News from Bulgaria / June 19, 95

EMBASSY OF THE REPUBIC OF BULGARIA

BTA - BULGARIAN TELEGRAPH AGENCY

BULLETIN OF NEWS FROM BULGARIA

JUNE 19, 1995


CONTENTS

  • [01] PRESIDENT ZHELEV CABLED CONDOLENCES TO GREEK PRESIDENT

  • [02] PRESIDENT ZHELEV VISITS KURDJALI

  • [03] BULGARIAN GOVERNMENT WANTS MALKO TURNOVO - DEREKOY

  • [04] CABINET TAKES SPECIAL MEASURES

  • [05] FEASIBILITY STUDY ON BOURGAS- ALEXANDROUPOLIS

  • [06] BULGARIA - GREECE

  • [07] BULGARIA - IRAN

  • [08] MOLDOVAN DEFENCE MINISTER ENDS VISIT

  • [09] OPPOSITION LEADERS SIGN JOINT COMMUNIQUE ON COOPERATION

  • [10] BUSINESS PRESS

  • [11] FOREIGN MINISTER PIRINSKI VISITS YUGOSLAVIA


  • [01] PRESIDENT ZHELEV CABLED CONDOLENCES TO GREEK PRESIDENT

    Sofia, June 16(BTA) - Bulgarian President Zhelyu Zhelev has cabled condolences to Greek President Kostis Stefanopulos on the death toll and the devastation caused by a severe earthquake.

    [02] PRESIDENT ZHELEV VISITS KURDJALI

    Kurdjali, June 16 (BTA) - Today President Zhelyu Zhelev arrived on a visit to Kurdjali, a region in Southern Bulgaria with a compact population ofethnic Turks. The Head of State met local administrators todiscuss the problems of people living there. Some of themunicipalities in the region are among the most backward andpoorest in the country, the President's advisers said, having visited the area at the end of May 1995. The migration of ethnic Turks to Turkey continues (after the exodus in the middle of the 1980s prompted by the so-called "regeneration process", i.e. the assimilation campaign launched by the totalitarian regime)because the economy here is ruined, local mayors said at thetime. "No one of the state institutions has the right to beindifferent when a border area is being depopulated for socialreasons alone. I am here because as Head of State I have no right to be indifferent," President Zhelev told journalists inthe town of Kurdjali. Together with MPs elected asrepresentatives of the region, President Zhelev heard localeconomic executives, administrators and intellectuals. Zhelev explained his interest and concern about the problems of theregion with the history of the local population that is full of hardships and highly appreciated the wisdom of common people who did not allow any threat to civil peace as a result ofinter-ethnic conflicts. "If we make a comparison with 1989-1990,the inter-ethnic confrontation in the region has already beenovercome, but now there are other problems - they are relatedwith the transition," President Zhelev said. "The brain-drain ofthe region is continuing, which hinders both the implementation of reform and the economic and social development of the area,"the Head of State said. He commented on the crisis in tobacco growing - a traditional means of living in the area, and thesoaring rates of unemployment in some local municipalities,which are much higher that in any other part of the country.

    "Under the Constitution the State is obliged to provideconditions for the balanced development of the separate regionsand to give assistance to the local administration by pursuing adequate financial, lending and investment policies," President Zhelev stated. "The enterprise and responsibility of the peoplein Kurdjali will help the region out of the crisis and the first signs of recovery can already be seen," he said and promised his firm, unreserved support for any activities aimed to produce economic recovery of the area. The Mayor of Kurdjali, Ismet Saraliyski, told President Zhelev about the desire of the local population to adopt a special law providing economic protection for similar regions.

    On the second day of his visit to the Kurdjali region in Southern Bulgaria, President Zhelyu Zhelev said the regeneration process is one of the most shameful moments in Bulgaria's latest history and the culprits must stand trial. In 1984-85, during what is generally known as "the regeneration process", Bulgarian Turks had their Muslim names forcibly changed with Christian ones. President Zhelev was firm on his stand on families living separated in Bulgaria and Turkey. According to him, children who for one reason or another remained in Bulgaria when their families moved to Turkey, should join their parents unhindered. Since the summer of 1989, 45% to 50% of the residents of theseven municipalities in the Kurdjali region have joint the mass exodus to Turkey. The unemployment rates here are among the highest for this country. Together with the MPs and mayors ofthe region, Dr. Zhelev took a personal commitment to press other government institutions for finding a solution to the acute social and economic problems facing the area: unemployment, poor infrastructure, inadequate supply of water for irrigation, the purchase of tobacco from local growers. According to President Zhelev, handling these problems will curb emigration and mak ethe region one of Bulgaria's flourishing border areas. Activists of the ethnic Turks' Movement for Rights and Freedoms (MRF),boasting considerable influence here, said they would back Dr. Zhelev if he chooses to run for a second term as President. Dr. Zhelev visited a military unit in the Tihomir village and metits officers and border guards. In the Mogilyane village, the Head of State laid flowers at the monument to 18-months-old Tyurkyan and another two village residents, victims of the regeneration process. Dr. Zhelev said he was happy to see that Bulgarians and Turks here have overcome the pain and live together. Later the President met officials of the Momchilgrad municipality and laid a wreath at the monument to 10 servicemen who drowned 5 years ago in the swollen waters of the Vurbitsa River. Attending was also Defence Minister Dimiter Pavlov. Laston Dr. Zhelev's two-day agenda was a meeting with officers ofthe Kurdjali and Momchilgrad garrison.

    [03] BULGARIAN GOVERNMENT WANTS MALKO TURNOVO - DEREKOY

    Sofia, June 16 (BTA) - The Bulgarian cabinet insists that the Malko Turnovo - Derekoy checkpoint on the Bulgarian-Turkish border be returned to full normal operation. The issue will be tabled for discussion during the forthcoming visits to Bulgaria of TurkishForeign Minister Erdal Inonu in late June and of TurkishPresident Suleyman Demirel in early July, Prime Minister ZhanVidenov said in Parliament today in reply to a question by an MPof the ethnic Turks Movement for Rights and Freedoms (MRF). The Malko Turnovo - Derekoy border checkpoint was opened in March 1970 and was used by tourists, cars and cargo transport until 1985. This border-crossing point provides an extremely suitable link between Bulgaria and Turkey, between Southeastern and Northern Europe and the countries of the Middle East andSouth-West Asia. During the campaign for forcible assimilation of ethnic Turks in 1984-85, the relations between Bulgaria and Turkey suffered a set-back and in March 1985 the passage of cargo transport through this border checkpoint was suspended.

    The border crossing is currently open only for tourists and vehicles weighing up to three tonnes. The possibility to reopenthe facility for heavy trucks was discussed during official Bulgarian-Turkish contacts in 1992-95. "The Government is concerned about the problem, it is familiar with its roots and knows all details already since the problem emerged and spares no effort in finding a solution given the existing political, economic and legal prerequisites," Bulgarian Prime MinisterVidenov said. In his view, in the current situation the matter needs political settling, rather than handling technical,financial or any specific statutory hurdles between the two countries. The Prime Minister added that the full re- opening ofthe checkpoint will be decided on a reciprocal basis. "We hope that the Turkish side will take a positive stand on the issueduring the visit of the Turkish Foreign Minister Erdal Inonu and the Turkish President Suleyman Demirel," Videnov said. Bulgaria will raise the issue at the session of the Bulgarian-Turkish Transport Committee, scheduled for July and will insist for adecision, the Prime Minister said. "In our opinion, there are enough prerequisites and high degree of probability that a practical solution to the problem can be reached," according to Videnov.

    [04] CABINET TAKES SPECIAL MEASURES

    Sofia, June 16 (BTA) - The Bulgarian cabinet is taking measures to handle financial pyramids that only in Varna left around 70,000 cheated depositors. A parliamentary commission of inquiry was set up to investigate the roots and size of Ponzi-scheme scams, that werefirst reported last autumn. When their ranks recently started togrow uncontrollably, cheated depositors rallied in Varna, on theBlack Sea, to demand the cabinet's resignation. There were more protests near the Parliament in downtown Sofia today. Answering an MPs' question, Prime Minister Zhan Videnov said the cabinet has taken measures to identify all sole traders and commercial partnership in this country raising capital through Ponzi schemes. Information is being collected for their activity in Bulgaria and abroad. Among the most effective measures withinthe powers of the executive is the launch of joint audits by theInterior Ministry and taxation authorities into the taxes of all such companies. The audits, however, rarely help prevent financial scams because most of the pyramids operate incompliance with the taxation regulations, the Prime Ministerwent on to say. The speedy informing of the Prosecutor General's Office, the Finance Ministry and the central bank whenever illegal practices are identified is also part of the efforts to handle the situation. Zhan Videnov further said the combatagainst financial pyramids would get more effective afterParliament passes the cabinet- sponsored bill on securities and exchanges. Amendments to the Penal Code to take effect some time soon, will criminalize banking and foreign exchange transactions violating the effective regulations, including financial pyramid operations. Financial pyramids in Bulgaria operate in several stages: registration as a sole trader of commercial partnership,an aggressive promotion campaign for getting loans under the Obligations and Contracts Act or for sale of quasi-securities, payment of interest rate for a brief period to attract doubtful investors, and embezzlement of the capital already raised. The owners of pyramids that have collapsed recently fled Bulgaria with all the money they have collected. The Prime Minister further told Parliament that the launch of wide-scale auditswill help crack down on financial offenders. It, however, is not the most effective measure to combat this phenomenon and should therefore by assisted by the judiciary. Representatives of the initiative committee of protesting victims of Ponzi schemes were received today by National Assembly Chairman Blagovest Sendov and were heard by the parliamentary ad hoc committee of enquiry.

    Mr Sendov said later that the legislative power can do verylittle to return the investors their money. He voiced a hope that the National Assembly will pass legislation intended to prevent the occurrence of such phenomena in the . The calculated losses of investors in Ponzi companies amount so far to over 1,500 million leva, according to preliminary figures of the committee of enquiry. The defrauded investors say that in Varna alone, 50,000 people have lost between 4,000 and 5,000 millionleva. The Chairman of the committee of enquiry Peter Dimitrov said that all tip-offs for involvement of local administrative authorities and police officers in pyramid schemes will be checked and the prosecutor's office will be informed about any uncovered abuses. Committee representatives will make on- site inspections on complaints from investors in bankrupt companies. Meanwhile the Regional Presocutor in Plovdiv (Southern Bulgaria) confirmed his ban on the sale of coupons of the local branch of the notorious Russian company MMM of Sergei Mavrodi, for failure to produce the required licence issued by the Finance Ministry.

    [05] FEASIBILITY STUDY ON BOURGAS- ALEXANDROUPOLIS

    Sofia, June17 (BTA) - Important decisions were taken for the Bourgas -Alexandroupolis pipeline project in Moscow on June 15, said the cabinet's press office. Officials of Bulgaria, Greece and Russia considered all aspects of the project in compliance with the agreements reached by the three countries' Foreign Ministries on this issue. The officials agreed that the feasibility study on the pipeline project should continue and decided that a TransBalkan Pipeline multinational company be set up as a holding of Bulgarian, Russian and Greek companies. The founders of TransBalkan Pipeline will launch negotiations with potential oil producers and consumers to specify the volume of supply. Ina view of the keen interest in the project on the part of the European Union, Brussels has been briefed on the results of the negotiations and EU financing is now expected for the construction of the pipeline. With the implementation of the project, Bulgaria will get incorporated into a major transborder network for transportation of oil products and offers this, aswell as the other countries in the region, chances for tangible economic benefit.

    [06] BULGARIA - GREECE

    Sofia, June 16 (BTA) - Bulgarian Prime Minister Zhan Videnov will be on a two-day official visit to Greece on June 19 and 20. "I think there is good understandingon the questions of mutual interest," Bulgarian Foreign MinisterGeorgi Pirinski said a few days ago on returning from Athens,where he and his Greek counterpart Karolos Papoulias discussedPM Videnov's forthcoming visit. There are no problems in therelations between the two countries, the only difference is inthe approach to the settlement of some of them, Bulgarian and Greek statesmen usually state after every high-level meeting,not missing to stress the good neighbourly relations betweentheir countries. A similar assessment was made after the latestvisit by the prime minister of Bulgaria to Athens in 1992. At the time the cabinet was headed by Filip Dimitrov of the anti-communist coalition of the Union of Democratic Forces. "The sole issue we have differences about is the recognition of theex-Yugoslav republic of Macedonia," the sides said at the time.

    Bulgaria was the first country which recognized Macedonia's independence on 15 January 1992, though not recognizing the existence of a Macedonian nation and a Macedonian language. Greece protested against the name of the new republic already at that time. Greece supported Bulgaria's initiative for lifting the embargo on Serbia and Montenegro in parallel to finding a solution to the crisis in Yugoslavia. At the meeting of foreign ministers of the countries participating in the Black Sea Economic Cooperation project, held in April 1995 in Athens, the foreign minister of Bulgaria, Greece, Moldova, Russia and Ukraine came out with a joint statement on the issue. The prime minister of Greece, Konstantinos Mitsotakis, visited Bulgaria in March 1993. An agreement on reciprocal protection of investments was signed during the visit. The prime ministers of the two countries considered the possibility of opening new border checkpoints and a project for the construction of a trunk road and a railway connecting the Danube with a Greek port. Bulgaria and Greece signed a Treaty of Friendship, Good Neighbourly Relations, Cooperation and Security in October 1991. In 1994 Bulgarian-Greek trade added up to 530 million dollars, recodinga 5-fold increase compared to 1989. Bulgaria ran a trade surplus with Greece. There are 573 Greek companies registered in Bulgaria in 1994. Greece tops the list of companies registered in Bulgaria, as well as the list of the number of investment contributions. A total of 573 investment contributions, totalling 33 million dollars, were made by Greek businessmen in Bulgaria in 1994. The interest of the business circles in the two countries is reciprocal. A two-day meeting of businessmen from Southern Bulgaria and Northern Greece took place in Haskovo in April this year. Some time ago the ministries of labour and social affairs reached an agreement regulating the employment of Bulgarian seasonal workers in Greece to prevent illegal migration for that purpose.

    [07] BULGARIA - IRAN

    Sofia, June 16 (BTA) - Deputy Prime Minister and Minister of Foreign Economic Cooperation Kiril Tsochev received Deputy Foreign Minister of the Islamic Republic of Iran Mahmud Vaesy, who is on a working visit here. On the agenda were principal issues of the bilateral cooperation andthe preparations for the forthcoming visit to Bulgaria of anIranian governmental delegation next month, lead by the firstVice President of Iran. The two parties voiced intentions tointensify the traditional good contacts. They planned to promote partnership on the basis of increased commercial exchange and agreements, reached in transport connections. The two officials also discussed the key directions in the preparations for the upcoming tenth Bulgarian-Iranian session to be held in Tehran bythe end of the year.

    [08] MOLDOVAN DEFENCE MINISTER ENDS VISIT

    Sofia, June 16 (BTA)- "Under Moldova's Constitution membership in NATO is banned," the Moldovan Defence Minister, Major General Pavel Creanga, saidin reply to a question about his attitude about the Atlantic structures at today's conference with Blagovest Sendov, Chairmanof the Bulgarian National Assembly. "Nevertheless I support thePartnership for Peace initiative (which Bulgaria joined inFebruary 1994)," he said. The sides focussed on the legalframework of reforms in the armies of the two countries. Theguest gave Mr Sendov the text of Moldova's military doctrine.

    The Bulgarian National Assembly Chairman confirmed hisforthcoming visit to Moldova. Major General Creanga' two-dayofficial visit to Bulgaria aimed to promote relations betweenthe defence ministers of the two countries. The agreement oncooperation in the military sphere between the defenceministries of Bulgaria and Moldova signed by Bulgarian Defence Minister Dimiter Pavlov and his Moldovan counterpart provides for the exchange of experience in military legislation, thetraining of personnel and the exchange of military observersduring exercises. Major General Creanga had also a meeting withNikolai Kamov, chairman of the parliamentary National SecurityCommittee. The sides discussed the problems of the armies ofBulgaria and Moldova in the period of transition. Moldova's Defence Minister left for his country this afternoon.

    [09] OPPOSITION LEADERS SIGN JOINT COMMUNIQUE ON COOPERATION

    Sofia, June 16 (BTA) - The leader of the opposition Union of Democratic Forces (UDF) Ivan Kostov, of the Popular Union (of Agrarians and the Democrats) Anastasia Moser, and the ethnic Turks' Movementfor Rights and Freedoms (MRF), Ahmed Dogan, today signed a jointcommunique on cooperation in the forthcoming local elections. The national leadership of the UDF, Popular Union and MRFapprove the memorandum on the basic principles of cooperation inthe local elections, signed on June 9, 1995, the communiquesays. UDF leader Kostov hailed today's signing of the communiqueand said there are already two preconditions for theopposition's victory in the local elections: operating localparty structures and interaction among the parliamentaryopposition forces. Kostov further voiced his hope that theopposition will do well in the local elections so as to preventwhat he described as a Socialist offensive in the localgovernment. "We embark on the road of cooperation with sincereintentions and hopes for future prosperity of the nation,"Popular Union Co-Chairperson Moser said. MRF leader Dogandescribed the event as a new start toward a united oppositionwhose ultimate goal is good performance in the upcoming localelections.

    [10] BUSINESS PRESS

    Sofia, June 16 (BTA) - The need of combining mass and cash privatization calls for the introduction of a new model of managing denationalization, the chair of the Privatization Agency Supervisory Board, Dimiter Steffanov, tellsan interviewer of "Douma". Steffanov believes a new body withinthe existing government structure should be placed in charge ofthe mixed privatization model. According to the interviewee, anemphasis should be placed on demand; greater importance is nowattach to supply and the drawing up of lists of enterprises putup for privatization, Steffanov says. He goes on to say thatprivatization lists should be composed taking into considerationthe stand of the company's staff and managers, and demand. Theproceeds from denationalization in 1994 were 4,000 million levaand are expected to reach 14,000 million in 1995. Losses overthe past three years amounted to 100,000 million leva. Theliabilities to the public purse are over 50,000 million leva,and the bad debts over 150,000 million, Steffanov goes on tosay. According to him, the new principles of privatizationmanagement should be based on the programmes for smallprivatization, for sale of major enterprises, management andemployee buy-outs, debt-for-equity swaps, mass privatization. Greater coordination in denationalization could be achievedthrough stronger centralization.

    A check of the customs authorities found that over 3,000million leva worth of goods were illegally exported via theKoulata border crossing in 1994, writes "Demokratsiya". Most ofthe goods were exported without payment of excise and customsduties. Statements were drawn up for illegal transactionsamounting to a total of 20 million leva.

    The State Fund for Reconstruction and Development (SFRD)extended a 2,000 million leva loan to the National ElectricityCompany (NEC) for upgrading the Kozlodui Nuclear Power Plant, onthe Danube, "24 Chassa" writes citing NEC chief Dyanko Dobrev. The funds will be spent for purchasing spare parts and equipmentfor the power plant. A US$ 34 million SFRD loan was extended tothe Kremikovtsi metallurgical works, near Sofia, another DM 40million one to the Glavbolgarstroy company, "24 Chassa" says.

    Sofia, June 18 (BTA) - 18 private insurers set up a union. It is an alternative to that of state-owned insurance companiesincluding the State Insurance Institute that held a monopoly inthis business until recently. The new union's statutes allowsthe admission of members with at least 51% private interest. Themembers of the union demand access to the drafting of aninsurance bill.

    William Leth of the Civil Democracy Corps (CDC) told journalists in Dobrich, Northeastern Bulgaria, that in Bulgariait is more effective to work with private companies than withstate-run ones. Leth is also director of the CDC programmes forEastern Europe. 25 CDC volunteers have already come to thiscountry this year and another 15 are expected to help Bulgaria'stourism, light industry and construction.

    Over 60 bottles of lubricating oil produced by the Plamaoil refinery of Pleven will go to Macedonia by the end of thismonth, BTA learned from its correspondent in Pleven, NorthernBulgaria. Plama lubricating oil will be delivered directly to120 filling stations in Macedonia; another 80 filling stationsare supplied with it by dealers.

    The Sofia City Council decided to ratify contracts for thepurchase of 30 Mercedes buses at DM 523,300 and 30Bulgarian-made Chavdar buses at US$ 235,000. The purchase willbe settled by the end of 1999.

    Gabrovo, Central Bulgaria, launched the construction of acentre for transfer of know-how and innovations, said BTA'slocal correspondent. The construction was undertaken byBulgarian companies. It will continue for about an year withDutch government financing.

    The Assenova Krepost company of Assenovgrad, SouthernBulgaria, within a month will introduce a new German technologyfor production of polypropylene packings, said BTA's localcorrespondent. The new product will allow to have longer shelflife of foods, medicines and cosmetics.

    The Khan Omourtag company of Shoumen, Northeastern Bulgaria, this year will produce over 660 sq m of colour tiles. 90% of this company's output has already been marketed in over10 countries on four continents. Its major partner is Germany,ahead of France, Britain and the Netherlands.

    Projections set this year's export of the Shoumensko Pivobrewery of Shoumen at over 40 million l, making up 10 to 20% ofthe brewery's annual output, BTA learned from its localcorrespondent. Among the traditional partners of Bulgaria'soldest brewery are Georgia, Russia, Ukraine, Moldova and otherCIS countries. Over 6 million bottles of beer this year will beexported to Morocco. Shoumensko Pivo beer will also go to China,where, just like in Morroco, the original 0.33 l bottles arepreferred to the 0.5 l ones, popular in Bulgaria and the CIS.

    [11] FOREIGN MINISTER PIRINSKI VISITS YUGOSLAVIA

    Belgrade, June 18 (BTA spec. cor. Raina Chobanova) - Bulgarian Foreign Minister Georgi Pirinski today started an official visit to Yugoslavia at the invitation of his Yugoslav counterpart Vladislav Jovanovic. Regional stability in the Balkans, the cooperation opportunities after the suspension of the UNsanctions against Serbia and Montenegro, and bilateral relationswill be in the focus Pirinski's meetings with the hosts. At the Gradina check point on the Bulgarian-Yugoslav border, the Bulgarian Foreign Minister was welcomed by the chairman of the Dimitrovgrad municipality, Nikolai Stoyanov. Stoyanov voiced his hope that Georgi Pirinski's visit to Yugoslavia will give a new impetus to bilateral relations. "Being Bulgarians, we are particularly interested to have a border that unites, instead of divide, us. I am convinced that the Bulgarian minority will be a bridge to link the two countries to the interests of the two nations, the Balkans as a whole, and our minority," he went onto say. Asked by Foreign Minister Pirinski to tell about thelife of Bulgarians in the region, Stoyanov said a that 1991 census showed that over 52% of the 13,000 municipality residents are Bulgarians. They live a difficult life because the international sanctions have seriously affected industry and the rising unemployment resulted in mass migration from the region. Over 42 villages in the municipality have been deserted by their residents. Before the sanctions were introduced, the municipality provided jobs for some 5,000 people, but now manyof them are unemployed. The sides discussed a host of other issues, including education, culture and information. "Bulgaria sees allns. "Being Bulgarians, we are particularly interested to have a border that unites, instead of divide, us. I am convinced that the Bulgarian minority will be a bridge to link the two countries to the interests of the two nations, the Balkans as a whole, and our minority," he went onto say. Asked by Foreign Minister Pirinski to tell about the life of Bulgarians in the region, Stoyanov said a that 1991 census showed that over 52% of the 13,000 municipality residentare Bulgarians. They live a difficult life because the international sanctions have seriously affected industry and therising unemployment resulted in mass migration from the region. Over 42 villages in the municipality have been deserted by theirresidents. Before the sanctions were introduced, themunicipality provided jobs for some 5,000 people, but now manyof them are unemployed. The sides discussed a host of otherissues, including education, culture and information. "Bulgaria sees all expatriates as a presence of the Bulgarian national consciousness, the Bulgarian spirit and culture in other countries. That is why we seek to preserve them as an element inthe culture of the nations with which they live," Foreign Minister Pirinski said. Late this afternoon Pirinski arrived in Belgrade. He was welcomed by Yugoslav Foreign Minister Vladislav Jovanovic, who gave a dinner in his honour. The Bulgarian Foreign Minister will be received by Serb President Slobodan Milosevic tomorrow and by Yugoslav Prime Minister Radoje Konticon Tuesday.


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