News from Bulgaria / Apr 22, 96

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

Bulgarian Telegraph Agency Directory

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

22 April, 1996

CONTENTS

[01] BULGARIAN PM VIDENOV RECEIVES EBRD PRESIDENT

"EBRD's policy towards Bulgaria will not change significantly, but we shall do our best to make this policy serve better your country's needs," Mr de Larosiere said for "Daily News" after his meeting with PM Videnov. The bank can work for Bulgaria very efficiently, EBRD President believes. ECU 200 million have already been put into operation in this country, he reminded and said that there is still a lot more that can be done. Currently the EBRD is drafting various projects connected with Bulgaria in the field of mass privatization and infrastructure. The Government's programme for rehabilitation of the banking system and the structural adjustment programme were not on the agenda of the meeting. "We discussed various projects, including projects in the banking sector, but we did not go into details on the reconstruction of the banking system," Mr de Larosiere said.

EBRD's President expressed satisfaction with what he saw in Bulgaria last week. In his view the bank's annual meeting in Sofia, which gathered more than 4,000 guests, is a great technical achievement for Bulgaria. Mr Larosiere voiced conviction that the measures which the Bulgarian Government has undertaken and the reforms in the country will result in the nearest future in the signing of concrete contracts with the international financial institutions. In late afternoon today Mr de Larosiere departed from Bulgaria.

[02] FINAL PLENARY MEETING OF WORLD BANK REPRESENTATIVES

[03] BULGARIA SHOULD FOCUS ON DIALOGUE WITH EU

The process of EU enlargement is equally difficult both for countries like Bulgaria and for the Union itself, Ferraris noted. According to him, Europe has not yet got used to its new borders due to the difficulties in adjusting its economy to a new, wider range. "Apart from administrative problems, there are difficulties in providing and protecting the stability and security. The efforts to this effect not only of politicians, diplomats and businessmen, but also of all citizens are of particular importance," Ferraris stated.

In its capacity as holder of EU presidency, Italy approves Bulgaria's willingness to become a guarantee of security in Southeastern Europe and the country's initiative for a meeting of the foreign ministers of the region in Sofia, Luigi Vittori Ferraris stated. "What is interesting in the Bulgarian position and what concerns Italy in particular is that the will for stability and security should emerge in the region, itself, and not be imposed from the outside," he added.

Problems of bilateral interest between Bulgaria and Italy may be discussed and resolved, but they should be considered from another point of view as well, Ferraris stated. "The new point of view is made necessary by the formation of new European structures which require maintaining of bilateral relations on the basis of regular consultations. This attaches to my visit here particularly high importance," he stated.

"Italy and EU praise Bulgaria's role in building up a new united Europe in a moment when Russia is considered not as enemy, but as partner of the Union, Ferraris said. According to him, relations with Bulgaria could promote dialogue between EU and Russia, taking into account that Russia is against NATO's enlargement, but not against EU enlargement. Ferraris highly assessed Bulgaria's document on enhanced dialogue with NATO, handed in NATO's headquarters on April 10, 1996. The document treats three major points: how will NATO's enlargement reflect on Europe's overall security structure, including relations among NATO, the Organization for Security and Cooperation and Europe, EU and the Western European Union; relations between NATO and Russia and NATO's enlargement and the mechanisms of the organization as a whole.

[04] LOSS-MAKERS TO BE CLOSED DOWN IN MAY

Statistics show that 3,284 enterprises closed 1995 with a profit. and 2,444 incurred losses totalling 52,700 million leva. In 1992-1995 losses in the real economy sector reached 162,000 million leva. About 60 percent are non-performing debts, as a result of which banking is also in a crisis.

"The structural reform must not be delayed any more," Prof. Angelov said. "Putting off reforms only pushes up their costs. If no drastic measures are urgently taken, things will get worse, the banking system will collapse and there will be a new upsurge of inflation," Prof. Angelov warned.

The list of enterprises subject to closure will be finalized in one or two weeks. Their winding up should begin in May this year. There are 106 entities on the liquidation list at the moment. They account for a loss of 6,700 million leva in 1995. Largest are the losses incurred by industrial enterprises, 5,400 million leva. The worst losers are in the ferrous and non-ferrous metallurgy (with losses amounting to 504 million and 324 million leva respectively), mechanical engineering (722 million leva), electronics (563 million leva), the chemical industry (180 million leva), the textile industry (452 million leva).

These enterprises employ 17,000 people. On becoming redundant, they will be paid compensations with funds provided by the World Bank which undertook to help along the process by floating 80- 85 million dollars.

Fifty eight enterprises, which posted a loss of 28,600 million leva, will enter the Government's rehabilitation list. The measures applied are expected to cut their losses down to 50 percent. Rehabilitation controls include the isolation of loss-makers from banks, a scale-down of operations, rechanneling of resources, a search for new markets and cuts down of staff. The rehabilitation programme will cost 300 million dollars, economists say.

"The first positive results of the rehabilitation programme can be expected by mid-1997; there will be a most tangible effect in 1998," Prof. Angelov said. In his opinion, however, if the measures do not produce the expected effect, part of these enterprises will also have to be closed.

Besides the radical measures aimed to improve the real economy, it is planned to rehabilitate banking. The list of state-owned banks subject to closure will become known next week. For the time being experts are unwilling to name the banks or enterprises that will be wound up. "It's all too delicate, we shouldn't be in a hurry," Ivan Angelov said.

According to Prof. Angelov's projections, it is possible to conclude arrangements with the international financial institutions by the middle of this year. The funds will be received immediately, provided the Government takes real action for the restructuring of the economy and the rehabilitation of banking.

[05] BULGARIAN P.M. CABLES CONDOLENCES TO LEBANESE COUNTERPART

[06] PRESIDENT ZHELYU ZHELEV IN SHOUMEN

Meeting with the local media, he said the Bulgarian Socialist Party had failed to name a single feasible candidate for the presidency; the election of a Socialist president would isolate Bulgaria from democratic Europe. The President went on to say that the BSP has not yet evolved into a Western-style party.

Addressing the Shoumen public, Zhelev said the Government and the leftist majority in Parliament have slowed down privatization and the land reform. Zhelev sharply criticized the BSP and the Government on its lack of a clear-cut position on NATO membership.

The President also met with leaders of political parties sitting on the city council and activists of the five parties which were the first to put up his candidacy for the presidency.

[07] BULGARIAN-GERMAN CONTACTS

Kostantin Glavanakov also met with the Chairman of the Bulgarian-German parliamentary friendship group Gernot Erler, MP of the Social Democratic Party of Germany in the Bundestag and with the MPs of the Christian Democratic Union Klaus Franke and Schmaltz. They discussed the European integration processes and the establishment of a Bulgarian-German Forum due on April 22 in Bonn, which Bulgarian Foreign Minister Georgi Pirinski has been invited to attend.

In the meantime Gernot Erler received a written answer from the Federal Government to his inquiry of April 2, 1996 about Cabinet measures to drop Bulgaria from European Union visa black lists. The answer says that for the time being the removal of Bulgaria from visa list is considered premature by all members of the Union. The Federal Government shares this view. Germany, however, as a party to the Schengen agreement, recently introduced visa-free entry for holders of Bulgarian diplomatic passports. The answer also says the Federal Government appreciates Bulgaria's efforts to bring its visa policy into line with European standards. The EU nations agree on the need to closely follow Bulgaria's further social-economic development and its immigration visa policy. The EU member countries and Bulgaria, as well as other associated countries, have pursued a structured dialogue in these issues. The visa policy toward Bulgaria is continuously discussed in the framework of the Schengen agreement, although an independent decision by the Schengen partners cannot be expected, as a result of the effective EU decision.

[08] BUSINESS NEWS BRIEFS

Ten British companies, members of the British Consultancy Bureau, arrive here next week to meet potential partners. On April 23 the companies will host a seminar on: "Success Through Partnership", British Embassy in Sofia said. The British companies, Sir William Halcrow & Partners Ltd, Murtz and McLylon, Power Consult, Quality and Safety Service Ltd, British Nuclear Fuels and others, will be presented at the seminar. The event will be attended by Bulgarian companies in power engineering, transport, environment, construction, etc.

A one-month management and marketing course, organized with the financial support of the Austrian Chamber of Commerce, ended in the town of Sliven. The 11 students who took successfully the theoretical course will receive a 10-day training in Austria.

The Austrian Creditanstalt-Bankverein will purchase the enterprise for the production of metal-cutting tools and measuring instruments in Gabrovo (Central Bulgaria) for the Austrian giant, Plansee. Through the mediation of this bank the Tsarevichni Prodoukti company was sold to the Amilum Belgian company. Creditanstalt- Bankverein will probably take part in the privatization of the Sodi chemical plant in Devnya (Northeastern Bulgaria).

Samples of the Almous beer, made in the town of Lom, were sent to Belgium for the 35th edition of the Monde Selection world exhibition of foodstuffs. In 1995 the Lom brewers won a bronze medal in the Belgian exhibition.

Mr Thomas Muler, representative of the Forst German company and the Association of German Chambers Of Industry and Commerce, arrived in Montana (Northwestern Bulgaria). As consultant in the field of agriculture and food-processing industry, Muler will help agricultural partnerships and organizations establish trade contacts and expand their market in Germany. He will deliver lectures, provide consultancy for local farmers and promote cooperation between Montana and Brandenburg. The German expert plans to organize production of dark ale on German technology in one of the region's breweries. The project will be carried out with the financial assistance of the Kontex German consultancy company and the Transform program.

[09] EARTHQUAKE

[10] THE LEFT ADOPTS A DECLARATION

[11] SUNDAY NEWS BRIEFS

At a meeting today the parliamentary group of the Left discussed its legislative priorities. They include the bills on the presidential elections, national symbols, radio and television, national budget and bills in the economic sphere.

Today the children of Sofia celebrated Walt Disney's Day. Elton John's music from the film, "King Lion", had its premiere in the National Palace of Culture. It was directed by Stratford Freeze, music director of Disneyland, California.