News from Bulgaria, 96-10-02

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

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

2 October, 1996

CONTENTS

[01] DECLARATION

[02] BULGARIA MAY BECOME WORLD TRADE ORGANIZATION MEMBER TOMORROW

[03] BULGARIAN FOREIGN MINISTRY ON MIDDLE EAST CRISIS

[04] EU SUPPORT CABINET REFORM EFFORTS

[05] UKRAINIAN POWER ENGINEERING MINISTER BOCHKAREV ARRIVES

[06] BLACK SEA NAVY COMMANDERS TO MEET IN VARNA

[07] BULGARIA'S BANKING CRISIS

[08] SOCIALISTS DRAFT NEW DEPOSITS PROTECTION LAW

[09] OPPOSITION U.D.F., TRADE UNIONS CONSIDER JOINT PROTESTS

[10] SOFIA UNIVERSITY OPENS NEW ACADEMIC YEAR

[11] SMALL DENOMINATION NOTES TAKEN OUT OF CIRCULATION

[12] DAYS OF JAPANESE CULTURE OPEN IN BULGARIA

[01] DECLARATION

Today Andrei Lukanov, MP of the 37th National Assembly and former Prime Minister of the Republic of Bulgaria, was shot dead in front of his home.

Deeply shocked by this act, we, the members of all Parliamentary groups and independent representatives, extend our deepest and most sincere condolences to his family.

The National Assembly of the Republic of Bulgaria categorically denounces this flagrant terrorist act targeted at a political figure. We insist that its perpetrators and instigators be apprehended and punished with all the stringency of the law.

In these times of difficulties and crisis the Bulgarian Parliament declares its firm will to uphold the democratic processes in the country. We decisively oppose all attempts to destabilize Bulgarias political and social life through such provocations. We shall not permit this act of terrorism to lead to the introduction of a state of emergency in the country.

The presidential elections will be held on October 27, as previously scheduled by the National Assembly.

We summon all Bulgarian citizens to keep their calm and, together with us, stand for the constitutional order and the irreversible democratic development of Bulgaria.

Sofia, October 2, 1996

[02] BULGARIA MAY BECOME WORLD TRADE ORGANIZATION MEMBER TOMORROW

"I hope the General Council of the WTO will decided unanimously tomorrow on Bulgaria's accession to the organization," Paparizov said upon his departure. Bulgaria's accession to the WTO will make it possible for this country to join the process of liberalizing world trade and to use the mechanisms of this organization in settling major trade disputes. On its part Bulgaria will undertake to treat all its partners on an equal footing, with the exception of its partners in association and free trade zones agreements it has signed.

Negotiations on Bulgaria's membership in the WTO (which succeeded the GATT) continued for more than ten years. Turkey was the last opponent of Bulgaria's membership but contradictions were settled early last month.

[03] BULGARIAN FOREIGN MINISTRY ON MIDDLE EAST CRISIS

With the latest dramatic events on Palestinian territories the Middle East peace process entered an extremely delicate and complicated stage casting doubt both over Palestinian-Israeli agreements signed so far and on future talks. This will have a disastrous effect both on the states in the region and on the international situation as a whole, a Foreign Ministry spokesman said.

As a state lying in the immediate geographic vicinity, Bulgaria is deeply concerned by this prospect and declares itself in support of the resolution of the UN Security Council of September 28, 1996 calling on the two sides to show restraint and to take the necessary steps to prevent further bloodshed and to continue political dialogue, the spokesman said.

Bulgaria hopes that the joint efforts of the co-chairmen of the International Conference on Peace in the Middle East - the US and Russia, the European Union and the UN and of the countries directly involved in the conflict will find a quick solution to the crisis which would prevent a fresh escalation of tensions and confrontation and would create preconditions for resuming peace talks, the declaration of the Bulgarian Foreign Ministry says.

[04] EU SUPPORT CABINET REFORM EFFORTS

The two discussed the progress of market reforms and the package of measures taken by the Government for restructuring the real economy and the banking sector. They focused on problems in agriculture and grain imports from the EU, the office said.

Officials are coordinating the timeframe for a visit by an expert EU delegation which will discuss with the Bulgarian Government specific steps and the necessary financial assistance for the stabilization of Bulgaria's balance of payments, the press release also says.

Yesterday the Ministers of Trade Atanas Paparizov and Agriculture Krustyo Petkov met with ambassadors of EU member countries and with Ambassador O'Sullivan, and asked for EU support for soft loans to buy grain.

Socialist Prime Minister Zhan Videnov recently requested support from the President of the European Commission Jacques Santer for resolving Bulgaria's grain problems.

[05] UKRAINIAN POWER ENGINEERING MINISTER BOCHKAREV ARRIVES

Upon his arrival, the Ukrainian government minister said that the two sides will discuss cooperation between the energy systems of Bulgaria and Ukraine in the autumn-winter period. Bochkarev will also acquaint himself with the recreation possibilities offered by Bulgaria for children affected by the Chernobyl accident.

[06] BLACK SEA NAVY COMMANDERS TO MEET IN VARNA

Vice Admiral Kontrov suggested Varna's candidacy for hosting a second meeting to discuss specific ideas for interaction in the framework of the Partnership for Peace Programme.

[07] BULGARIA'S BANKING CRISIS

On Monday, September 23, the National Bank of Bulgaria (BNB, the central bank) placed nine commercial banks under special supervision and hiked the base interest rate to a record-high of 25 per cent per month (or 300 per cent simple interest per annum). BNB Governor Filipov said that the package of measures introduced by the central bank seeks to restore the financial stability and confidence in the banking sector through its rehabilitation and restructuring. According to Filipov, the rehabilitation measures have been drawn in accordance with the BNB's and the Government's commitments before the IMF which are crucial for the disbursement of the remaining funds in the fourth stand-by agreement between this country and the Fund.

The USD 580 million stand-by agreement was signed in July 1996 after the Cabinet drew up a programme to achieve certain macroeconomic indicators (inflation, budget deficit), to restructure the economy and rehabilitate the banking sector. Experts say that the extraordinary measures, which seek to ensure the release of the second tranche of the stand-by agreement, were put in place only after the steep depreciation of the national currency and the critical decline in the liquid assets of the financial institutions. The first tranche of USD 116 million was disbursed in late July.

In late June the BNB signed a memorandum of understanding with 19 commercial banks. Apart from rehabilitation of loss-making banks, the memorandum included provisions to revoke banking licences if the agreement is violated.

The nine banks, which signed a memorandum with the BNB and were later put under special supervision: Balkanbank, the Economic Bank, TSBank, the Slavyani Bank, Elitbank, Businessbank, the Mollov Bank, the Dobroudja Bank and the Yambol Bank, are the second wave of banks facing insolvency. The BNB introduces bankruptcy procedures for another five banks: First Private Bank, Mineralbank, Crystal Bank, the Agricultural and Investment Bank and the Bank for Agricultural Credit earlier in the year. Three of these had their licences revoked. BNB bought the AgroBusinessBank in Plovdiv (Southern Bulgaria) for one lev. After several postponements, the courts are to rule on First Private Bank's insolvency later this month. In early March the BNB placed under special supervision and took over the management of the Bank for Agricultural Credit which will be restructured under the current package of measures.

The nine banks placed under special supervision are troubled ones; the remaining commercial banks are viable institutions and the BNB will support them through secured and unsecured loans, the BNB Board of Governors stated. According to Borislav Stratev, Head of BNB's Legal Department, deposits of members of the public in the nine banks total 80,000 million leva. Under the effective Act on State Protection of Deposits and Accounts with Commercial Banks in Respect Whereof the BNB Has Filed a Petition in Bankruptcy, the central bank will pay the money after the troubled banks are declared insolvent.

[08] SOCIALISTS DRAFT NEW DEPOSITS PROTECTION LAW

The present act needs to be amended because it is possible not to declare a bank under special supervision bankrupt, Zhelev said. It would create imbalances for the budget to take the burden of paying guaranteed deposits. According to Zhelev, the guarantees should be spread equally among a reserve fund set up by the bank, the budget, and depositors. It is possible to add a fourth party - insurance companies, Zhelev said.

Only a small part of Bulgarian hospitals and other health care establishments will suffer from the blocking of accounts with the nine banks placed under special BNB supervision, Zhelev believes. According to him, a large part are in dire financial straits and do not keep bank accounts. Zhelev announced the BSP is getting ready for an internal audit. The last such audit was in 1991.

[09] OPPOSITION U.D.F., TRADE UNIONS CONSIDER JOINT PROTESTS

Last week the Podkrepa leadership decided to support Peter Stoyanov and Todor Kavaldjiev, the presidential and vice-presidential candidates of the united opposition: the UDF, the Popular Union - a coalition of the Bulgarian Agrarian National Union and the Democratic Party, and the ethnic Turks' Movement for Rights and Freedoms, in the forthcoming presidential elections.

The Podkrepa leadership today sent a letter to the parliamentary group of the ruling Democratic Left coalition - the Bulgarian Socialist Party (BSP), the Alexander Stamboliiski Bulgarian Agrarian National Union and the EcoGlasnost Political Club, in which the Confederation announces its refusal to participate in the BSP-sponsored dialogue on this country's way out of the economic crisis.

Leaders of the Podkrepa Labour Confederation and of the Confederation of Independent Trade Unions in Bulgaria (CITUB, the other most influential amalgamation in Bulgaria) Konstantin Trenchev and Krustyo Petkov last week voiced their willingness to organize joint protests nationwide.

"On Thursday this week, UDF MPs will meet in Parliament with the CITUB and Podkrepa leaders to discuss the possible common points of the opposition and the trade unions in their criticism of the economic and social policy of the Socialist Cabinet," UDF leader Ivan Kostov today said. Kostov stressed that the UDF will insist that the trade unions' strikes and rallies should not be politically motivated and should not take place under the auspices of the united opposition. The UDF will not support illegal protests, riots and other provocations; the organization will insist that the trade unions use constitutional and legal means of protest, Kostov said.

[10] SOFIA UNIVERSITY OPENS NEW ACADEMIC YEAR

The new curriculums for bachelor and master degrees are yet to be adopted and the Rules Regulating the Structure and Activities of Sofia University are to be amended this November in compliance with the new Higher Education Act.

Prof. Lalov said that albeit the financial difficulties, Sofia University will continue to function but reduced funding will limit its actual potentials and the quality of training and render academic autonomy meaningless.

The new way of forming the university budget violates the Higher Education Act and makes paid education undesirable. Some higher educational establishments may even be forced to close paid education next year and this means that 100,000 students will not be able to complete their education, Prof. Ivan Lalov said at a news conference yesterday.

According to the rector of Sofia University, this is due to the way the budget of the university and other higher educational establishments is formed. When forming the budget, university revenues for paid education become part of the government subsidy, that is, Sofia University pays 25 per cent of its budget with its own revenues.

Thus the money from paid education goes to meet expenditures on state quota students and no funds remain for those who have paid for their education. Therefore paid education cannot function and the university will have to free itself of this burden. This budget formation violates the Higher Education Act under which education is funded by government subsidies, the Rector also said.

St Kliment Ohridski Sofia University is due to receive 450 million leva by the end of 1996 and if the Finance Ministry delays these funds once again, the University will be forced to cut its expenditures, Prof. Lalov said. And this would once again delay the payment of salaries, scholarships and extra hours to payroll lecturers and to force the University to cut heating expenses in winter.

[11] SMALL DENOMINATION NOTES TAKEN OUT OF CIRCULATION

Two years after the deadline the 10 leva notes can be exchanged at the BNB counters. According to the head of the BNB Issue Department, Rozalina Natseva, the bank has enough coins of 1 to 10 leva and with notes of 20 to 5,000 leva to meet the needs of money circulation.

Small denomination notes are taken out because of the drastic rise in the cost of living, "Standart News" writes. The paper says that a banknote with a denomination of 10,000 leva has been printed, though it is not known when it will appear on the market. Since the beginning of the year the amount of banknotes in circulation have increased by 28,000 million leva; at the moment the notes total about 97,000 million leva.

[12] DAYS OF JAPANESE CULTURE OPEN IN BULGARIA

The programme of the Days lists performances by the Rinkogum company of the modern play "The Capital of the Land of Gods" by Yodji Sakate on Wednesday and Thursday. This is the first visit by a modern drama Japanese company here. The programme also envisages a jazz concert by concertina player Nobuo Yagi, guitar player Makoto Tanaka and Bulgarian pipe player Teodosi Spassov. Yaoi Hirano will give a pantomime show and pianist Yoshiouki Hara a concert with the Sofia Philharmonic Orchestra under the baton of Bulgarian Emil Tabakov. Traditional Japanese confectionery will be presented for the first time within the framework of the Days at the prestigious Intercontinental Hotel.

A panorama of the Japanese animated film and an exhibition of modern Japanese posters will also be held for the first time within the framework of the days.

Today Princess Sayako arrived in the old Bulgarian capital of Veliko Turnovo where she visited historical and architectural sights and later the Veliko Turnovo University where she met Japanese language lecturers and students. The Veliko Turnovo University has been teaching Japanese language and literature to 60 applied linguistic students for five years now.

The Princess also attended a demonstration Japanese language class in the phonetic laboratory equipped by Sony with a 900 million yen donation by the Japanese government. Princess Sayako was presented the Honorary Badge of the Veliko Turnovo University and an icon. Princess Sayoko presented her hosts with books written by her father, Emperor Akihito, and translations from English into Japanese made by her mother and then signed the Visitors' Book.

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