Bulgaria Love/불가리아 뉴스

불가리아 주요 경제뉴스( 23 – 30 NOVEMBER 2007)

KBEP 2007. 11. 30. 23:12





Sections/headline briefs:





·        Japanese and Korean mad about Bulgarian yogurt

·        World Bank: Bulgaria taking full advantage of partnership strategy

·        EBRD president to visit Bulgaria

·        Bulgaria's transport minister returns from Brussels with � 2 Billion

·        Bulgarian government corners domestic drug market

·        Bulgaria, Netherlands to cooperate in energy efficiency

·        Balkans face power shortage due to Kozloduy NPP closedown

·        Green Peace Vs. NPP Belene

·        Parliament passes Flat Tax on first Reading

·        BICA presents position on the 2008 national budget act

·        Government not ready to spent �500 M surplus

·        S&P Confirms Bulgaria Rating at "BBB+"

·        Dollar drubbing a threat to Bulgaria's dairy, machine-engineering industries

·        Bulgarians are buying more cars

·        Bulgaria among Europe's leaders in IPO

·        Bulgaria merges airports in Plovdiv, Varna and Burgas

·        Macedonian Prime Minister to pay official visit to Sofia

·        Farmers to get EU subsidies next year

·        Transport and Environment operative programs to be signed in Brussels

·        Jordan buys Bulgarian tobacco for narghile

·        Army upgrade contracts to inject �150 M in Bulgarian economy

·        99% of Bulgarian business is small and average

·        By 2020-2025 Bulgaria's population will total 6 Mln people, 20% of which over the age of 65

·        Bulgaria business: reduced CO2 quota is a disaster

·        Yuppies return to Bulgaria

·        Bulgaria one of CEE countries with highest pay increase in 2008




·        Austrian Post wants to invest in Bulgaria

·        EBRD supports italians for hydro power project in Bulgaria

·        Sofia launches investment program to deal with traffic jams nightmare

·        Carrefour tо build Mall in Burgas

·        Balchik Dreams co to invest �130 M in coastal resort

·        Germans pour �2 M in former barracks

·        Bulgarian Nortek to invest $20 M in expansion by Mid-2009

·        Bulgarian Intertrust to invest �60 M in lead and zinc co OCK

·        Central Mall in Bulgaria`s Veliko Turnovo for sale

·        Investment rise to offset trade deficit





·        Company loans increase four-fold in Apr-Aug

·        Swiss company Eyes Ruse’s Heating Utility

·        Mispol eyes Bulgarian, Romanian Markets

·        Intel world ahead

·        Bulgarian Deni Lighting plans to go public

·        Energy and Energy Saving Fund to raise capital

·        Investors submit orders for nearly BGN 1 Bln  in Enemona IPO

·        Italian co buys 60% stake in Bulgaria dairy maker MyDay

·        Vivatel announces 1 million clients

·        Germanwings offers bargain flights from Sofia to London, Paris, Berlin

·        Father, son pocket nearly BGN 800,000 from stock trade

·        Tokuda Hospital rakes in BGN 13М revenue Jan-Sep

·        Romanian companies move to Bulgaria




·        2008 budget with many bywords

·        A “second generation of reforms” is under way















Japanese and Korean mad about Bulgarian yogurt

Bulgarian Economy Minister Peter Dimitrov met representatives of firms, licensed of ‘L.B. Bulgaricum' for producing Bulgarian Yogurt. Reason for the meeting was considering of measures for expanding the market supply of the Bulgarian product in Europe and Asia.The meeting was attended by the Japanese Meiji Daries Corp Chairman Mr. Nakayama, Kang Choy- President of Korean Vital Food Co and their executive director Cho Choy.The Japanese pointed out three main directions for the expanding of Bulgarian yogurt consumption: following and developing of the traditional technology of producing, reasonable control over the brand and creating new products, which reply to the specific preferences of people from different regions.Bulgarian yogurt is unique licensed brand. It is made by introducing specific bacteria strains into milk, which is subsequently fermented under controlled temperatures and environmental conditions. The Bulgarian Yogurt, licensed and produced by Meiji Daries Corp., is with the biggest share on the Japanese market- 39 %, as the yearly production of the firm is 200, 000 tones.Over 40 different products with the brand ‘Bulgarian Yogurt Meiji' has been worked out. Korean businessmen Kang Choy and Cho Choy expressed their concern Bulgarian Yogurt will become #1 in Korea.

World Bank: Bulgaria taking full advantage of partnership strategy

Bulgaria is taking full advantage of its World Bank Partnership Strategy by using the Bank's projects and financial knowledge to accelerate its economic growth. This was the general conclusion of the first annual report on the Programme's implementation, carried out by the Government and a Bank team, the Government's information service reported.
A meeting, chaired by Economy and Energy Minister Peter Dimitrov, was attended by Labour and Social Policy Minister Emilia Maslarova, Health Minister Prof Radoslav Gaidarski, World Bank Director for Bulgaria, Romania and Croatia Anand Seth, Deputy Ministers and experts, among others. Bulgaria is making significant progress towards long-term stability and sustainable growth, the analysis states. As a result of its stable macroeconomic policy and structural reforms, the average rate of growth has exceeded 6 per cent per year in the period 2004-2006, and this is set to remain high in the the medium term, experts predict. The World Bank has found that in 2007, the Government continued with its programme of reforms in order that the country can integrate its economy with that of the rest of the EU. The strong economic growth is accompanied by significant improvements in the labour market. The Bank is firmly committed to continuing its support of Bulgaria's agenda for socioeconomic development through the adoption of European and global expertise, and of the best international practices, permanent Bank representative for Bulgaria Florian Fichtl said. The active credit portfolio of World Bank-financed operations in Bulgaria consists of nine investment projects, including two donations forming part of the Bank-funded Global Environment Facility (GEF). The total initial amount of loans is 423.8 million USD. The projects and their respective amounts are: Road Infrastructure Rehabilitation Project - 122.5 million USD; Social Investment and Employment Promotion Project - 69.3 million USD; Health Sector Reform Project - 63.3 million USD; Second Trade and Transport Facilitation Project - 52.8 million USD; District (Regional) Heat Project, as part of the Prototype Carbon Fund (PCF) - 34.2 million USD; Revenue Administration Reform Project - 34.15 million USD; Registration and Cadastre Project - 30 million USD; Energy Efficiency GEF Project - 10 million USD; Wetlands Restoration and Pollution Reduction GEF Project - 7.5 million USD. Bulgaria's 2007-2009 Partnership Strategy, developed in a close partnership between the World Bank and the Bulgarian Government, was approved by the Bank in June 2006. Seth was presented with a special Foreign Ministry plaque for overall contribution to the development of Bulgaria-World Bank relations by Foreign Minister Ivailo Kalfin, the Ministry reported.

EBRD president to visit Bulgaria

President of the European Bank for Reconstruction and Development (EBRD) Jean Lemierre would come to Bulgaria on November 26 for a two-day visit, the EBRD press office announced.During his visit, Lemierre would take part in the Central European Initiative meeting and sign contracts for two projects in which the bank would participate. The participation of the EBRD in the projects showed how important regional integration was for the bank, Dnevnik daily said.During his visit Jean Lemierre would meet Prime Minister Sergei Stanishev and Finance Minister Plamen Oresharski. In the talks he intends to point out EBRD support for energy efficiency, infrastructure, energetics and the corporate sector, the EBRD press statement said. EBRD's president would also participate in a discussion on how to increase EBRD's investments in Bulgaria.The first of the two projects he would sign was a 54-million euro credit for the Svoge hydro-electric power plant, for the construction of nine small hydro power stations in the Iskur river. The second credit line was for 6.75 million euro for the modernisation of the Loukovit brick factory, owned by Austrian company Wienerberger.EBRD was the biggest investor in Bulgaria with 1.4 billion euro invested in different projects throughout the country. Together with its partners, the bank participated in raising 5.7 billion euro for investment in Bulgarian companies, the media statement said.

Bulgaria's transport minister returns from Brussels with � 2 Billion

Bulgarian Minister of Transport Petar Mutafchiev negotiated in Brussels a 2-billion-Euro EU subsidy to be provided to Bulgaria. He and European Commissioner for Regional Development Policy Danuta Hubner signed yesterday the operative program for transport, which will allot to Bulgaria the largest amount of funding ever subsidized in a EU country. Twenty-nine percent of it, or 580 million euros, will be invested in railway transport development. 990 millions will be spent on construction of new roads and highways. Some 211 millions will go for bringing the Sofia underground construction to completion as well as for intermodal terminals for passengers transport and freight. The shipping and navigation along the Danube River will also see improvement, because some 157 million are envisaged for it. Danuta Hubner sharply criticised the Bulgarian municipalities for not being well-prepared to absorb the operative programs funds. She emphasized that Bulgaria might have to give some of the EU money back to Brussels unless strict control over the funds absorption is established.


Bulgarian government corners domestic drug market

Acting on a proposal by health care ministry, the Bulgarian government Thursday approved regulations, giving the state full authority to name the drugs that will be reimbursable with public funds and the price at which this will happen.The amended Human Medicinal Drugs Act authorises an independent commission to select the drugs that will be on the reimbursement list. The commission should be made up of representatives from several ministries, the National Health Insurance Institute (NHIF), the Drug Executive Agency and the professional associations of medics and dentists.The government, however, has failed to seat any representatives of the professional associations on the commission, arguing that the rights of the public will be looked after by NHIF as is the international practice. However, in contrast to other countries, the Bulgarian NHIF is a market monopoly controlled by the state.The Bulgarian Pharmacist Union Thursday said it will send a letter to the prime minister, urging that some of the provisions in the ordinance are amended.The Association of Research-based Pharmaceutical Manufacturers in Bulgaria also said it is considering filing complaints with the competent authorities.The main sticking point for the Bulgarian drug makers is the provision requiring that the price of generic products should be 50% lower than their brand-name equivalents.According to Andrei Mladenov from local pharmaceuticals company Sopharma, a requirement that prices hinge on each other like that is not tolerated in the EU because it contravenes the rules of free competition.In his view, there is a real possibility that generic drugs could lose market share.The drug makers agree that the Human Medicinal Drugs Act is consistent with community law but that the new ordinance is an attempt to regulate the market and limit competition.They contend that since the law states that the positive list shall be made up of the cheapest drugs based on a comparison with eight benchmark states in Europe, there is no need for the state to interfere further in pricing.The NHIF budget for drug reimbursements in 2008 is 295 mln levs.Another 160 mln levs have been earmarked for the cancer, hemodialysis and other drugs covered by the health care ministry.Also on Thursday, the government adopted a drug pricing ordinance, capping off at 22% the mark-up that pharmacies will be allowed to slap on medicines with a producer price of up to 10 levs, at 20% the mark-up for medicines with a price of 10 to 30 levs and 18% for medicines with producer price of over 30 levs.

Bulgaria, Netherlands to cooperate in energy efficiency

Bulgarian Deputy Minister of Economy and Energy Lachezar Borisov, Netherlands’ Ambassador Willian Wan Ee and businesspeoeple in Bulgaria signed voluntary agreements for energy efficiency, a journalist of FOCUS News Agency reported. According to deputy minister of economy Lachezar Borisov Bulgaria has vowed participation in the project, which is a basic instrument for raising energy efficiency with the signing of letters of intent between the ministry and business associations in 2006.

Balkans face power shortage due to Kozloduy NPP closedown

The Balkan Peninsula is on the verge of energy crisis due to the closedown of Kozloduy Nuclear Power Plant (NPP). The Southeastern European countries will experience a 15 to 20-percent shortage of power unless new nukes are built soon, the head of Energy Financing Team (EFT Group) Anastasios Karahalios told energyobserver.com.
"So far, Bulgaria used to cover 50 percent of power shortages in the neighboring countries, while it can now only cover 20 percent of the power needs," Karahalios said.

Green Peace Vs. NPP Belene

Activists from ‘Green Peace' will meet  EC representatives in Brussels on Friday, November 23.The eco officials will try to convince the commission to give negative opinion for NPP Belene.‘Green Peace's arguments against the future nuclear plant are that the site is seismic area and that the procedure is nontransparent.Former chairperson of the agency for nuclear regulation Georgy Kaschiev will attend the Brussels meeting. He supports the ‘Green peace' standpoint.From the Bulgarian nuclear forum commented that the eco activists are trying to discredit the project, which can receive a certificate by the International Atomic Energy Agency (IAEA).New estimation of the seismic risk was demanded, despite of all previous rates that show the plant will be saved.

Parliament passes Flat Tax on first Reading

According to the changes in the Law on Taxation of the Income of Physical Persons, which local deputies adopted on Friday, November 23 on first reading, the 10% unified taxation starts from 2008.Tax concessions for donations and family income tax are dropped out.The normatively acknowledged expenses from 2008 will be 40% for authors' incomes of artists and 25% for free professions.The municipal councils should define the taxes' sizes until February 29. If this happens, municipality can gather their local taxes on minimum levels from the next year.Following the changes the paid tax becomes local and will be determined by municipal councils' decisions.

BICA presents position on the 2008 national budget act

The Bulgarian Industrial Capital Association presented Monday its position on the 2008 National Budget Act at the BTA National Press Club. According to this organization, the positive points in the budget include:
-- more realistic revenue planning - a 27.2 per cent rise
year-on-year,including tax revenue increase of 25.9 per cent;
-- the introduction of 10 per cent flat income tax for natural
persons without a tax-free minimum;
-- capital costs increase by more than 50 per cent year-on-year;
-- the introduction of program budgets for all ministries and
state agencies;
-- the formation of 3 per cent of GDP budget surplus as a
counterbalance of the increasing trade deficit and current
account deficit (21.9 per cent);
-- increase of the funds for education and health care, as well
as the introduction of delegated school budgets;
-- change in the ratio of health insurance contributions paid by
employers and employees from 65/35 to 60/40;
-- reduction of dividends tax from 7 to 5 per cent;
-- reduction of sole trader income tax rate from 24 to 15 per
-- introduction of centralized reserve (300 million leva) for
fiscal sustainability instead of keeping back 10 per cent of the
costs of first-tier budget organizations;
-- eradication of advance payments on corporate tax for
companies with less than 100,000 sales revenue a year;
According to the Bulgarian Industrial Capital Association, the
drawbacks of the 2008 budget include:
-- a high degree of GDP redistribution though the budget - 44.1
per cent of GDP for the revenue part and 40 per cent plus 1.1
per cent (the EU installment) for the expenditure part;
-- reduction of public spending by 12 per cent is an
insufficient step in the right direction: the association wants
20 per cent;
-- absence of planned reduction of insurance contribution in
2008. The association suggests that they be reduced to 30 per
cent and be divided equally (10 per cent each) between employer,
employee and state;
-- according to the association one particularly negative
feature of Budget 2008 is the establishment of lower threshold
of local taxes and fees without giving municipalities the right
to reduce them.

Government not ready to spent �500 M surplus

Yesterday (22 Nov)Government made a demand for permitting from the Parliament to expend 700 million BGN (350 million EUR) from the state budget's surplus.These money, plus the over doing of the state incomes, amounting on 304 million BGN (150 EUR), all becomes 1.004 billion BGN ( 500 million EUR).The ‘Democrats for a Strong Bulgaria' (DSB) leader Ivan Kostov claims the Government has no readiness to spent these money.It appears that now the Parliament has to sign an empty check, because in the demand was barely pointed that money will be spent for road infrastructure, telecommunications, energy, interest- free loans for the municipalities, but everything without specifying for what exactly and by which program that would happen.The deputy accused the government all their arguments during the school teachers' strikes, that extra expends will bring hyperinflation and finance collapse, are absolutely false.Asked what they would spend the surplus for, the Energetic Minister Rumen Ovcharov said it could be used for making a fuel reserve, for which Bulgaria has engagements toward EU.


S&P Confirms Bulgaria Rating at "BBB+"


Global credit ratings agency Standard&Poor's confirmed on Monday the long-term foreign currency rating of Bulgaria at "BBB+" with a stable outlook, the country's finance ministry said.The rating reflects Bulgaria's fiscal policies, continued reduction of foreign debt and the stable outlook for growth in the medium term.Despite being on track to record a current account gap of 20% of gross domestic product (GDP), Bulgaria's deficit is covered by net foreign direct investment, the agency noted.The country still has to improve the flexibility of its labour market, but the tight fiscal policies, and the stable outlook on inflation and external imbalances are behind the confirmed investment grade rating, the ministry said in a statement.


Dollar drubbing a threat to Bulgaria's dairy, machine-engineering industries

The record lows notched up by the U.S. dollar against the euro are hurting the business of Bulgarian companies that had managed to make a breakthrough on non-EU markets over the past couple of years, shows a Dnevnik survey.The food and machine-engineering corporations are feeling the biggest squeeze, said industry representatives. The company managers calculate the cost of power and input materials in euro but export in U.S. dollars and have to jack up prices to offset currency losses. Some companies hedge against future greenback losses by employing a fixed exchange rate.

Bulgarians are buying more cars

The number of new vehicles imported to Bulgaria will total 300,000 by the end of the year, say Bulgarian automobile importers. According to statitics some 150,000 new vehicles have been imported in H1.After the country's EU accession cars from EU countries don't have to be reported at customs offices, their new owners just have to register them with local traffick authorities.With the EU accession, new vehicles must also respond to some ecological requirements in order to receive registration.As of July 2007, vehicles must have the E-4 certificate. Cars can be registered for a temporary 6-month period with certificate E-3, but they must obtain the E-4 in order to receive full registration.This is why, people must ask for the E-4 paper when they purchase new cars. The certificate guarantees the car has low emission of harful gases.Nearly a third of the vehicles imported from the EU are registered by Sofia'a traffick authorities. This is one of the reasons for the enormous lines of cars waiting in front of these offices. Traffick officers register between 700 – 800 cars each day.Automobile importers say the number of both new automobiles and second-hand imported vehicles is iscreasing. New automobile imorts grew 30% this year, and old vehicles coming to the country are 50% more than last year.The peak period for imports of old cars was in the first four months of this year. Nearly 80% of cars that came to Bulgaria this year were brought by natural persons.The scheme for importing cars using the names of handicapped persons is already in history, police says.The new scheme that companies use to pay less taxes is not to list the vehicle as imported by the company, but by an individual, who declares it as its own and presents a false contract with a considerably lower price than the actual. According to Bulgarian legislation, companies pay much higher taxes to import a vehicle, than natural persons.

Number of cars in Sofia may reach 5 million in 4 years

he number of cars, traveling on the streets in Sofia during the day may reach 5 Million in 4 years, in case the registration of vehicles continues with the same rate and the number of migrating people continues to grow, the Chairman of the Executive Council of the Association of vehicle importers in Bulgaria Atanas Todorov said in an interview for Focus News Agency. ‘There are between 700 and 1,000 vehicles registered in Sofia daily, if this number raises to 1,500 next year, it is possible for the total number of vehicles in Sofia to reach 5 Million in 4 years.

Bulgaria among Europe's leaders in IPO


Bulgaria is third in initial public offerings in Central and Eastern Europe, immediately following Poland and Russia, data of investment intermediary Karoll show. The strong interest in new companies listed on the Bulgarian Stock Exchange encouraged the establishment of a specialised IPO fund. A few days ago Karoll presented its IPO Advance Fund. The offering of units in the collective scheme starts on Friday, November 23. There are several stages of the IPO wave in the region. During the third stage venture funds and equity investment companies start offering units on the market. This is what will happen in Central and Eastern Europe in the next three to five years, according to Karoll's board of directors chairman, Stanimir Karolev.

Bulgaria merges airports in Plovdiv, Varna and Burgas

The airports in the towns of Varna, Burgas and Plovdiv will be merged into one company, the transport ministry announced on Friday.The new company, Airport Plovdiv EAD, will be headed by the current Executive Director of the airport in the coastal town of Varna Yanko Yankov.The news came on a day that will be remembered by many passengers with the thick fog and cancelled flights, wreaking havoc at all major airports across the country and Sofia in particular.

Macedonian Prime Minister to pay official visit to Sofia


On November 28 Macedonian Prime Minister Nikola Gruevski is paying an official visit to Bulgaria at the invitation of Bulgarian counterpart Sergei Stanishev, the Government information service said Monday.The welcoming ceremony will be followed by a on-to-one meeting between the Bulgarian and Macedonian heads of government, as well as plenary talks between the two delegations.Gruevski is also scheduled to confer with President Georgi Purvanov and National Assembly Chairman Georgi Pirinski.The delegation headed by the Macedonian Prime Minister includes the Vice-president responsible for European integration Gabriela Konevska-Trajkovska and Imer Aliu, Deputy Prime Minister responsible for the Ohrid Framework Agreement implementation, as well Gruevski's advisor on European affairs Sasko Stefkov and Gruevski's Chef de Cabinet Martin Protuger.

Farmers to get EU subsidies next year

Farmers will get EU subsidies next year, even though their pay-out should have started from December 1, Bulgarian Minister of Agriculture Nihat Kabil announced in Brussels, 24 Chasa daily reported. 79,106 agricultural producers will allocate some EUR 200 million from the EU for 2007 for an area of 33 million ha. Kabil announced that Bulgaria would back the establishment of a crisis fund, which would be used for dry seasons. Bulgaria also backs EU Agriculture Commissioner Mariann Fischer Boel’s for lifting import duties on grain to make up for the market needs and to curb high prices.

Transport and Environment operative programs to be signed in Brussels

Transport and Environment operative programs will be signed at official ceremony in Brussels. The event will be attend by EU Commissioner of Regional Policy Danuta Huber, Bulgarian Minister of Transport Petar Mutafchiev, Bulgarian Finance Minister Plamen Oreshrski and Bulgarian Minster of Environment and Waters Dzhevdzhet Chakarov, FOCUS News Agency reporter informed. It sis expected the event to be attended by all Bulgarian MEPs too.

Jordan buys Bulgarian tobacco for narghile

Jordan wants to buy 400 tons of narghile tobacco from Bulgartabac. The commission was made during the Tabexpo 2007 world tobacco exhibition in Paris. About 450 companies from 60 states take part in the prestigious fair.The commission can be fulfilled no earlier than next year, said Ivan Bilarev, member of Bulgartabac's managing body.The now available quantities are not enough, because the tobacco for narghile is grown in special way, this tobacco is picked up at a late stage of ripening: it should be drier and not so flavoured in order it could absorb the aromas added in the narghiles.This year Bulgartabac will sell a total of 15,000 tons of tobacco.

Army upgrade contracts to inject �150 M in Bulgarian economy

The offset schemes incorporated into the equipment upgrade contracts handed out so far by the Bulgarian armed forces are expected to generate an economic effect of 158 mln euro. The windfall will be invested in know-how, licenses, the development of competitive products, joint production ventures and export assistance, Bulgarian economy minister Petar Dimitrov said Wednesday.The value of the offset activities so far is 46.727 mln euro. The offset clause of the armored personnel carriers contract awarded to U.S. company Textron obliges the contractor to build a 14 mln euro factory for electric components. The contract for transport jets with Italy's Alenia will create 80 to 100 jobs. It also envisages the construction of a contemporary hothouse. The investment in the Bulgarian economy resulting from the DaimlerChrysler contract for the supply of all-terrain vehicles for the army is valued at over 5 mln euro and was rendered as software services. A 19 mln euro project for the development of an electronic marketing platform has been launched under the contract for the supply of military helicopters. The platform will enable the exchange of information and the communication and co-ordination between military procurement companies.

99% of Bulgarian business is small and average

There are 22 000 firms in common in Bulgaria, as 99% of them are small and average. only 559 are the registered big companies. This came out on an ‘Alfa Research' Conference about corporative social responsibility.Only a small part of the firms have made their action public by going out on the Bulgarian fund exchange.From the made research became clear, about 70% of the firms consider being social responsible is a way to motivate their employees and to cultivate good relations with the local society.As a minus of corporative social policy leading, big part of the firms pointed the instable economy conditions.For now the corporative social responsibility practice still struggles for position on the Bulgarian market.Its main engines are big International companies and the migration specialists between the companies.Obstacles for its establishment is the lack of systematic social pressure for transparent business over the Bulgarian enterprises.  

By 2020-2025 Bulgaria's population will total 6 Mln people, 20% of which over the age of 65

By 2020- 2025 Bulgaria's population will total 6 mln people, 20% of which will be over the age of 65. The representatives of the Romani minority will be around 1 mln people.
“Can you imagine how a 6 mln nation will achieve an 8% economic growth?”Ivo Prokopiev, chairman of the Confederation of Employers and Industrialists in Bulgaria (CEIBG) asked the delegates at the confederation's general meeting.According to Prokopiev the country needs to introduce a series of measures in order to solve the demographic problem, starting with efforts to keep young people in Bulgaria via reforms in the education system, stabilizing the pension system, as well as integrating the Romani population. one of the organization's recommendations is for the setting up of a demographic support fund, which will be used when the situation becomes really bad. The money in the fund will come from revenues from privatization of unused government assets. Prokopiev also emphasized CEIBG's role as a mediator during the teachers' strike.CEIBG insists that public administration has to be reduced and licensing procedures need to be facilitate.Prokopiev pointed out that there is no system rating the adequacy of the work of regulatory bodies in Bulgaria. However, due to the pressure from the World Bank, The IMF, and the EC, the government will have to authorize a foreign consultant to rate the effectiveness of the public administration.One of the greatest challenges our country is facing in the mid-term perspective is joining the Eurozone. Prokopiev thinks this will happen by 2012-2013. In his words earlier dates are unrealistic, and by 2016 it will be too late.PM Stanishev and the mayor of Sofia Boyko Borisov sent greeting letters to the delegates of the meeting.The prime minister points out that the representatives of business in Bulgaria are those who produce the GDP and are the main force and partner in defining the direction of the policy led by the government, as well as a corrective force for measures taken towards economic development.

Bulgaria business: reduced CO2 quota is a disaster

Bulgaria's businessmen warned Wednesday of hard times coming for the industry if politicians fail to defend the country's greenhouse emission quotas at the press conference of the Bulgarian Industrial Association (BIA).The president of the organization Bozhidar Danev called for urgent actions against the European Commission's decision to cut on Bulgaria's greenhouse emissions by 37%. The EC said in October that the country's environment ministry did not offer compelling arguments in defense of its demand for a bigger quota."If the problem is not solved, Bulgaria will have to buy carbon credits and this will be disastrous for industry," Danev said and added that the opinion of the representatives of industry on the issue was brought to the knowledge of all Bulgarian MEPs.BIA also called for transparency in distribution of the emission quota in the country and declared the industry is ready to propose a fair distribution scheme."If quota distribution is left entirely in the hands of the state, this will be a premise for corruption," Danev said.Bulgaria is to submit in writing its objections over the reduced quota to the European Commission within a week.Last Thursday environment minister Dzhevdet Chakarov met EU Commissioner for the Environment Stavros Dimas in Brussels in a bid to protect the emissions quota. The two agreed to discuss the issue again at the UN conference on climate change that starts in Bali on December 3.

Yuppies return to Bulgaria

A growing number of young Bulgarians, who are under the age of 30, intend to leave Bulgaria and look for jobs abroad. At the same time, many Bulgarians are returning for good to Bulgaria. And those, who come, are not only the ones who failed, but many successful professionals, too. The information is taken from a survey made by Bulgarian Association for Surveys and Analyses (ASSA-M), commissioned by the Ministry of Labour and Social Policy."This year, predominantly young people and students chose to leave Bulgaria," commented the chairman of ASSA-M, Mihail Mirchev. Many of them are men with a secondary education diploma. Nearly 4,000 people were surveyed and the report shows that the mature Bulgarians prefer staying in their country, because they fear the severe competition abroad. Most of the Bulgarians go to Spain, the USA and Germany. The least preferred countries are France and Turkey. "Despite those facts, many Bulgarians return home," said Mirchev. "Those, who come back are not the ones, who 'couldn't make it abroad'. At present, many successful businessmen, managers and computer specialists are coming back to Bulgaria," added Mirchev. According to the survey, people, who intend to return to Bulgaria, expect an income in Bulgaria, similar to the one they get abroad. "Certainly, the employers should pay salaries that are by five times higher than the average salary in Bulgaria," said Mirchev.Bulgaria's Minister of Labour and Social Policy Maslarova also pointed to the fact that the employers were the ones to motivate the young Bulgarians stay and work in their country.

Bulgaria one of CEE countries with highest pay increase in 2008

The average increase of wages in the countries in Eastern Europe will be one of the highest in the world next year, shows research conducted by Mercers consultants company.Bulgaria is one of the countries, which are to see the highest pay increase in 2008 – 9.3%, according to prognosis. Inflation is projected at 4.4%, which means the actual pay rise will be around 4.9%. By comparison, the average wage increase in CEE is estimated at 6.9%. The pay rise in countries in Central Europe will be considerably lower, and will also be eaten up to a large extent by inflation. The Czech Republic will have the smallest actual pay increase – 4%, since inflation is viewed at 3.1%. Average salaries are expected to rise 6% globally next year, or 2 percentage points above inflation.The largest actual increase is expected in India, where salaries will rise 14% and inflation is projected at up to 4% - an actual increase of 10%.Logically, the slowest increase will be witnessed in the countries of North America and Western Europe, where salaries are currently way above those in the developing countries.The research covers 62 countries.A strong growth in salaries is expected in the region of Asia and the Pacific Ocean – 6.65%, or 3.3% adjusted for inflation.Outsourcing of businesses from developed to developing countries will continue as a trend, says Mercers.At the same time there will be a global demand for qualified specialists, and their salaries will rapidly grow, amidst competition between companies.Among developed European economies, salaries will increase the most in Ireland – 4.7%, which is 3.4% above prognosed inflation.









Austrian Post wants to invest in Bulgaria

Austrian postal operator ‘Oesterreichische Post' wants to get into Romanian, Bulgarian and Bosnian market in the coming 15 months, Reuters informed, cited by money.bg. We want to set up a network in the fragmented South-Eastern European market, company's Chief Financial Officer Rudolf Jettmar said on Tuesday. We want to fill in our blank spots in Bosnia, Bulgaria and Romania, Jettmar added.He also specified that the postal operator is aiming to take over private operators working in parcel delivery or distribution of advertising.‘Oesterreichische Post' has spent 210 million EUR on takeovers in the first 3 quarters of 2007. The Austrian Post is already present in Slovakia, Croatia, Hungary and Serbia. Osterreichische Post AG was founded on March 3, 1999 as a subsidiary of Post and Telekom Austria.Its core business activities are provision of postal and parcel services as well as handling of financial business in cooperation with BAWAG P.S.K., a partner of many years.The Austrian Post has a sales network that is unique in Austria. With comprehensive investments in modernization of post offices and the entire logistics, the business will continue to focus on customer needs and consistently move forward on its way from a public agency to a modern service company. New products and services will not only help ensure national market leadership in future, but shall also pave the way to international activities.

EBRD supports italians for hydro power project in Bulgaria

European Bank for Reconstruction and Development (EBRD) signed on Monday, November 26 an agreement to extend 54 million EUR loan to Italian energy provider ‘Petrolvilla'.The loan will be for the finance of a hydro power project in Bulgaria, Reuters reported.‘Petrolvilla' will build a cascade of 9 hydro power plants along the Iskar river, (40 km North from Sofia), with a total installed capacity of 26 MW.The project is on the amount of 80 million EUR.The European Bank will provide 34 million EUR of the loan, syndicating up to 20 million EUR to Unicredit Bulbank, Reuters informed. The power plant is foreseen to be completed in 2011 and targets to increase the use of renewable energy.

Sofia launches investment program to deal with traffic jams nightmare

Sofia mayor and the main architect of the capital city presented Sunday a new investment program, which provides for solving the problems with the hellish traffic jams."In order to achieve that aim, Sofia needs about BGN 3 B as one third of it will be collected by the taxes the citizens are to pay," Mayor Boyko Borissov said."I hope nobody will impede our work as everyone, who stands against the interests of two million people will have to bear the responsibility for that," he added.Traffic lights on Sofia roundabout will be removed according to the newly prepared program.There will also be constructed rings, which are to divert the traffic out of the downtown.When the capitals' underground reaches Mladost neighbourhood in about two years, the municipality considers holding a referendum over paid access to the centre of the city."In few years, the downtown will be just an attraction and life will be in full swing in the northern part, reaching Kremikovtsi district, where the new city is to be situated," Mayor Borissov explained.Up to EUR 10 B will be invested in development of the infrastructure there, the authorities said.

Carrefour tо build Mall in Burgas

Over 40 million EUR will invest ‘Carrefour Bulgaria' jointly with ‘MB Izgrev' in a new two- floor trade and entertainment center in Burgas, announces money.bg ‘Mall Izgrev' will include 8 400 square meters hyper-market of the French chain Carrefour and 15 000 square meters for other firm's shops. Common surface on which Mall Izgrev will be located is 13 acres.Except shops, the mall will also have fast- food restaurants, bowling hall for 200 people and children spot.Interesting is the parking conception of the Mall. The parking will be situated on two levels- one grounded for 660 cars and second for 611, located on the mall's roof. Reaching it will happen through a specially constructed ramp. Separate from this, building of new road and traffic light installation is previewed, in order to facilitate the clients reaching to the new trade center.


Balchik Dreams co to invest �130 M in coastal resort

Balchik Dreams, an outfit with Israeli co-owners, said it plans to develop a holiday community on a company-owned 40 ha site near the city of Balchik, on the Black Sea. The company highlighted the potential of Bulgaria's northern Black Sea coast yet unspoiled by overconstruction.Each of the 900 houses in the complex will have a built-up area of 160 sq m.The project, which is currently at the design stage, should be completed in four to five years.Balchik Dreams will shop the project to four types of buyers: Russians, Romanians, Brits and Bulgarians in the market for a holiday home.The company was specially incorporated in 2006 to implement the Balchik project.The owners of the project are ready to sell it either off-plan or at the very initial stage of development. It is currently engaged in negotiations to this end with a foreign investment fund.Three golf resorts and a host of vacation villages are currently under development along the stretch of shoreline between Balchik and Kavarna.

Germans pour �2 M in former barracks

A German company with an office in Bulgaria will pour two million euros in the reconstruction of derelict army barracks in the town of Simitli. According to the project, the former military facility will be turned into a modern business centre and an amusement park will also be built in the area. Four years ago, the Ministry of Regional Development and Public Works and the Phare programme of the European Commission approved the project of the municipality for the reconstruction of the military facilities, which also provides the opening of about a hundred job positions."We should use the potential of this new asset to the full by turning this place into an attraction for adults and kids alike," officials at the Simitli Municipality said.

Bulgarian IT company Nortek to invest $20 M in expansion by Mid-2009

Bulgarian IT company Nortek plans to invest some $20 million (13.5 million euro) into expansion of its Wi-Fi network countrywide by mid-2009 and plans to enter the markets of several neighbouring countries, company CEO Borislav Pantaleev said.We plan to build over 8,000 points of access in the biggest Bulgarian cities and open offices in Turkey, Macedonia and Romania," Pantaleev told SeeNews in an interview.Nortek will seek up to 15 million levs ($11.4 million/7.7 million euro) in an initial public offering (IPO) on the stock exchange in Sofia to back its expansion plans.We plan to float about 20% of our current capital," Pantaleev said and added that the IPO is scheduled for March or April next year.Nortek has a nominal share capital of one million levs, divided into 100,000 shares.The number of Bulgarian companies willing to go public has increased considerably since the beginning of the year, when the country joined the European Union. The large amount of foreign funds, which started flowing to the country's capital market, has helped the process.However, the liquidity of the bourse in Sofia is not high enough yet to provide comfort for foreign investors locking large sums of money in Bulgarian stocks, as it is hard for them to close their investments fast.We have a strong partner in the face of a U.S.-based telecommunication equipment producer that has outsourced part of its production to Bulgaria," Pantaleev said but declined to name the company.Thanks to this partnership, our annual turnover should reach some 12 million levs in 2007 and to grow to some 16 million levs in 2008," he said.Bulgarian construction company Expirian has a 69.3% stake in Nortek, while the remainder is owned by local accounting software developer Intelsoft.In 2007 Bulgarian IT companies Bianor and Specialized Business Systems (SBS) were listed on the Bulgarian Stock Exchange. Some experts say Bulgarian IT companies do not have enough fixed assets to place as loan collateral with banks, and bourse listing is the best option for those companies to raise funds for their development.The Bulgarian IT market has grown significantly in the run-up to the country's accession to the European Union on January 1, 2007. A total of $535.82 million were spent on information technologies in Bulgaria in 2006. The country's IT market is expected to grow to $791.2 million by 2009.

Bulgarian Intertrust to invest �60 M in lead and zinc co OCK

Bulgarian holding company Intertrust plans to inject 60 mln euro in the modernisation and expansion of subsidiary company OCK, the Kardjali-based lead and zinc producer. Intertrust has just signed a 10.8 mln lev contract with Ausmelt, an Australian producer of metallurgical technology, for the supply of new equipment for the lead production.The adoption of the Ausmelt technology will boost annual lead output more than twice to 60,000 tons in the second half of 2009.In addition to the capacity benefits, the Australian technology will also solve all environmental issues facing OCK, said Intertrust owner Valentin Zahariev.The upgrade of the installation will enable the capture of sulphuric oxide emissions which will be processed into sulphuric acid.In June this year, OCK contracted Finland's Outotec, a provider of technologies and services for the mining and metallurgical industries, to deliver a new technological solution that was expected to boost production capacity while reducing harmful gas emissions.The 25 mln euro contract value covers delivery and assembly. The project will double zinc production to 45,000 by 2009.Intertrust has also earmarked 60 mln euro for investment in its Inter Pipe subsidiary, a pipes manufacturer, and a further 30 mln euro for the rest of the group companies.Another large-scale investment project is a new cold rolling mill on the outskirts of capital city Sofia.A complex comprising two units for cold-rolled steel coils and one for zinc-plated steel sheets will be constructed over the next three years on the Inter Pipe site.The first two cold-rolled production units will be operational by the end of 2008. The third Inter Pipe factory will produce 0.25 mln tons of zinc-plated steel sheets annually. According to the business plan of the holding, group sales should reach 350 mln euro y 2008 with the earnings target at 25 mln euro.



Central Mall in Bulgaria`s Veliko Turnovo for sale

European Convergence Property Company (ECPC) investment fund was considering offers from possible buyers of the Central Mall in Veliko Turnovo, the fund said, in a statement to the London stock exchange.The sale was to be concluded in the beginning of 2008, investor.bg reported.According to the ECPC statement, the mall was almost completely let out.ECPC admitted that the construction suffered minor construction defects, which were being fixed by the constructor.The investment fund announced its intentions to sell the commercial complex as early as in Augusts 2007. By that time the fund sold its three malls in Romania to the German DEGI Deutsche Gesellschaft fur Immobilienfonds mbH (DEGI) for 110.5 million euro.ECPC explained its withdrawal from Bulgaria and Romania with quoted "unprecedented investment interest" followed by a decrease in profitability of the market, investor.bg said.

Investment rise to offset trade deficit


Bulgaria's foreign trade gap will continue to widen in the short term, mainly due to the import of energy resources and investment goods, Diana Naydenova of the ministry of economy and energy said at a seminar on the EU trade policy.A big part of the import volume is the result of increasing investment, which is accompanied by the purchase of machines, equipment and raw materials for production. According to experts, in the medium term Bulgaria will remain an attractive destination for investment. Until the revenue in the balance of payments remains high as a result of investment, the trade deficit will be offset. In such a case the trade gap is not dangerous for the country's macroeconomic stability, Diana Naydenova pointed out. Investment in Bulgaria exceeded EUR 3.8 billion by August.

























Company loans increase four-fold in Apr-Aug


The amount of loans taken by companies in Bulgaria in the period April-August 2007 increased four-fold, compared with the year-ago period, central bank data show.
Company loans for the first eight months of 2007 exceeded BGN 3.6 billion, up from just BGN 917 million for January-August 2006. According to specialists, the hunger for financial resources is due to the desire of Bulgarian businesses to enhance their productivity and expand.Despite the strong demand and the problems on the international markets, the interest rates for companies did not change substantially, unlike the rates for consumer and mortgage loans. The central bank's analysts expect that the rates will rise slightly in the next few months. However, the increase will be limited, due to the stiff competition in the banking system.Household loans jumped by BGN 2.2 billion in April-August 2007, compared with a BGN 890 million hike for the year-ago period. The rise was mainly due to the decrease in unemployment and the increase in wages.

Swiss company Eyes Ruse’s Heating Utility

Swiss company "Mechel International Holding" notificated the Commission for protection of competition for its plans to acquire state owned Heating Utility in Ruse announced KZK. For the time being the Heating Utility is owned by the Slovenian "Slovenske Elektrarne Holding".It is expected the acquisition to give a reflection on the power production, transportation and distribution markets over Ruse and the East industrial zone.The commission for protection of competition will decide come up with a decision.This is the second Swiss company so far with ambitions to improve and consolidate its positions on the Bulgarian market. Recently another Swiss company named "Wintershal Erdgaz Handelshaus Zug" filed a notification in the commission for the acquisition of Bulgarian „Deksia" Ltd. Now they became major stake holder in а company which operates with natural gas.


Mispol eyes Bulgarian, Romanian Markets


Poland's Mispol, a producer of pate and tinned meat, has announced plans to expand its activities on the Bulgarian and Romania markers, local press reported.Mispol's products are already on offer in Belarus, the Netherlands, Spain and the UK and the company is considering building a plant or carrying out acquisitions in Bulgaria and Romania.The company had been in talks with an acquisition target, but the negotiations had been discontinued, Mispol President Marek Piatkowski, told the Polish press.Talks are expected to be renewed at the beginning of next year.In the near future the company wants to concentrate on the group's consolidation and other investments, including production capacity. Piatkowski estimates that in 2007 the Mispol group revenues may tower to PLN 150 M (EUR 40.5 M).The Mispol group includes: Agrovita, a leading Polish producer of convenience meals, Bono, a Czech pet food producer, and Grodex. The group will soon be joined by PMB, a smoked meat producer.


Intel world ahead

The Vice-chairman of Intel John Davis and the chairman of the State Agency for information technologies and communications Plamen Vachkov will sign today a memorandum for the beginning of the “Intel world ahead” program in Bulgaria, informs lev.bg.The programs aims at overcoming the digital gap and increasing the competitiveness and the development of the economy by letting more people have possibility for computer and Internet access.

Bulgarian Deni Lighting plans to go public


Bulgarian lamp retailer Deni Lighting plans to debut on the local stock exchange under a strategy to boost domestic operations and expand its retail network, said its co-owner, Milena Radeva. The company has signed a partnership contract with Philips Lighting and has built a 4,000 sq m representative office in the Black Sea city of Burgas. The building accommodates a showroom, storage facilities and an administrative section. The company, which operates in southeastern Bulgaria, hopes to raise funds on the bourse to add retail outlets in other cities. The recent opening of its Svetomarket store in Sofia was a step towards a national coverage. Other local retailers eye bourse listing, too. Home appliances chain Zora plans to go public in 2008, whereas supermarket operator CBA Asset Management already performed an initial public offering (IPO) of 3.9 million new shares to back its retail network expansion. Deni Lighting (www.denilighting.com) is a leading lighting retailer in Bulgaria boasting key partnerships with ESTO Lighting, Lena Lighting and Brilux.


Energy and Energy Saving Fund to raise capital

Local special purpose vehicle Energy and Energy Saving Fund (EESF), controlled by power engineering company Enemona, said it will raise its capital by up to 50% through the issue of 325,000 new shares with a nominal value of 1 lev each.The capital of the company currently stands at 650,000 levs. The minimum subscription target is 260,000 shares. The maximum proceeds are estimated at 1.04 mln levs.The proceeds will be used to buy from Enemona receivables under contracts with efficiency service companies (ESCOs) signed in 2007.An energy service company, is a business that develops, installs, and finances projects designed to improve the energy efficiency and maintenance costs for facilities, assuming the risk that the project will save the amount of energy guaranteed.Enemona has a 7 mln lev portfolio of ESCO contracts.A 6 mln lev credit from the EBRD will also be used to finance the buyout of the contracts.

Investors submit orders for nearly BGN 1 Bln  in Enemona IPO


Elana Trading and UBB have received orders for subscription of shares in Enemona IPO that total nearly 1 bln leva (511.291 mln euros) in value.All investors have submitted proof of 100% of the funds. The price was set at 16.80 leva, which was the previously announced maximum. The IPO proceeds are estimated at 33,600,000 leva (17,179,407 euros).The value of orders exceeds the value of the issue by 30 times. The 2 mln shares were allocated among 4,100 natural persons and legal entities. 8% of the stock was subscribed by foreign investors (both physical persons and legal entities).Limit orders at a maximum of below 16.80 leva, accounted for just 0.16% of all orders. Almost 65% are market orders submitted at a certain price or for a certain amount of shares. Payment starts November 28 (Wednesday).


Italian co buys 60% stake in Bulgaria dairy maker MyDay

Italian company Cola Dairy Products is acquiring a 60% stake in Bulgarian dairy products maker MyDay, said the local anti-trust authority which has been asked to approve the deal. The news was confirmed for Dnevnik by MyDay manager Joe Jabra. Regulatory approval is the last step before the finalisation of the deal.The last acquisition of assets in the local dairy industry involving a foreign corporation was the take-over of United Milk Company by Greece's Vivartia. After the deal for MyDay is completed, the company will be injected with funding for the modernisation and streamlining of production, the development of new products and markets. The MyDay factory in Sofia will absorb 2 mln euro in investment in 2008, said Jabra. The MyDay company emerged after the pullout of Germany's Meggle which had a dairy joint venture in Bulgaria with Jabra. In December 2006, the German company transferred its stake to Jabra and the production facilities of the joint venture in Sofia started to manufacture under the MyDay brand.

Vivatel announces 1 million clients

Vivatel announced it had 1 million clients and held 10 per cent of the mobile telephone services' market in Bulgaria.The announcement was made by Vivatel senior manager Anna Pencheva on November 27. She did not say what percentage of the clients used pre-paid services, but said that the proportion between prepaid service and subscriptions was approximately equal for all mobile operators, Bulgarian News Agency BTA reported.Pencheva explained there was a tendency towards increasing the share of clients on subscriptions because of special offers from operators.From November 28 2007 until January 15 2008 Vivatel would give its new clients who would choose a Vivatel Together subscription plan an original DVD with the film “300” as a present, Pencheva said as reported by BTA.

Germanwings offers bargain flights from Sofia to London, Paris, Berlin

Low-cost carrier Germanwings announced the launch of bargain flights from Sofia to three European capitals with transfers at the airport of Cologne/Bonn."The Smart Connect service will be introduced during the new winter season and is expected to save up to 30% on the ticket price," Andreas Engel, a representative of the company, said at a press conference on Wednesday.The average one-way fare from Sofia to Paris, Berlin, London and Dresden via Cologne will total EUR 60, including all taxes and charges.
The company, which has been servicing flights from the capital Sofia since the end of March, reported 92% occupancy rate aboard its planes.

Father, son pocket nearly BGN 800,000 from stock trade

Valentin Kanchev and his son Anton Kanchev raked in nearly BGN 800,000 profit after selling 20,000 shares in essential oil and cosmetic product maker Lavena AD to a Dutch investor for BGN 1 million. The Kanchevs own Viola OOD, which is a shareholder in Lavena. Valentin has also served as deputy chairman of Lavena's board of directors for the last three years.Viola sold 20,000 shares of the capital of Lavena in November 2007 to Dutchman Robert Maks, as the Pari daily wrote. The deals were sealed on November 2 and 15, when the average price of Lavena's stock stood at BGN 50 per share. The Kanchevs acquired their 25-percent stake in Lavena on May 16, when the average stock price of the company stood at BGN 11.74 per share. This means their profit from the sale of 10% in Lavena amounts to BGN 765,200. Viola still owns 15% of the capital of Lavena. If the Kanchevs decide to offload Viola's remaining stake in Lavena at a price of BGN 50 per share, they will pocket some BGN 1.2 million, which means that their return amounts to 400%. Lavena's stock price depreciated slightly to BGN 48.01 per share on Wednesday.

Tokuda Hospital rakes in BGN 13М revenue Jan-Sep

Tokuda Hospital Sofia, regarded as the biggest investment in the Bulgarian health-care sector, posted BGN 13 million revenue for the first nine months of 2007, Ekaterina Borissova, financial director of the hospital, said. The hospital treated a total of 13,000 patients and performed more than 7,000 surgeries during its first year of operation. This puts it among the leading medical facilities of its parent company Tokushukai Medical Corporation, Yavor Drenski, administrative director of Tokuda Hospital, said.

Romanian companies move to Bulgaria

Romanian firms plan to move their business to Bulgaria, because of the better business climate in our country, Alexander Djoganov, head of the Small and Medium-sized Enterprises Directorate of DSK (State Savings Bank,) warned at a conference in the framework of the Finance for Everybody exhibition in Sofia's National Palace of Culture. This year the emphasis in on the banks' participation in European projects.
The Bulgarian firms may well remain without European funds because of their unpreparedness to absorb them. According to Djoganov, only some eight to nine percent of the firms registered in Bulgaria have an ISO certificate. Another reason for the business' low potential is its poor informedness on the issues concerning the EU funds.



















2008 budget with many bywords

Publication: Banker Daily
Provider: Financial Information Agency

Nine hours of debates in the National Assembly's plenary hall (the breaks included), filled with praises, negations and black omens, marked the approval of the 2008 Budget Bill on first reading. Among the huge avalanche of words, poured by the heads of parliamentary commissions, MPs from the left, right and centre, and ministers, it tuned out that the worthy statements, analysing the Government-proposed numbers in the macroframe and the individual items of the budget's revenues and expenditures sides, were quite a few. That is why they made an impression. In the beginning of the session the rulers tried and regretfully succeeded to put the plenary hall to sleep by short but monotonous readings of the stances of the various parliamentary commissions on the draft bill. Obviously irritated by that fact, DSB's leader Ivan Kostov said the National Assembly did everything possible to suppress any interest towards the debate on the budget. "If you could hear and see how this session is being presented by the radio and television you would realize what antipathy it creates in everybody, no matter whose voter he is. What happens here repels any interest on the most important debate of the year - that on the financial policy", Mr. Kostov said. However, Lyuben Kornezov who was chairing the session immediately countered him, saying that this way of presenting the Budget Bill is a practice affirmed through the years. Finance Minister Plamen Oresharski presented in detail the main priorities of the 2008 Budget, calling it "a budget of stability and development". In fact, the MPs from the ruling coalition or at least most of them tried to make that phrase a byword for the draft bill. Mr. Oresharski said that the constantly increasing current account deficit in the balance of payments had forced the Government to uphold a higher budget surplus, planned to reach 3% of GDP in 2008. That is in fact the Cabinet's main instrument for maintaining financial stability, which basic enemy is the current account deficit. That provoked DSB's leader Ivan Kostov to violently criticise the rulers. Due to the entirely unrealistic macroeconomic indicators on which the Treasury's calculations have been made, the surplus will be much higher than projected, he pointed out. But that would hardly surprise anyone because for years on end the reported surplus exceeds many times the projected one. And the comparatively real budget surplus which is not mentioned in the budget bills and which the Government aspires to is a way to insure against additional unplanned expenditures. What is important in this case is that Mr. Kostov explained for the first time the mechanism according which the rulers do that. In that way he affirmed the impression that as before, the State's budget is again intransparent and the figures in it are far from realistic. That gave grounds to the opposition to call the budget artificial and deceptive. Thus, the 2008 Budget Bill got many and contradictory bywords. Of course, there were absolute stupidities in the statements made by some of the MPs. If Stefan Sofiyanski sat for an economics exam and, like he did in the plenary hall, he said that the high budget surplus resulted in inflation he would fail the exam immediately. However, everyone can say everything in the National Assembly and will not be punished for his words. While Sofiyanski was speaking at the tribune, the financial minister left the hall failing to hide his contempt. Most of the MPs representing the ruling majority looked quite pitiful while trying to make extensive declarations in defence of the budget proposed by the Government. In fact, most of the debates can only be described as "blah blah..." The other priorities set in the budget sounded declaratory when said by the ruling coalition, too: accelerated modernisation of the infrastructure through considerable growth of the public investment; extension of the reforms in key social sectors such as healthcare and education; financial stability of the scientific and development programmes. "We are planning an economic growth that remains about 6.4 per cent. We expect falling inflation pressure compared to 2007, reaching 4.5% at the end of the period, or 6.9% on the average for the year", Mr. Oresharski said. Foreign investments will amount to EUR4.7BN, the financial ministry expects. The members of the coalition partner, the National Movement Simeon II (NMSII), joined the debates with criticism. They declared that investments should be the top priority of the budget. "Our economy is expanding faster than it should because of the extreme consumption. It's normal that this happens in two years or one year, but not in a shorter period of time. Expenses are too inflated - by 20%, or BGN4BN, compared to the previous year. More attention should be paid to encouraging production", Milen Velchev told the BANKER weekly. However, he did not say how this might happen. one alternative, of course, is the fast and significant reduction of the social insurance rates on which the opposition insisted, too. However, this measure does not provide a quick solution to the problem about attracting large investors who would establish manufacturing of goods for export in Bulgaria. As a whole, the 2008 draft budget looks like one taken out of a matrix, copied and pasted from previous documents, with some small corrections, members of the opposition noted. It is true that the matrix was created back in 1999 (as the leader of Ataka, Volen Siderov, highlighted many times) by the International Monetary Fund and the World Bank as the only possible fiscal model that guaranteed stability to a country in a currency board. But even then the two international institutions declared that the model could not act for a long time if there were no big reforms in the administration, judiciary, healthcare and education. These reforms did not happen or are only happening in part which is why the Government headed by Sergey Stanishev is now unable to achieve a high economic growth in combination with low inflation and a one-digit deficit on the current account, even though it is applying a tested budget matrix. Under the new conditions it is no longer efficient.

A “second generation of reforms” is under way

Publication: New Europe
Provider: News Corporation S.A.

The reforms of the first generation have already been concluded – Bulgaria attracts foreign investments, offers good business opportunities, and low taxes. Now the order of the day is obviously reforms of the second generation, which are not so much connected with bread and money, or territories, but rather concern the quality and perfection of the things currently going on.This is what Peter Dimitrov, Minister of Economy and Power Engineering said at the opening of the 10th Economic Summit Forum of the Central European Initiative in Sofia. The minister pointed out that by the end of the year inflation would be 10 percent, whereas the current account deficit would reach 20 percent of the Gross Domestic Product. Prices would continue to rise until they reached Central European levels, Dimitrov said.He pointed out that the investment attractiveness of the region would mean a great amount of capital flow, mainly from Western Europe, as well as from elsewhere in the world, but it was all up to Bulgaria whether some regions would turn into depots from dirty and low-efficient productions, or whether they would turn into generators for accelerated hightechnology development.Ivailo Kalfin, deputy prime minister and Minister of Foreign Affairs, pointed out that the Bulgarian economy had been developing at a very dynamic rate which was the best in the last 30 years and there was a stable tendency for this to go on. Bulgaria was trying to become an important transport centre of commodities and energy by developing its infrastructure and would set about exploring the possibilities for public-private partnership, the foreign minister said.The deputy prime minister pointed out that the Bulgarian stock exchange would work with a new system from next year, which would give the possibility for it to keep in touch with the stock exchange markets all over the world. A work team had already been formed, which would create an energy stock exchange in Bulgaria. However, all these projects were connected with the work of all countries in the region, in order for them to be productive, Kalfin pointed out. It also became clear at the forum that Bulgaria had a lot to catch up on concerning investments in energy-saving technologies, so as to reach European standards. The tendency showed a decrease of the difference in energy intensity between Bulgaria and the 25 EU member states, but the primary energy consumption in the country remained 93 percent higher than the average level of the EU-25, whereas the final one was 43 percent more than the European levels, Tasko Ermenkov, executive director of the Energy Efficiency Agency, said in a session dedicated to energy efficiency. The households in the country lived with an energy comfort level that was twice as low than that of Central European countries, he also added, and went on to say that household life expended 23.5 percent of the energy consumption in the country.In Bulgaria, half of the finances allocated for energy saving, went for replacement of window casings in buildings, Gianpierro Nachi from the European Bank of Reconstruction and Development (ERBD) said. EBRD has granted more than 50 million levs for high efficiency projects. Households came third in consumption, after industry and transport, which expended 37.2 and 28 percent of the energy respectively. The forecasts pointed to an increase of harmful emissions in the next 10-15 years, which made it necessary to improve energy efficiency, Paul Wade of the International Energy Agency pointed out. He also predicted the need for an increase of investments by almost USD 20 billion in this area. Currently, in the new socalled passive buildings, the decrease in energy consumption could reach up to 75 percent, and buildings were likely to be constructed that had zero consumption because of the use of special technologies, Wade said. He said that the basic obstacles standing in the way of the successful introduction of energy efficiency were the lack of information about the ways of saving energy and also the absence of good initiatives.