News from Bulgaria, 96-06-24

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

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

24 June, 1996

CONTENTS

[01] BULGARIAN PRESIDENT CONFERRED TRANSITION PRIZE

[02] PRESIDENT ZHELEV, DEPUTY P.M. GECHEV TO ATTEND FIRST ECONOMIC SUMMIT OF CENTRAL & EASTERN EUROPEAN COUNTRIES

[03] BULGARIA'S STRATEGIC OBJECTIVE IS MEMBERSHIP IN E.U.

[04] P.M. VIDENOV AND FOREIGN MINISTER PIRINSKI RETURN FROM FLORENCE

[05] BALKAN FOREIGN MINISTERS' MEETING DUE ON JULY 6-7

[06] BALKAN NEWS AGENCY TO EXPAND EXCHANGE OF INFORMATION

[07] P.M. VIDENOV EXTENDS CONDOLENCES ON PAPANDREOU'S DEATH

[08] BULGARIA AND TURKEY EXPAND ECONOMIC TIES

[09] BRITISH BUSINESSMEN READY TO INVEST IN BULGARIA

[10] BULGARIAN GOVERNMENT DELEGATION DEPARTS FOR ZAGREB

[11] CAPITAL OF ENTERPRISES TO GO PRIVATE UP BY 20,000 MLN LEVA

[12] VALUE ADDED TAX INCREASES TO 22 PER CENT

[13] POOR HARVEST WILL MAKE NECESSARY GRAIN IMPORTS

[14] BUSINESS PRESS

[01] BULGARIAN PRESIDENT CONFERRED TRANSITION PRIZE

This year the prize was conferred to President Zhelev and posthumously to former Israeli prime minister Yitzhak Rabin. Zhelev said that it is an honour for him to share the award with one of the outstanding personalities of modern world politics, Yitzhak Rabin, whom he described as a brave peace-maker, victim of the complicated process of transition to tolerance and the freedom of self- determination. This is why we carry on a common struggle and I believe that we will always have loyal and brave followers along the road we have embarked on who will guarantee the irreversibility of our cause, the Bulgarian President added.

In his address Zhelev dwelled on the problems of transition of the Eastern and Central European countries. The experience of Bulgaria and the other ex-communist countries shows that three are three stages of transition: first, disintegration of the one-party system and reinstatement of the political components of civil society, second, building up of democratic institutions and adoption of democratic laws and, third, transition to modern market economy, he stated. In Zhelev's view the most difficult aspect of the transition proved the economic one, not simply because the people should make great sacrifices and suffer privations, but also due to the fact that the transition from centralized to free market economy involves too much social and psychological problems for the people. Things get even more complicated when economic reforms are not carried out radically, consistently and quickly as is the case with Bulgaria. Then the price of transition is much higher and is paid by the whole nation, Zhelev added. Anyway, however slow the transition is the irreversible nature of the processes is a guarantee that it will be competed, the Bulgarian President stated. This evening president Zhelev returns to Bulgaria.

[02] PRESIDENT ZHELEV, DEPUTY P.M. GECHEV TO ATTEND FIRST ECONOMIC SUMMIT OF CENTRAL & EASTERN EUROPEAN COUNTRIES

The summit will focus on the prospects for development of the emerging markets in the region and the conditions for achieving significant sustainable economic growth. Participants in the summit will pay special attention on the problem of the development of the infrastructure and the business relations which should facilitate the attraction of foreign capital and the development of trade and industry so that the region becomes a world economic leader. Participants in the first economic summit of Central and Eastern Europe will also discuss questions of the collective security.

[03] BULGARIA'S STRATEGIC OBJECTIVE IS MEMBERSHIP IN E.U.

The forum provided the Bulgarian side with the opportunity to voice its position on the EU enlargement, to elaborate on the strategy adopted by the Bulgarian Government for approximation of the Bulgarian law with the EU legal standards and to outline the Bulgarian initiative for an all-embracing process of enhancing stability, security and cooperation among the countries in Southeastern Europe.

Addressing the participants in the summit, Prime Minister Videnov stressed Bulgaria's conviction that the would-be EU members from Central and Eastern Europe should be treated on equal terms and should be given the opportunity of an equal start. This principle, he recalled, underlies the decisions made at the EU summits in Madrid and Turin.

Bulgaria believes, Prime Minister Videnov said, that the EU eastward expansion will have positive economic, political and cultural effects which will surpass the financial importance of the process. The expansion will help overcome the artificial division of Europe in the last decades, he stated.

Dwelling on Bulgaria's preparation for negotiations on its EU membership which he described as the country's strategic objective, Videnov said that this process was going in parallel to the country's efforts to strengthen links in the Balkan region. He invited representatives of the European Commission to the meeting of Balkan foreign ministers to be held in Sofia in July 1996. It is necessary to evaluate the possibilities for regional cooperation in Southeastern Europe and determine the EU approach to it together, Videnov said.

The Bulgarian Prime Minister told his counterparts about the structural reform in Bulgaria and the problems arising in this connection. The Government enjoys the support of Parliament, of the international financial institutions, and it is determined to attain its objectives. All the more that the reform is linked to Bulgaria's desire for full membership in the EU because the reform is being carried out with a view to the criteria for EU membership set in Copenhagen, Videnov said.

Today's meeting was held within the framework of the regular summer meeting of the European Council, the summit forum of the EU. Its ends the term of Italy as presiding country of the EU. It is handed over to Ireland which will preside the organization from July 1 until the end of the year.

Italian Prime Minister Romano Prodi briefed the state and government leaders of the would-be EU members from Central and Eastern Europe on the decisions made at the summit in Florence. The EU leaders agreed that negotiations on the membership of these countries can start six months after the end of the Inter- Governmental Conference, expected to be concluded by the middle of 1997, as BTA was told by well-informed sources.

[04] P.M. VIDENOV AND FOREIGN MINISTER PIRINSKI RETURN FROM FLORENCE

Before leaving, PM Videnov gave a news conference for Bulgarian and foreign reporters and expressed Bulgaria's hope that the negotiations on full membership would start simultaneously with all EU-associated countries. He said that the EU representatives had taken a very positive view on Bulgaria's initiative for the meeting of Balkan foreign ministers to be held in Sofia on July 6-7, 1996. The EU leaders showed understanding for the Bulgarian Government efforts to carry out structural reform. Meeting with European Commission member Hans van den Broek, I pointed out that the Union should look for more realistic ways of expressing its empathy for our efforts through broader financial support, Foreign Minister Pirinski said at the news conference.

[05] BALKAN FOREIGN MINISTERS' MEETING DUE ON JULY 6-7

It is encouraging that countries such as Slovenia and Croatia, which have ruled out the possibility of participating in it before, now are inclined to attend the Balkan foreign ministers' meeting as observers, Pirinski said.

A few months ago Bulgaria launched the initiative of organizing and hosting a Balkan meeting of foreign ministers. Initially it was to take place from June 8 through 9, 1996. However, Turkey said it could not attend it if the meeting was held on these dates because it would coincide with the HABITAT II forum it had to host from June 3 through 14. Albania said it could hardly attend it because of the presidential elections scheduled for that time.

[06] BALKAN NEWS AGENCY TO EXPAND EXCHANGE OF INFORMATION

The Istanbul News Agency (IHA), which has the status of observer, applied for full membership in the Association. Its application will be considered at the next meeting of ABNA.

The ABNA was established on April 28, 1995 in Sofia. Its members are the Bulgarian News Agency (BTA), the Balkan Information Pool, the anatolian News Agency (Anatolia), the Athens News Agency (Athenagence), Tanjug, the Macedonian Press Agency based at Thessaloniki (MPA), the Albanian Telegraphic Agency (ATA), the Macedonian Press Bureau (MPE) and Rompress. IHA and the Agency of Bosnia and Herzegovina have observer status at it.

[07] P.M. VIDENOV EXTENDS CONDOLENCES ON PAPANDREOU'S DEATH

[08] BULGARIA AND TURKEY EXPAND ECONOMIC TIES

[09] BRITISH BUSINESSMEN READY TO INVEST IN BULGARIA

The British businessmen were unanimous that Bulgarian agriculture is a very promising sector. Anthony Andrews, who heads the delegation said they were impressed by the huge potential of people with a serious experience in this field. The guests also voiced a concern over the land ownership problems, which act as an impediment for foreign investment. Deputy Agriculture Minister Roumen Popov said in return that more opportunities for foreign investment will open up with the passage of a law on farm land lease that is currently being drawn up.

[10] BULGARIAN GOVERNMENT DELEGATION DEPARTS FOR ZAGREB

During the session, the sides will sign agreements on reciprocal investment protection, on cooperation in tourism and plant protection, head of the delegation Deputy Prime Minister and Minister of Economic Development Roumen Gechev said before his departure. In the near future, Bulgaria and Croatia will sign an agreement on avoidance of double taxation and will set up a free trade zone, Gechev said.

In Zagreb, the Bulgarian Deputy Prime Minister will meet with the Croat ministers of the economy, agriculture and finance. The Bulgarian officials will study the opportunities for the participation of Bulgarian companies in the reconstruction of the countries involved in the conflict in former Yugoslavia.

[11] CAPITAL OF ENTERPRISES TO GO PRIVATE UP BY 20,000 MLN LEVA

The privatization scheme envisages that the state get a minority share (up to 33%) in 890 enterprises offered for privatization by the public. In 250 companies the share of capital to go private was increased from 65% to 67% and in another 85 from 25% to 67%. The increase is smaller for 59 companies but after cash privatization and restitution the state interest will be the same. In 26 companies the share of capital to be offered to the public will shrink to make sure all restitution claims will be met. The above changes meet the World Bank's requirements for stepping up the structural adjustment of the economy, said Mitrev. By World Bank criteria, a company is private when the state interest in it is less than a third of the capital.

The state will retain a majority interest in some key enterprises. It remains unclear what share of companies including Himmash, Agrobiohim, Sviloza and Bulgartabac's affiliates, will go private. The mass privatization list includes 1,050 enterprises with an aggregate capital of 202,000 million leva.

[12] VALUE ADDED TAX INCREASES TO 22 PER CENT

Another amendment to the act puts traders with annual turnover exceeding 7.5 million leva (about USD 50,000) under the mandatory obligation to apply for VAT registration. Up to now, VAT registration was compulsory for traders with annual turnover of more than only 1.5 million leva.

The time limit in which the tax authorities have to return to traders the surplus between the tax credit and the total amount of the charged VAT was extended from one to three months. Opposition MPs insisted that the state should pay interest to the companies if it fails to return the money within the stipulated deadline. The parliamentary majority, however, rejected the proposal. The amendments voted today also increase the fines for VAT evasion and for traders who fail to pay the due tax by the stipulated deadline. Opposition MPs took a stand against the VAT increase. According to them, the measure will not increase budget revenue but inflation and may lead to larger tax evasion.

[13] POOR HARVEST WILL MAKE NECESSARY GRAIN IMPORTS

As the harvest is expected to be poor, Bulgaria will have to import bread wheat, the senior government official said. He added that the country would also have serious problems with animal feed grain next year. Popov stressed wheat prices on the domestic market should reach the level of the internationally prevailing ones. There is no possibility to subsidize the difference between the prices of imported and locally produced wheat and the increase of the purchase price of wheat on the domestic market through the budget, therefore the mark- up of bread prices is inevitable, the Deputy Minister of Agriculture said.

[14] BUSINESS PRESS

The European Bank for Reconstruction and Development (EBRD) decided yesterday to grant 10 million US dollars to the Bulgarian private company Astra on a privatization deal with the cosmetics producer Aroma, Pari says, quoting a news release of the Ministry of Industry. This is the first Bulgarian private company to receive funds from the EBRD. The company will use part of the loan to pay its obligations to the Central Cooperative Bank and the rest of the sums will go for updating and reconstruction. According to 24 Chassa a new series of cosmetics and perfumery products will be offered on the Bulgarian market by the end of the year.

French company Wercap will invest 100,000 US dollars in a caps workshop in the free trading area in Bourgas, 24 Chassa says. The investor will install the equipment next week, the daily says.

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