumen Ovcharov, said.
The country's nuclear energy uses 500 tonnes a year, experts said. Cameco was
also interested in Bulgaria's nuclear energy production, as well as in strategic
partnership for the Belene nuclear plant project. Cameco exploited uranium
deposits in Canada, the US and Kazakstan, BNR said.
Proposal for third Danube bridge to Romania
Bulgaria's Transport Minister, Petar Mutaftchiev, recently in Bucharest proposed
building a third bridge over the Danube River between his country and Romania.
The bridge would join the Bulgarian town of Oryahovo with Bechet on the Romanian
side, Mutaftchiev told his Romanian counterpart Radu Berceanu in Bucharest,
Medifax News Agency reported.
"We did not immediately reject this idea, because in the future there will
have to be more transport possibilities between Romania and Bulgaria,"
As part of the Stability Pact for South Eastern Europe, Romanian and Bulgaria in
July signed a deal on a second bridge over the Danube along the stretch of the
river that falls within both countries' borders.
Work on the bridge, which will link Calafat in Romania with the Bulgarian town
of Vidin, is scheduled to begin in May 2007.
Romania and Bulgaria, who are scheduled to join the EU in 2007, were split for a
long time over the location of the second bridge, leading to considerable delays
in the project.
The only Danube bridge currently in operation between the two countries is in
the middle part of the common river stretch between Giurgiu on the Romanian side
and Ruse in Bulgaria.