News from Bulgaria, 96-07-26

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From: Embassy of Bulgaria <bulgaria@access1.digex.net>

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

26 July, 1996

CONTENTS

[01] CABINET APPROVES ANSWERS TO EUROPEAN COMMISSION QUESTIONNAIRE

[02] SESSION OF BULGARIA-EU PARLIAMENTARY COMMITTEE CONTINUES

[03] GERMAN STATE MINISTER ARRIVES IN SOFIA

[04] PARLIAMENT ADOPTS 1997 BUDGET UTILIZATION ACT

[05] NATIONAL ASSEMBLY AUTHORIZATIONS

[06] NATIONAL FLAG, COAT-OF-ARMS LAW ADOPTED

[07] RULING OF CONSTITUTIONAL COURT INCONCLUSIVE ON THE APPOINTMENT OF PRESIDENTS OF SUPREME ADMINISTRATIVE COURT AND SUPREME COURT OF CASSATION

[08] STATISTICIANS REPORT NEGATIVE ECONOMIC TRENDS

[09] WORLD BANK: BULGARIA STILL A LAGGARD

[10] WILL FOREIGNERS BE ENTITLED TO OWN LAND IN BULGARIA?

[11] BULGARIA RECEIVES FIRST I.M.F. LOAN TRANCHE

[01] CABINET APPROVES ANSWERS TO EUROPEAN COMMISSION QUESTIONNAIRE

The questionnaire included questions on Bulgarian politics and economy, divided into 23 sections: customs unions and taxation, agriculture, fishing, employment and social development, transport, competition, economic and monetary policy, energy industry, industry, domestic market, lawcourts, protection of consumers and environment, among other, journalists were told today by Deputy Foreign Minister Irina Bokova. The answers of the government will be filed at the European Commission early next week, said Mrs. Bokova.

The answers include more than 5000 pages plus an appendix for all sectors, with confidential information. We have nothing to hide from our European partners because we hope our relations will soon get still closer, said this Deputy Foreign Minister.

The documents, to be updated in the coming months with a view to the EUROSTAT methods to be introduced as of January 1, 1997, is an attempt to provide a full picture of the trends in the political and social development of Bulgaria, of the potential each sector of the economy and politics has, Mrs. Bokova also said. These documents will be used by the Bulgarian government and other state bodies in the future, she said.

The government lays a special emphasis on Bulgaria's desire to launch as soon as possible negotiations on EU entry on an equal basis and simultaneously with the other EU associate members, Irina Bokova said, adding that the above issues will be discussed with German State Minister Werner Heuer who arrives on a visit here today. She said Bulgaria will persistently seek support from Germany for entry into the EU.

[02] SESSION OF BULGARIA-EU PARLIAMENTARY COMMITTEE CONTINUES

JPC Co-chairman for Bulgaria Nikolai Kamov outlined Bulgaria's major economic difficulties. "I tried to present the right picture of the current political and economic situation in Bulgaria, with no exaggerations or understatements," Kamov said after the discussion.

"Bulgaria is in the midst of a serious financial and social crisis triggered by the inconsistent and anti-reform policy of the Government of the Bulgarian Socialist Party and the Party's parliamentary majority," Vassil Doikov, MP of the opposition Union of Democratic Forces, said in his report.

The afternoon discussion of the JPC addressed issues of the civil society, freedom of speech and the media policy, as well as Bulgaria's removal from the EU visa blacklist. After the end of the JPC session later today, the Committee's members were received by President Zhelyu Zhelev who congratulated them on their work and wished better future to Bulgaria.

[03] GERMAN STATE MINISTER ARRIVES IN SOFIA

Being Germany's representative in this forum, Hoyer familiarized the Bulgarian side with his country's ideas about the integration of the associated countries into the EU at different stages. The sides also discussed the further promotion of regional cooperation in the Balkans.

Werner Hoyer met with Minister of Trade and Foreign Economic Relations Atanas Paparizov. After the meeting Paparizov told journalists that he briefed the guest on the answers to the European Commission questionnaire the European Union will use in taking a stance on this country's membership application and the final steps taken by Bulgaria for its integration to the World Trade Organization.

[04] PARLIAMENT ADOPTS 1997 BUDGET UTILIZATION ACT

Under the Act the Council of Ministers is obliged to submit to the National Assembly the national budget bill not later than two months before the beginning of the new financial year. If the Cabinet fails to meet the deadline it should present the motives for the delay and ask the Parliament to extend the term.

The Act provides that the Cabinet is not allowed to change the allocations for the judiciary and the National Accounting Office that have been submitted to it in advance. Up to one month after the promulgation of the national budget act the Council of Ministers adopts a decree on the utilization of the budget.

The Act rules that, if Parliament does not adopt the budget act by the beginning of the new financial year the revenues are collected according to the effective laws and appropriations for budget expenditures are made to the expenditures' amount of the like period of last year.

[05] NATIONAL ASSEMBLY AUTHORIZATIONS

Parliament authorized the stay in Bulgarian territorial waters of Turkish, Greek, Italian, US, Romanian, Russian and Ukrainian naval ships with their authorized armament for participation in a naval exercise codenamed "Breeze 96," which will take place in the Black Sea from August 10 to 16, 1996. "Breeze 96" is part of Bulgaria's PFP Individual Partnership Programme with NATO. Bulgaria will field in the exercise nine combatant and auxiliary ships, two helicopters and six airplanes. The remaining countries will be represented by one warship each.

The National Assembly today authorized the stay within Bulgarian territory of 100 unarmed servicemen and the importation of three V-755 surface-to-air missiles and eight ZM9ZM surface-to-air missiles of the Army of the Slovak Republic between Setember 16 and 27, 1996.

Parliament authorized the signing of a USD 30-million loan agreement with the International Bank for Recosntruction and Development, a commodity credit to the amount of USD 25 million with the United States, and a loan totalling USD 3.6 million with Norway.

[06] NATIONAL FLAG, COAT-OF-ARMS LAW ADOPTED

The coat-of-arms issue was probably the first one that had to be solved by consensus but the ruling [Socialist] party did nothing for this, Ivan Kostov, leader of the major opposition Union of Democratic Forces (UDF) said addressing Parliament. He recalled the UDF stand in favour of reinstating the pre-1946 Bulgarian coat-of-arms, stressing it was exactly what all other post-communist countries of Central and Eastern Europe have done.

The floor leader of the Socialist-led Democratic Left coalition Krassimir Premyanov answered the accusations saying the UDF avoided all negotiations on the matter. "It is our responsibility to approve a coat- of-arms. The responsibility for having no coat-of-arms because of lack of will for dialogue rests with Parliament, with the [parliamentary] majority and it is blamed for the consequences.." Premyanov said. He further recalled that the Democratic Left had proposed amendments to the constitutional provisions for a national coat-of-arms, to help come to a common understanding on the issue, but the UDF refused. "Today the responsibility we have before the state and the interests of society require that we observe the Constitution and adopt a coat-of-arms," said he.

The Constitution, adopted in 1991, reads that "the coat-of-arms of the Republic of Bulgaria shall depict a gold lion rampant on a dark gules shield". The Socialists argued this provision does not allow the introduction of additional elements. The coat-of-arms provisions in the law passed today are identical with those in the Constitution. Parliament today approved by 110 votes the coat-of-arms design introduced by Krassimir Premyanov.

Article One of the law says that the Bulgarian national flag and coat-of-arms indicate the sovereignty of the Bulgarian nation and state shall be used as insignia in this country's international relations. A separate law will specify how the coat-of-arms shall be depicted on the state seal. Using the national flag or coat-of-arms, or elements of them on badges, commemorative medals and the like shall be made only with the government's permit.

The newly passed law preserves the national flag that has to date been used: a white-green-red tricolour. The national flag must be permanently flown at the buildings of Parliament, Council of Ministers, the ministries, the National Radio, National TV, the Bulgarian News Agency and other state institutions, in Bulgarian military units, Bulgarian ships, overseas Bulgarian diplomatic missions, border crossings, ports and airports.

[07] RULING OF CONSTITUTIONAL COURT INCONCLUSIVE ON THE APPOINTMENT OF PRESIDENTS OF SUPREME ADMINISTRATIVE COURT AND SUPREME COURT OF CASSATION

The constitutional case was instituted proceeding from a petition by Prosecutor General Ivan Tatarchev who asked the Constitutional Court to rule on who has the power to countersign presidential decrees and whether the refusal to countersign the documents has a bearing on a decree's validity. Tatarchev approached the Court after Justice Minister Mladen Chervenyakov refused to countersign President Zhelyu Zhelev's decrees appointing incumbent President of the Supreme Court Roumen Yankov and incumbent Deputy Prosecutor general Vladislav Savov Presidents of the yet unconstituted SCC and SAC.

Yankov and Slavov were elected presidents of the SCC and SAC on June 26, 1996, by respectively 18 and 14 votes in favour, at a meeting of the Supreme Judicial Council. Twenty-one members of the Supreme Judicial Council took part in the vote by secret ballot. Chervenyakov, who by law chairs the Supreme Judicial Council, challenged the validity of the election and described the meeting as a "farce prompted by political considerations". On a proposal of the Supreme Judicial Council, Zhelev signed the decrees appointing the heads of the two courts of last resort, whereas Chervenyakov refused to countersign the documents.

"The promulgation of the decrees in the 'Official Gazette' assumes an importance of an announcement and does not concern their validity," Judge Penev said. The No.60 issue of the "Official Gazette" of July 16, 1996 came out in two different versions. One version promulgated the presidential decrees appointing the presidents of the SCC and SAC, and the other version omitted these decrees.

President Zhelev made an express address to the nation on July 16 on the matter in which he stressed that "a flagrant violation of this country's Constitution has been committed by the attempt to suppress instruments of one of the main institutions of the State". Zhelev stressed that "the political responsibility entirely rests with the ruling [Bulgarian Socialist] Party [BSP] which recently has identified itself with the State on a number of occasions, flagrantly violating the Constitution and the laws". In his concluding statement, Zhelev said that "exercising my powers, in future I will petition the Constitutional Court to pass on the constitutionality of the BSP".

The Constitutional Court declared anti-constitutional a decision of Parliament voted on June 28, 1996, according to which the Supreme Judicial Council may exercise its powers for electing presidents, vice- presidents and judges in the SCC and SAC and the appellate courts duby after the passage of the SAC law and the procedural laws regulating the three-instance administration of justice. The Constitutional Court declared the decision anti-constitutional because the National Assembly exceeded its constitutional powers. "Adopting a decision, Parliament makes a statement; it, however, cannot postulate rights and obligations. The National Assembly can do this through a passage of a law," Judge Penev said. The Constitutional Court was approached on the matter by Tatarchev and MPs of the opposition Union of Democratic Forces. Eleven Constitutional Judges voted in favour of the Court's ruling; Arabadjiev made reservations.

Parliament repeated its decision in the amendments to the Judiciary Act which it passed in early July. Zhelev returned the amendments for further consideration in the National Assembly and the parliamentary majority passed them again on Tuesday.

Judge Penev did not commit himself to state whether Yankov and Slavov are appointed presidents of the SCC and SAC. He expects that the opposition will petition the Constitutional Court contesting the amendments to the Judiciary Act and that the BSP will approach the Court to rule on the presidential decrees.

The functions of the SCC and SAC - the two highest courts of the land, are regulated by the Constitution and the Judiciary Act, which introduce a three-instance system of administration of justice. The second-instance appellate courts, also provided for by the Constitution and the Act, have not been established yet, either. Under the effective two-instance system, the Supreme Court combines the competences of the SCC and SAC, thus becoming the third instance on all cases.

[08] STATISTICIANS REPORT NEGATIVE ECONOMIC TRENDS

The January-June output in both the public and private sectors of the non-agricultural industries amounted to 689,000-plus million leva, which is equal to last year's figure. The growth of private sector production in this period has outstripped by 16% that of last year. It, however, cannot offset the decline in the public sector.

The January-June industrial output was worth over 487,000 million leva which is 0.4% down from last year's figure, according to NSI data. The decline was most dramatic in the food processing industry (nearly 6,000 million leva). The June industrial output totalled about 112,000 million leva, up by 3% from this time last year. Retailers in the public and private sector reported 52,000 million worth of sales in June. For the first time this year it is less that the like figure in 1995 (by 2.7%).

In view of the above figures and the pessimistic projections of CEOs, the NSI is not expecting reversals in the economic situation in the coming couple of months, said Mrs. Danailova.

[09] WORLD BANK: BULGARIA STILL A LAGGARD

[10] WILL FOREIGNERS BE ENTITLED TO OWN LAND IN BULGARIA?

[11] BULGARIA RECEIVES FIRST I.M.F. LOAN TRANCHE

IMF Resident Representative for Bulgaria Franek Rozwadowski said it means that the IMF Executive Board has decided to back financially the programme of the Bulgarian government. In the Topical Interview programme of the National TV last night he said the coming of the first tranche is likely to have an immediate effect on the market. Furthermore, it will disperse once and for all the speculations about a moratorium on the payment of this country's external debt, said he.

Mr Rozwadowski specified the amount of the loan was increased from the SDR 350 million initially considered, to SDR 400 million (equal to about 585 US dollars). What is more, the IMF has decided to step up the schedule for drawing the tranches and now 40% of the total loan will be made available over the next two months. This decision was prompted by the belief of the IMF Executive Board members that the government is implementing a strong programme and by the fact that many of the measures in this programme were implemented at its early stages, said he.

Mr Rozwadowski believes the country has made a good start. It has launched a number of good measures, including budget-related ones, in the banking sector, the reform in state-owned enterprises, limiting the effect of decapitalization of state-owned enterprises. The field in which the next decisive steps should be made is probably again the reform in the public sector, including the finalization and implementation of the regime of financial isolation, completion of the process of liquidation of loss- makers and a speedier cash privatization. The IMF is taking into consideration everything, is following the macroeconomic results in the banking sector and in enterprises, said this IMF official.

As regards income-related measures, Mr Rozwadowski said the ultimate goal of the IMF programmes is increasing incomes. What is more, the IMF has always recommended that reform programmes envisage measures for protection of those who are most vulnerable to the consequences of the programme's implementation. The programme of the Bulgarian government includes such measures, Mr Rozwadowski said.

He further said the first results of the programme are already tangible with the calming down of the forex market. More results are expected very soon, including lower inflation and interest rates before year's end. Mr Rozwadowski believes the long-term effects of the programme - including a higher GDP must come as early as next year.

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