Bulgarian Telegraph Agency (BTA), 97-02-24

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

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

24 February, 1997

CONTENTS

[01] FAST RESTRUCTURING - BEST WAY OUT OF THE CRISIS

[02] MEETING OF FOREIGN MINISTER STALEV WITH US AMBASSADOR BOHLEN

[03] BULGARIA - GERMANY

[04] BULGARIA - MACEDONIA

[05] PRESIDENT STOYANOV MEETS THE CENTRAL ELECTORAL COMMISSION

[06] INTERIOR MINISTRY MEASURES TO CONTROL SECURITY BUSINESSES

[01] FAST RESTRUCTURING - BEST WAY OUT OF THE CRISIS

Kenneth Lay met with President Peter Stoyanov, Prime Minister Stefan Sofiyanski, National Bank Governor Lyubomir Filipov and Finance Minister Svetoslav Gavriiski. The World Bank mission reviewed the government's anti- crisis programme and policies addressing the most pressing problems. On February 24 the World Bank official will inform the European Commission of the economic situation in Bulgaria.

Ways to speed the process of economic and banking reform were discussed during the visit, K.Lay said. The Videnov cabinet programme of the spring of 1996, which envisaged winding up 64 loss-makers and rehabilitating 70 more, had been approved by the Bank but no positive action was taken. A World Bank loan of some US$ 200 million for restructuring of the real economy and IMF loans for the implementation of monetary and fiscal policy on a macroeconomic level provided the funds needed to carry out the programme, Lay said.

The fastest possible liberalization of grain prices, kept down for now at an artificially low level, a liberalized trade regime, speedy privatization of large state companies and sell-offs of large companies slated for cash privatization are the steps recommended to the caretaker cabinet. Kenneth Lay said the whole Bulgarian Telecoms Company should be put up for sale instead of a 25-30 per cent stake as proposed. This also applies to large oil refineries like Neftochim, he added. This approach will bring in a constant inflow of foreign capital which is badly needed now, Lay said.

The World Bank insists on the liberalization of other prices, electricity included. Lay said a price of 3.5 cents per kWh was not set as a precondition for reaching an agreement. The price of electricity may gradually climb to that level over a longer period. Bread prices should reach the European level of around US$ 2.5, according to him.

The World Bank emphasizes the need to reduce the social price of reform, Lay said. The Bank has prepared a package of social protection policies, including a US$ 30 million loan earmarked for severance pay to workers of closed down loss-makers and welfare benefits to those who will be worst hit. The European Union is planning to extend ECU 20 million in support of social reform, Lay said. He said people should realize reforms are urgently needed and the faster they are carried out, the sooner stabilization will start.

Bulgaria can rely on technical assistance from the World Bank in all areas, including reform of the economic and financial sector and social services, Lay said. Five World Bank teams will be helping the government. They include experts in structural reform, privatization, banking, social protection and information. Banking restructuring and the parameters of a currency board which is to be introduced will be discussed in greater detail with IMF representatives, Lay said. The team, which will make progress reports, was set up in response to the policy of openness and transparency formulated by Bulgaria's President and Prime Minister, Lay said.

[02] MEETING OF FOREIGN MINISTER STALEV WITH US AMBASSADOR BOHLEN

Stalev told Ambassador Bohlen Bulgaria needs hope in the coming weeks and months that its economy will pull out of the crisis. The country expects assistance both in the form of money and in kind. "We want to send out a clear signal that Bulgaria has kept and will stick to its foreign policy priorities," Stalev said. "We should realize there is a close link between the rule of law and the legal framework of our market economy on the one hand, and our integration in the EU and future membership in NATO on the other," he said.

Ambassador Bohlen assured Stalev that Washington is ready to provide assistance to Bulgaria. She also said the U.S. is not afraid of an immigration wave from Bulgaria because conditions here will improve soon and young people will feel no need to leave their country.

[03] BULGARIA - GERMANY

Kinkel pledged Germany's help to find the best solution to issues related to the grave economic and financial situation in Bulgaria, the Bulgarian Foreign Ministry said.

Ways to intensify the political dialogue between Bulgaria and Germany were also discussed.

[04] BULGARIA - MACEDONIA

A note from the Macedonian authorities was delivered in Sofia during a working meeting of political directors of the foreign ministries of the Balkan countries. "Judging from the reaction of the Bulgarian authorities, a solution may be found in the coming days," Frckovski said. He said a ban had been imposed on supplies through middlemen, while direct supplies from the Bulgarian oil refinery Neftochim were duly cleared through customs.

Bulgaria, currently in the grip of an economic and financial crisis, is suffering an acute fuel shortage. The interior minister ordered tighter border controls in an attempt to crack down on widespread smuggling of all kinds of goods, fuel included.

[05] PRESIDENT STOYANOV MEETS THE CENTRAL ELECTORAL COMMISSION

President Stoyanov assured the Commission he selected its members primarily on the basis of their professional qualities, while what political forces has nominated them was his last consideration. On Friday Socialist leader Georgi Purvanov said the Left had only a nominal presence in CEC and its composition was unacceptable. He also said the Socialist Party might withdraw its representatives.

CEC Chairperson Lena Djelepova asked the President for an agreement on air time distribution among the political forces during the election campaign, a matter not regulated by the law. Stoyanov pledged his support but said "the political forces themselves must take this responsibility".

[06] INTERIOR MINISTRY MEASURES TO CONTROL SECURITY BUSINESSES

The amended ordinance allows the police to revoke licences and introduces better and more reliable licensing criteria. At the same time protection firms will have to meet more stringent requirements when undertaking to protect natural and juristic persons. Police will charge higher licensing fees. The ordinance bans the granting of licences to persons with a criminal record or under investigation.

The ordinance is also intended to eliminate contradictions and inaccuracies in the effective regulations on the conditions, procedure and control of the use of firearms, the Ministry said. The Interior Ministry will not lease firearms in the future. Interior Ministry officers can buy personal weapons and munitions on soft terms.

Similar regulations apply to natural and juristic persons outside the Interior Ministry. They can buy firearms, which until now they were allowed only to lease, under strict control, including licensing.

Minister Bonev also signed an order canceling the licensing requirement for gas and flare arms

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