News from Bulgaria / Feb 5, 96

From: bulgaria@access1.digex.net (Embassy of Bulgaria)

Bulgarian Telegraph Agency Directory

EMBASSY OF THE REPUBLIC OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

5 February, 1996

CONTENTS

[01] BULGARIAN GOVERNMENT READY FOR DIALOGUE ON NATO EXPANSION

Sofia, February 2 (Iva Toncheva of BTA) - The Bulgarian government is ready to join the dialogue on the expansion of NATO after a decision to that effect was taken at an extraordinary closed door sitting today.

In connection with the readiness expressed by the NATO Council of Ministers and conveyed to the representatives of the NATO partner countries in Brussels on January 29, the Bulgarian government places the Foreign Ministry under the obligation to inform NATO that it is ready to join the dialogue on the issues included in the study on NATO's future expansion, Foreign Minister Georgi Pirinski told journalists after today's sitting of the cabinet.

The cabinet appointed a group of experts of the Ministries of the Defence and Foreign Affairs to draw out jointly a draft document to serve as a basis for an enhanced dialogue with NATO representatives. The document should be submitted to the government for approval by mid- March.

"The government has always had a clear stand on NATO," Pirinski said answering a question on the controversy among Bulgarian politicians on Bulgaria's possible NATO membership.

Today's sitting of the government also considered the possibility for Bulgarian participation in the NATO Implementation Force in former Yugoslavia.

Defence Minister Dimiter Pavlov was placed in charge of sending an answer to NATO's Supreme Allied Commander Europe, saying that the request for Bulgaria's participation in the NATO mission is viewed by the Bulgarian government as a recognition of this country's commitment to IFOR. The reply should also say that the government has considered carefully the priorities named by the NATO command, and believes that its views can provide a basis for furthering the dialogue with NATO and the command of the multinational forces to specify Bulgaria's role in the operation.

Taking into consideration the above priorities named by NATO, Bulgaria believes it can provide medical assistance to IFOR be sending a 50-bed field hospital and civilian personnel, allowing IFOR to use the Academy of Military Medicine in Sofia as a strategic reserve. Bulgarian laws provide that the sending of a field hospital should be cleared by Parliament.

The letter to be sent by the Bulgarian Defence Minister will voice the belief that the NATO IFOR will consider carefully Bulgaria's proposal for assistance. The talks on this matter are expected to continue next week.

[02] SOFIA MEETINGS OF BRITISH DEPUTY FOREIGN MINISTER

Sofia, February 2 (BTA) - Meeting with Bulgarian Foreign Minister Georgi Pirinski, Nicholas Bonsor, British Minister of State at the Foreign and Commonwealth Office, voiced satisfaction with the development of Bulgarian-British ties. Britain accepts with satisfaction the recent initiatives of the Bulgarian government for promotion of cooperation in the region as a major factor of stability and security, journalists were told after the meeting by Bulgarian Deputy Foreign Minister Konstantin Glavanakov. Mr Bonsor, who is in charge of the countries of former Yugoslavia, the Commonwealth of Independent States and Eastern Europe, yesterday attended the inauguration of a residence of the British Embassy here.

The major question the Bulgarian Foreign Minister reportedly brought forth at the meeting with the guest was the EU visa blacklist that includes Bulgaria. The guest reportedly showed understanding for Bulgaria's problem and voiced the readiness of Britain for assistance. "I hope there will be more optimistic results from now on," said Glavanakov.

The sides also discussed British investment in Bulgaria, underscoring as an achievement the cooperation with Britain's Rover. The Bulgarian side pledged to provide legal preconditions, such as additional concessions, for attracting more investments here from British companies.

Bulgaria's future membership in the EU and the procedure opened after this country applied officially for membership in Madrid, was also on the agenda of the talks. Foreign Minister Pirinski reiterated Bulgaria's request to have all EU associate members treated on an equal footing. "Britain shows understanding of the motives for our demand and we can expect more specific action to be taken," said Deputy Foreign Minister Glavanakov.

Later today Nicholas Bonsor was received by Bulgarian President Zhelyu Zhelev. Dr. Zhelev briefed the guest on the domestic political environment and foreign policy priorities of this country, stressing the relations with NATO, and some other aspects of the promotion of security in the Balkans, said Presidential foreign policy advisor Kamen Velichkov.

Mr Bonsor said that NATO is the architect of the world peace and Britain remains an active member of the North Atlantic Alliance.

The Bulgarian President named some of the problems this country has in forming its stand on NATO-related matters, Velichkov said implying the diverging views of the President and the ruling Socialist Party on Bulgaria's possible NATO membership. Dr. Zhelev expressed his firm conviction that his cause is right and said a proof of that is the public support of Greece, Turkey and Italy for Bulgaria's possible application for NATO membership, said Velichkov.

At a meeting later today, Prime Minister Zhan Videnov familiarized Mr Bonsor with the Government's intention to implement the structural reform in Bulgaria and step up privatization, the Cabinet's press office said. The two officials assessed in positive terms the interest on the part of large British companies to invest in the privatization of enterprises in various sectors of the Bulgarian economy.

Mr Bonsor expressed his satisfaction with the prospects for British investments in Bulgaria. The British guest assessed in positive terms the efforts of the Bulgarian Government to prevent unfair competition in trade. Mr Bonsor described as encouraging the steps towards trade liberalization and attraction of foreign investment undertaken by the Bulgarian Government.

The British guest stressed his country's willingness to help Bulgaria in its successful integration in the European Union.

[03] INTERNATIONAL SEMINAR DISCUSSES PARTNERSHIP IN TRANSITION

Sofia, February 2 (BTA) - The war is over but the risk of a new conflict still exists, Hassan Muratovic, envoy of the government of Bosnia and Herzegovina, said at the seminar on Europe: Partnership in Transition which opened here today. The two-day forum is co-organized by the Parliamentarians for Global Action organization and the Bulgarian National Assembly. Participating are some 40 delegates of 15 countries of Eastern and Central Europe, of the Council of Europe member-states, the European Parliament and the Organization for Security and Cooperation in Europe. The conference will discuss majority/minority relations and their distinctive features in Eastern European countries. "Bulgaria has no alternative to its integration into united Europe," National Assembly Chairman Blagovest Sendov said in his address to the participants in the forum.

The delegates were received by President Zhelyu Zhelev and Prime Minister Zhan Videnov. During the meeting with Videnov, head of the delegation Moses Katiyunga said that the democratic development of Bulgaria and of the other states in the region has a positive impact on many regions in the world, the Cabinet's press office said.

Videnov familiarized the foreign guests with key parametres of Bulgaria's macroeconomic situation, listing the fourfold decrease in inflation, the results of encouraging employment, the stabilization of the national currency and the 1995 trade surplus. The talks discussed a number of problems of the Bulgarian structural reform. The participants in the meeting paid special attention to issues of the large-scale transboundary projects whose implementation depends on Bulgaria's direct participation, the Cabinet's press office said.

[04] EXPENSIVE CURRENCY DETERRED BULGARIAN EXPORTS

Sofia, February 2 (BTA) - "The behaviour of foreign exchange rates deterred rather than promoted Bulgarian exports in 1995," Roumen Gechev, Deputy Prime Minister and Minister of Economic Development, said in reply to an MP's question in Parliament today.

Chemicals, products of the ferrous and non-ferrous metallurgy, mineral products, machinery and equipment were the highest hard currency earners last year, Gechev said. In terms of US dollars, in January-September 1995 exports of chemicals added up to 483 million, of non-precious metals and articles made of them 355 million, of mineral products 287 million, and of machinery, apparatus and electircal equipment 182 million.

These are the industries that recorded the highest growth in 1995, determining the development of the country's economy as a whole. The financial results of companies operating in export-orientated industries are better than the average, Gechev said adding that the industries which reported largest exports account for the largest shares in production. Power engineering and heat power production are an exception.

In 1995 the gross foreign exchange reserve of the National Bank of Bulgaria (BNB) increased from 899 million US dollars to 1,282 million. At the end of January this year the central bank's foreign exchange reserve fell to a little over 1,000 million US dollars as a result of Bulgaria's foreign debt service payments. This country has never had such a large foreign reserve in the last few years, Deputy Prime Minister Gechev emphasized.

In 1995 the foreign exchange reserve rose by 383 million US dollars, therefore the negligible weakening of the lev cannot be said to have an adverse effect on it, Gechev said. BNB had to intervene on the country's forex market and prevent the steep fall of the lev, he recalled. In November and December 1995 BNB bought hard currency amounting to 89.5 million US dollars and sold 263 million US dollars' worth. In January 1996 BNB bought 31.6 million US dollars and sold 144 million US dollars, Gechev said. He explained that it was necessary to reduce the foreign exchange reserve at the end of 1995 in order to prevent a foreign currency crisis.

In Janaury-June 1995 the convertible currency supply exceeded demand by some 420 million US dollars. After July the demand for hard currency increased, but on the whole in January-November 1995 the amount of foreign exchange currency bought by the commerical banks and BNB from non-financial enterprises and members of the public was larger than the amount sold, Gechev stated.

[05] BULGARIAN, CZECH COMPETITION PROTECTING BODIES TO COOPERATE

Sofia, February 2 (BTA) - A cooperation agreement was signed today between the Czech Ministry of Economic Competition and the Bulgarian Committee for the Protection of Competition. The document envisages exchange of information and launch of joint projects, journalists were told today by the Chairman of the Committee for Protection of Competition, Stefan Neshev.

Bulgaria and the Czech Republic should sign agreements on avoidance of double taxation and on reciprocal protection and promotion of investment, said Czech Minister of Economic Competition Stanislav Belehradek who is paying a several days' visit to this country. He said Bulgarian and Czech companies now can make only separate deals or sign short-term contracts because the owners of the Bulgarian companies put up for privatization are now yet known.

Bulgarian-Czech trade last year amounted to USD 60 million, said the Czech Minister of Economic Competition. It was higher than the 1994 figure and yet the countries have not utilized their full trading capacity.

Yesterday Stanislav Belehradek was received by Deputy Prime Minister and Minister of Economic Development Roumen Gechev. The two discussed opportunities for setting up Czech privatization funds in Bulgaria.

Stanislav Belehradek today was also received by National Assembly Chairman Blagovest Sendov. The two discussed the parliamentary life in the two countries placing an emphasis on economic development and privatization. They identified a need for signing bilateral agreements on avoidance of double taxation and investment protection, said the parliamentary press office.

[06] BUSINESS PRESS

Sofia, February 2 (BTA) - The US dollar strengthened by 0.10 leva on the international forex market yesterday, the press reported. Quotations reached 74.26 leva for US dollar 1, but the US dollar closed at 74.20 leva. During the next few days dealers expect a smooth strengthening of the US dollar by 0.10 leva per day.

The Dutch ABN-AMRO Bank resolved to buy a 1.5 million leva worth block of 500 shares of the Bulgarian Stock Exchange, "Pari" writes quoting ABN-AMRO Bank representative in Sofia Margarita Kaisheva.

Construction Ministry experts inspected the section of the road to Greece through the Makaza pass, "Pari" writes referring to the local administration in Haskovo (Southern Bulgaria). Under an agreement between Bulgaria and Greece a project will be drawn up for the construction of a road connection between Kurdjali (Bulgaria) and Komotene (Greece).

Iliya Pavlov, President of the Multigroup economic group, is in Davos as of Wednesday together with Sasho Donchev, Executive Director of Overgas Inc. (a company affiliated to Multigroup with part of the shares owned by the Gasprom Russian company), "24 Chassa" writes. Pavlov and Dochev allegedly sought assistance for the business projects of Overgas.

The Nestle-Sofia company produced 14,000 tons of goods of 1,300 million leva's worth, "Continent" writes. In 1994 the Nestle Swiss company bought 70 percent of the Sofia sugar plant. Referring to Nestle- Sofia Director General Dimitris Koronakis "Troud" writes that the Swiss company will invest the minimum of 9.1 million US dollars in Sofia- Nestle by the end of 1996.

A Turkish company wants to lease an Airbus A320 of the Balkan Airlines together with a crew and technical personnel for 560,000 US dollars monthly in April-October 1996, "Standart News" writes.

[07] BIMAK: 1995 TOP FOREIGN INVESTOR IN BULGARIA

Sofia, February 2 (BTA) - The Irish-Bulgarian company Bimak Ltd. was named Foreign Investor of the Year by experts of the Ministries of Finance, Trade and Economic Development and the Foreign Investment Agency. It is the first ever winner of the award. Shell - Bulgaria and Kraft Jacobs Suchard are the runners-up.

Bimak, a company extracting and processing non-ferrous metals, invested 8 million dollars in 1995, bringing its total investment since its establishment five years ago to 20 million dollars, and created 100 jobs.

Earlier today Deputy Prime Minister and Minister of Economic Development Roumen Gechev and representatives of the top twenty foreign investors in Bulgaria discussed the foreign investors' problems.

The key issue is to bring Bulgarian legislation in line with EU requirements and offer preferential terms to foreign investors, Deputy Prime Minister Gechev told "Daily News" after the meeting. Subjects for discussion included taxes, customs regulations, guarantees, the protection of foreign companies doing business in Bulgaria and forthcoming legal amendments.

[08] FRANCE KEEN TO COOPERATE WITH BULGARIA

Sofia, February 2 (BTA) - France will donate 3.5 million francs to Bulgaria, it emerged after a meeting today between Deputy Prime Minister and Minister of Economic Development Roumen Gechev and French Ambassador Marcel Tremeau. The funds will go towards the development of a stock exchange and the establishment of a central securities depositary, the Government press office said.

Ambassador Tremeau delivered an official letter from French Minister of the Economy and Finance Jean Arthuis, informing Bulgaria of the donation and stressing France's desire to intensify economic cooperation and deepen economic dialogue with this country. France is ready to take part in projects supporting and accelerating reforms in Bulgaria, more specifically privatization, the letter says.

[09] POLICE DETAINS ATTACKERS OF CHINESE DIPLOMAT

Sofia, February 2 (BTA) - Sofia police officers today detained five teenagers who, in their own confessions, on January 27 attacked Li Chun Sheng, first secretary at the Chinese Embassy in Sofia, and his wife. The assailants beat and kicked the Chinese diplomat and pushed his wife unprovoked.

Two 15-year-old youths, another two 16-year-olds and one 18-year- old committed the crime, Deputy Chief of First Regional Police Department in Sofia Lieutenant-Colonel Zahari Zahariev said. The five attackers attend different schools in Sofia. Asked by a BTA reporter whether the assailants have similar crimes in their records, Zahariev said that the question is being investigated but the answer is most likely affirmative.

The police officers arrested the skinheads at their homes. The youths have records at the delinquency centre.

The police today detained another group of skinheads who reportedly attacked foreigners and Gypsies in Sofia, Zahariev said.

[10] PM VIDENOV ON DIALOGUE FOR NATO EXPANSION

Varna, February 3 (BTA Correspondent) - A document which is to serve as a basis for an intensified dialogue with NATO will be drafted by March 15, Bulgarian Prime Minister Zhan Videnov told a news conference in Varna today.

"Bulgaria will insist, as an integral part of the future system for collective security in Europe, that the problems of the Balkans be taken into consideration in Euro-Atlantic and global dimension. If some believe that security in the Balkans may be guaranteed by permanent presence of international military units, either of the United Nations or of NATO, they cherish pernicious illusions," Videnov stated.

He outlined the following sensitive for Bulgaria issues: there have never been foreign troops or mass destruction weapons, especially nuclear ones, on the country's territory for a longer period of time under international agreements; Bulgaria has never sent armed units abroad to take part in international operations; the country's budget for the military filed was never as high as that of some of the members of international military and political organizations.

[11] DEPUTY PM GECHEV LEAVES FOR LONDON

Sofia, February 4 (BTA) - Deputy Prime Minister and Minister of Economic Development Roumen Gechev went on a business visit to Great Britain at the invitation of the British Government. The visit will last till February 8.

Gechev's program envisages meetings with Lord Fraser of Carmyllie, Minister of State for Trade and Industry, Paymaster General David Heathcoat-Amory, Nicholas Bonsor, British Minister of State at the Foreign and Commonwealth Office and MPs of the ruling Conservative and the opposition Labour parties.

In his capacity as a chairman of the organizing committee for the April 1996 session of the European Bank for Reconstruction and Development (EBRD) in Sofia, Gechev will meet with the bank's President Jacques de Larosiere to brief him on the preparation of the session. The two will discuss relations between Bulgaria and EBRD.

"I, personally, am much more interested in what the bank will do about Bulgarian economy," Minister Gechev said upon departure, answering a question about the highlights of the forthcoming talks.

Gechev is accompanied by representatives of state-owned and private companies. On February 5 and 6 the delegation will take part in conferences on: "Business with Bulgaria", organized by the London and Birmingham chambers of commerce. British businessmen will be familiarized with the conditions for investing in Bulgaria, the tendencies in the country's economic development, the most promising branches and the possible preferences for foreign investors.

Energy Committee Chairman Konstantin Roussinov will discuss with British partners issues related with the reconstruction of Bulgaria's energy complex and with some large structure projects on which negotiations are in progress with Russia and other interested countries, Gechev said.

Nataliya Ilieva reported exclusively for BTA from London that the British business circles assess the visit as timely and note that Bulgaria has not made sufficient efforts to present itself as an attractive-for- business country.

The agreement for stimulation and reciprocal protection of investments signed in December 1995 is expected to give new impetus to the trade and economic relations between Bulgaria and Great Britain. The fact that the British Government appointed an officer in charge of the export to Bulgaria at the Ministry of Trade and Industry shows that it has serious intentions to promote bilateral trade and economic ties, Ilieva said.