BULGARIAN ECONOMIC TOP NEWS DIGEST
WEEKLY REPORT ( 7 – 14 DECEMBER 2007)
Sections/headline briefs:
MACROECONOMY:
· EU commission approved 'Belene' NPP construction
· Bulgaria to start building Belene Nuke in 2009
· Serbia wants a share in Belene Nuke
· Contractor, NEK reach agreement on Belene NPP
· Bulgaria opposes EU utility monopoly break-up plans
· Natgas price to go up by 16% as of 2008
· Energy ministry says Bulgargaz gas hike proposal overblown
· Energy commission projects 8% hike in heating prices
· Bulgaria utility regulator rejects heating price hike
· 'The Economist' on a round table with Bulgarian government
· Foreign experts recommend to cabinet, central bank to prepare action plan to curb high inflation
· Bulgarian inflation for November is up to 12.6%
· Bulgaria has no monetary instruments to control inflation
· Bulgaria has no money to build Trakia highway
· Final version of Trakiya concession agreement must be ready till the end of the year
· Bulgaria & France united about the EU's wine reform
· Brewers expect 11% to 14% beer sales increase
· The Chinese to drink Bulgarian rakia
· Soft drinks market to grow by 16% this year
· Price of bread reached up about 35-40% of the bread price in the EU
· Bulgaria lacks unified food control
· Industrial sales in Bulgaria up 10.9%
· Exports increase by 9%, imports, by 18% Jan-Sep
· Bulgaria's foreign trade deficit stands at 5.8 billion EUR in Q3
· Bulgaria runs trade deficit of BGN 9,900 M in Jan-Sep 2007
· Net FDI inflows fully cover CA gap in Jan-Oct
· Bulgaria tops world house price growth
· Nearly half of Bulgarians in big cities have taken a consumer credit
· Bulgarians are Europeans, but not exactly
· Low incomes main problem for Bulgarians
· Employers and employees in Bulgaria agree on salary raise
· More than � 2B to flow into Bulgaria’s economy for transport development
· Car crashes in Bulgaria cause damages of � 500 M annually
· Two cigarette factories facing closure
· Sofia loses three billion levs in case of an earthquake
· Bulgaria on a Christmas shopping spree
· Wages raised by 17.6%
· Red business is not myth: former Deputy Prime Minister
· Bulgaria's political parties and judiciary still seen as most corrupt
· Bulgarian criminality invested �100 M in past local election
· Bulgaria absorbs only 10% of EU funds
· Bulgaria to establish national committee of the World Petroleum Council
INVESTMENTS:
· USA invests $ 200 M in municipalities with Military bases
· Three solar parks to be built in Bulgaria
· Maritsa Iztok Mines to invest BGN 91M-plus in 2008
· APRI Sviluppo to invest in alternative energy projects
· Germans to build modern hospital near Pernik
· Salu-D investing in Pchelin area spa hotel
· Greek furniture chain comes to Bulgaria
· Russians buy up Bulgarian winter resorts
· Holiday village to be built near Byala
· Sviloza to invest � 300 M in new assets
COMPANIES:
· Mercedes Benz steps in Veliko Turnovo
· Bulgargaz buys stake in Romanian peer Transgaz
· Trace Group to set up subsidiary in Kardjali
· Toplofikatsia Sofia to book BGN 22M loss in 2007
· Only KG Meritime Shipping allowed to next stage of the competition for the privatization of 70% of Navigation Maritime Bulgare
· Bulgaria government to buy more Microsoft licences
· Bulgarian retail group K&K Electronics to open outlet mall in Sofia
· Footwear retailer Salamander eyes Bulgaria
ANALYSIS:
· European Commission makes recommendations to Bulgaria about Lisbon strategy implementation
· Bulgaria is one of Europe's biggest prostitute exporters
Articles:
MACROECONOMY:
EU commission approved 'Belene' NPP construction
European commission gave favorable estimation for NNP Belene.The commission has decided to give positive opinion to the demand of Bulgarian National Electric Company (NEC) to build a new nuclear plant in the area on Belene town, according to the annexes 41 and 44 of European contract.According to these demand, every investment connected with nuclear activity have to be confirmed by the Commission, which should approve with a report. Now the European Commission estimated the investment covers the EU’s contract’s demand for nuclear energy.
Bulgaria to start building Belene Nuke in 2009
Bulgaria will be able to start construction works on the planned Belene nuclear power plant no sooner than 2009, the head of the country's nuclear regulator said on Monday.
The regulator is yet to rule on the technical details of the project and the proposed safety measures, said Sergey Tsochev, who chairs Bulgaria's Nuclear Regulation Agency.On Friday, the European Commission said it cleared Bulgaria's plans to build the plant at Belene on the Danube, using Russian reactors, but that is far from the final approval needed for it to go ahead, Tsochev added.He is confident the project will not make Bulgaria dependent on Russian energy sources, even though a Russian company, Atomstroyexport, was picked to build the two 1000 MW third-generation reactors.The Commission also stressed the need for diversified supply sources and plans for the long-term management of radioactive waste.Bulgaria plans to retain control with 51% held by power grid operator NEK and the rest sold to a strategic investor, with Czech CEZ, German E.ON and RWE, Belgian Electrabel and Italy's Enel all vying for it.With the European Commission giving its approval, Bulgaria can now apply for a government-underwritten EUR 300 M loan from the EU's Euratom agency.The country also plans to borrow a similar amount from the European Investment Bank (EIB), while government officials have earlier claimed that they have already secured EUR 250 M in funding for the plant from BNP Paribas.The total costs of the project are estimated at EUR 4 B. Bulgaria decided to unfreeze its plans to build the plant in 2004, having mothballed them a decade and a half earlier, to compensate for shutting down four older Soviet reactors at its Kozloduy facility at the request of the EU, which the country joined in January.
Serbia wants a share in Belene Nuke
Surprisingly enough, our neighbour, Serbia, showed interest in investing into NPP Belene project. Danilo Vucetic, Ambassador of Serbia and Montenegro in Sofia, who visited the town of Dobrich, broke the news.Mr. Vucetic said Serbia did not have nuclear energy projects, but wanted to invest in the Belene project through other companies, who hold shares in the nuclear power plant."The construction of NPP Belene will start in 2009 at the earliest," said Sergey Tsonchev, Director of Bulgaria's Nuclear Energy Regulatory Agency.According to him, Brussels' approval of the investment plan for the project does not mean that it is given a green light. The Belene project is still to be approved by the Nuclear Energy Regulatory Agency.
Contractor, NEK reach agreement on Belene NPP
Russia's Atomstroyexport, which is the chief contractor for the Belene nuclear power plant (NPP), and Bulgaria's National Electric Company (NEK) have agreed on the price of the equipment on the site of the future N-plant, the Pari daily learned. The price was one of the main issues hampering the closure of the final contract between the parties. NEK assessed the equipment, which was delivered before the project was shelved in 1991, at some BGN 300 million. Atomstroyexport, however, said the equipment cost half the amount. According to Pari's sources, the parties agreed on a compromise price.
The contract has to be approved by the council of ministers. Most probably the deal will be closed officially during the visit of Russian president Vladimir Putin. After the contract is finalised, Bulgaria will choose a strategic investor for the project, which will receive up to 49% of the shares. The company will be picked by NEK but the final decision will be taken by minister of economy and energy Petar Dimitrov. Now that the Belene NPP project has been approved by the European Commission, many banks express readiness to provide the first EUR 250 million financing, the Pari daily learned.
Bulgaria opposes EU utility monopoly break-up plans
Officials from the Bulgarian energy ministry last week presented in Brussels the country's position against EU plans for an ownership-based break-up of gas and electricity production and distribution which are part of the community strategy for further market liberalisation. The EU executive has no yet taken a final decision on the unbundling plans which, according to Bulgarian officials, are also opposed by Germany, France, Austria and Latvia.
Natgas price to go up by 16% as of 2008
The price of the natural gas may go up by 16% as of the beginning of 2008, rather than by the 33% suggested by Bulgargaz, Galina Tosheva, deputy minister of economy and energy, said. The ministry's estimates show that the price hike demanded by the state monopoly is unreasonable. Some 9% of the price increase suggested by Bulgargaz may be offset by the declining value of the US dollar, according to Tosheva.
Energy ministry says Bulgargaz gas hike proposal overblown
After recrunching the numbers, the Bulgarian energy ministry has come up with a domestic gas tariff increase lower than that eyed by gas distributor Bulgargaz from January 1, 2008. Pricing in current gas inventories and U.S. dollar fluctuations, the energy ministry said gas tariffs should be revised upwards only by 16%. That compares with the 33.5% increased proposed a month ago by Bulgargaz.The gas distributor is scheduled to announce Monday the exact tariff hike it has proposed to the State Energy and Water Regulatory Commission.The gas company has since back-pedaled, revising the hike down to 26.5% but sources form the commission told Dnevnik the maximum adjustment that the regulator is likely to sanction is up to 20%. Deputy energy minister Galina Tosheva said Bulgargaz factored in a U.S. dollar/lev exchange rate of 1/1.44 while the energy ministry calculations are based on a rate of 1/1.33. The gas distributor also failed to take into account the Chiren gas repository inventories which were stocked at lower than the current prices which allows for a further increase cut.
Energy commission projects 8% hike in heating prices
The state energy commission forecast that heating prices would increase in the range of 5% to 8% during the next heating season. The prices will remain flat until the spring of next year. The increase is conditioned on the planned price hike of the natural gas as of Jan 1. The price of the natural gas accounts for some 75% of the heating price. Head of state energy commission Konstantin Shushulov warned last month that a possible increase in heating prices would lead to higher electricity tariffs due to price links to the cogeneration business of the heating utilities.
Bulgaria utility regulator rejects heating price hike
Bulgaria's utilities regulator DKEVR said on Tuesday it would not allow heating price hikes before July, but refused to speculate on the proposed natural gas hike.DKEVR will not allow heating utilities to charge more for their services, regardless of the outcome of the request submitted by Bulgargaz, which has asked the regulator for a 26% gas price hike, arguing it was justified by the rising international fuel prices, DKEVR deputy chief Valentin Kirchev said.Bulgargaz, the state-owned gas monopoly, submitted its request on Monday, prompting the regulator to launch its own review.Kirchev refused to comment on the size of the possible hike, but reiterated that existing regulations do not allow heating utilities to raise prices during the winter months."Any forecasts as to how much fuel prices will rise, and central heating as a consequence, are nothing but pure speculation," Kirchev said.In the meantime, nine heating utilities made a joint statement on Tuesday asking for a change in regulations, allowing them to raise their fees when fuel prices are hiked, since natural gas is the main energy source they use.The utilities have warned they could go out of business if the regulator allows the massive hike requested by Bulgargaz, but does not compensate them in some way.DKEVR will rule on Bulgargaz' request on December 17.
'The Economist' on a round table with Bulgarian government
Authoritative British publisher ‘The Economist' organizes 7thbusiness round table discussion with the Bulgarian Government, announce money.bg Meeting starts today in ‘Sheraton' Hotel, and will continue for 2 days. In the forum frames will be presented new tendencies in the corporative strategies for new-appearing markets and the influence of the global credit limits over Bulgaria.It is expected economical and business prognoses for Central and Eastern Europe to be proclaimed on the round table discussion.Attendance in the forum had already confirmed President Georgy Parvanov, Finance Minister Plamen Oreshareski, Economics and Energy Minister Peter Dimitrov, Foreign Affair Minister Ivailo Kalfin and Bulgarian National Bank (BNB) President Ivan Iskrov, also representatives of business society in Bulgaria.
Foreign experts recommend to cabinet, central bank to prepare action plan to curb high inflation
The cabinet and the central bank have to draw an action plan to curb the high inflation, Craig Otter, former emerging markets analyser and current editor in the Economist Intelligence Unit, told reporters Tuesday. Otter is one of the participants the Seventh Business Roundtable with the Government of Bulgaria: Making EU Membership Work for Business, organized in Sofia by the Economist Intelligence Unit. The event continues until December 12. The inflation rate is important given Bulgaria's plans to accept the euro, which should take place swiftly; thus, inflation in Bulgaria should be commensurate to that in the EU, Otter said. Growing inflation is indirectly related to the growth of salaries in the public sector and with the salaries-prices ratio. Otter warned that the Bulgarian economy could face risks if the cabinet yields to the demands to increase social sector financing. If inflation keeps its levels of the past several months, this will have an impact on labour and salaries costs, on exports and would eventually jeopardize the structure of the currency board, he said, noting that this does not constitute a potential risk in the short term. Otter recommended that the government make a political and economic commitment to guarantee the stability of the currency board and the acceptance of the euro. The expert also noted the need for the government to identify new areas to attract private investment in greenfield assets. Other challenges facing Bulgaria are the increase of exports and improvement of labour productivity. Chief Executive Officer and member of the Board of Directors of Eurobank EFG Anthony Hassiotis stressed the need to continue the reforms in Bulgaria, including the reform of the judiciary, so as to retain the pace of foreign investment attracted to Bulgaria. Eurobank EFG has invested more than 400 million euros in this country.
Bulgarian inflation for November is up to 12.6%
Bulgarian consumer price inflation increased 12.6% year-on-year in November mainly due to high food prices, which have pushed inflation to double digits since August, statistics data showed on Wednesday, cited by Reuters. The consumer prices rose 1.6% on a monthly basis, compared with a 0.6% rise in October. Food prices increased 2.3% in November, mainly due to a spike in the prices of flour, bread and vegetables.We remind you that a severe drought slashed Bulgaria's grain and other crop harvests. Prices of non-food items were up 1.4% and services’ prices increased 0.5% on the month. The inflation was 11.4% on annual basis in November and 1.8%on a monthly basis.
Bulgaria has no monetary instruments to control inflation
At the moment Bulgaria has no monetary tools to control the inflation. Government has no device through which to control the prices raise, except ones of the energy monopolies, says Luchezar Bogdanov, co- director of 'Industry Watch' for Darik daily. His comment concerns to the foreign economists' recommendation, Cabinet to work out anti-inflation policy in order not to threaten the currency board.‘Bulgaria is under a currency board. We have actually accepted the Euro as a currency exchange unit on practice 10 years ago. So from now on inflation is a result only of change in the incomes, changes in international prices and the Bulgarians' wellness and, of course, changes in the foreign investments influxes. None of these indicators could be controlled direct from the Government without this to be harmful for the economical raise. If now someone decides to decrease inflation with some macro economical steps, this would mean forced impoverishment and violent restraint for business and increase.Of course, one of the things government could still do is to control expends and in that way to control prices of main communal energy monopolies. What we talk about is controlling prices of electricity, water and gas supplies, but although this is a limited part of social consumption. From now on it is not clear what government could do.' considers Bogdanov.
Bulgaria has no money to build Trakia highway
Bulgaria does not have the financial capacity to construct Trakia highway, it emerged at the presentation of Transport operational programme. According to Bulgaria's Finance Minister, Plamen Oresharski, money for the highway was not planned in the budget, which means that Bulgaria cannot build the key road on its own. Trakia highway's future is still uncertain. on Thursday the Council of Ministers is expected to finally vote on the concession agreement with a Portuguese consortium. If the Cabinet gives a green light to the scandalous deal, a new annex to the contract will be signed after January. Further negotiations with the Bulgarian-Portuguese consortium will be necessary, sources told the Standart.
Final version of Trakiya concession agreement must be ready till the end of the year
Conclusion version of Trakiya concession agreement must be ready till the end of the year and implementation of three from the five lots must start in the beginning of the next year, Bulgarian Regional Development Minister Assen Gagauzov announced at a press conference Focus News Agency reporter informed. The Minister sighed Wednesday draft decision with which Ministry of Council will allow concession at its next sitting.
Bulgaria & France united about the EU's wine reform
Bulgaria and France have remarkably similar positions regarding the European commission's reform in the wine sector.The two countries have a common position regarding the European commission's suggestion for compensation under the vineyards uprooting program, which aims to reduce the maximal percent of the areas from 10 to 8 in three years.This announced today Nihat Kabil, Minister of agriculture after a meeting with his French colleague Michel Barnier, cited by BNR.The two countries support also the suggestion separate budgets to be provided in the national packages which to be only for the promotion and advertising of European wine in third countries.Minister Barnier is on a 2-day visit under the invitation of his Bulgarian colleague.BNR reminds that in 2005 and 2006 Bulgaria has realized a positive trade balance with France – respectively $ 19.94 mln and $ 33.53 mln. In 2006, the export for France has increased with 34.3% compared to the previous year.
Brewers expect 11% to 14% beer sales increase
The broad entering of foreign beer brands from the European community didn’t reflect Bulgarian beer brands sales in the first year of the Bulgarian membership in the EU. on the contrary, 11 – 14% increase in beer sales would be registered this year, President of the Council of the Union of Brewers in Bulgaria Vladimir Ivanov said for Focus News Agency. on the whole, the first year of European membership had good influence on the brewing industry in Bulgaria. The brewers had been prepared concerning the technological equipment, diversity of brands and quality of Bulgarian beer, he added.
The Chinese to drink Bulgarian rakia
Slivenska Perla - one of Bulgaria's finest brands of rakia - will be exported to China. The Vini Sliven winery will launch the export from next year. Valeri Chulin, Vini Sliven CEO, told the Standart that the deal had already been finalized. In addition to Slivenska Perla, Vini Sliven also plans to export Gin and two brands of vodka - one traditional and the other one - the favorite for the fans of FC Levski "Blue Selection". "Chinese market is a very specific and difficult market. I am glad we managed to make a breakthrough with our spirits," Mr. Chulin said also. Vini Sliven has already established a niche on the Chinese market selling wine, bottled and on draught, and the company also exports alcohol to Kazakhstan. This year, Vini Sliven has kept its strong positions on the Russian and the Scandinavian markets, the results from the company's annual report show.
Vini Sliven has already launched the production of the unique Slivenska Shevka, traditional for the region of Sliven town. The white wine lovers will be pleasantly surprised for Christmas. "The next week we'll announce the promotion of our new white wines," Mr. Chulin said. He also said that in 2008 Vini Sliven would release on the market a selection of exquisite red wine, but its name was kept secret for the moment.
Soft drinks market to grow by 16% this year
The chairman of the soft drink producers’ association Milcho Boshev estimated that the line market would grow by 16% this year against sales hike of 13% last year.Consumption is expected to reach 1.6bn litres by the end of the year. Exports are also growing due to improved access to more countries and an increased number of exporters. Romania , Hungary , Poland , Belgium , Netherlands , Greece , Cyprus , and Malta are some of the main export markets.
Price of bread reached up about 35-40% of the bread price in the EU
Price of bread before Bulgarian accession to the EU was about 20% of the cost of bread in the EU. Now I suppose that we reach up about 35-40% of bread price in the EU, chairperson of brunch chamber of bakers in Bulgaria Boris Inchev told Focus News Agency. He explained that the first year of our EU membership was very profitable for bread producers, Inchev said.
Bulgaria lacks unified food control
More than 40% of the foods in the European Union are contaminated with pesticides. In the European countries, however, there is strong public pressure for constantly reducing the quantities of such foods. That happens with the support and participation of the health ministries. Many store chains have special programmes that guarantee lower pesticide levels and even absolutely clean foods to their clients. But where do the foods that are not good enough for the demanding European consumer go? Given the modern globalised market, the destination may well be Bulgaria.Although a member of the EU, Bulgaria does not have a unified national monitoring system for pesticide residues in foods. The control is exerted by the ministry of health and the ministry of agriculture and food supply. The health ministry's State Health Control Department monitors the quality of all foods of non-animal origin. The agriculture ministry's State Veterinary and Sanitary Control Directorate is in charge of meat and meat products. Both ministries exercise control on plants and measure the pesticide residues before the products are marketed. The fact that the controlling functions of the state are divided among three separate bodies is a precondition for transferring of responsibility. The Food Act was revised several times, the last time in 2005, to ensure that the products Bulgaria imports and exports meet the modern requirements. Our main problem and weakness is that there is no unified control on food quality, Evdokia Maneva, member of the parliamentary agriculture committee, said. The public is given no information about the results of the inspections the controlling bodies carry out.
Industrial sales in Bulgaria up 10.9%
Industrial sales in Bulgaria increased with 4,5% in October on a monthly basis from a revised rise of 1,9% in September, Reuters cites statistics office data.Industrial sales increased by 10,9% on an annual basis from a revised rise of 8,2% year-on-year in September.Mining industry sales is up with 12,2% on the month. Sales in the processing industry increased by 4,7% and sales and distribution of electricity, gas and water rose by 0,6%.
Exports increase by 9%, imports, by 18% Jan-Sep
Bulgaria's trade turnover for the first nine months of 2007 amounted to BGN 49 billion, up by 14.3% year on year, data of the National Statistical Institute show. Exports jumped by 9% but imports increased twofold: by 17.8%. The foreign trade deficit for January-September amounted to BGN 9.9 billion (FOB prices).Bulgarian exports were destined predominantly for Turkey, Italy, Germany, Greece and Belgium. Bulgaria's main import partners were Russia, Germany and Italy, which accounted for a third of the total import volume. The trade balance with the European Union showed a BGN 5.9 billion gap for Bulgaria.
Bulgaria's foreign trade deficit stands at 5.8 billion EUR in 3rd Quarter
Bulgaria's foreign trade deficit reaches 11.4 billion BGN (5.8 billion EUR) at the end of the third quarter, with EU countries accounting for more than half of the total trade volume, IHT reported citing National Statistical Institute data. Bulgarian exports in the first 9 months stood at 19 billion BGN (9.7 billion EUR), 9% up compared to the same period in 2006. Imports were increased by 17.8% reaching 30.4 billion BGN (15.5 billion EUR), the data shows.Main export destinations were Italy, Germany, Greece and Belgium, while imports came mainly from Russia, Germany and Italy.
Bulgaria runs trade deficit of BGN 9,900 M in January-September 2007
Bulgaria's trade deficit in January-September 2007 stood at 9,900 million leva at FOB prices, while the trade deficit at export FOB-import CIF prices added up to 11,400 million leva, according to preliminary data released by the National Statistical Institute (NSI) on Tuesday.Imports at CIF prices totalled 30,400 million leva, a 17.8 per cent increase year-on-year. Exports stood at 19,000 million leva, a 9 per cent increase year-on-year. NSI reports a 14.3 per cent growth in exports totalling 49,000 million leva in January-September 2007 compared to the same period in 2006, and an 18.5 per cent increase in imports (CIF). Bulgaria's main partners in trade are Turkey, Italy, Russia, Greece and Belgium, followed by significant partners like France, Romania, Serbia, Spain and the United States. More than 66 per cent of the Bulgarian goods were exported to these countries.Russia, Germany and Italy are Bulgaria's main partners in imports, the value of goods imported from them accounting for more than one-third of this country's total imports.
Net FDI inflows fully cover CA gap in Jan-Oct
Net FDI inflows increased by 6.67% y/y to EUR 550mn in October and 31.5% y/y to EUR 4.52bn in Jan-Oct, according to preliminary data of the central bank. Net FDI accounted for 16.1% of the projected GDP and covered the whole CA deficit over the same period. The annualised FDI inflows for the 12 months ending in October worsened by 1.5pps in a month to 90.9% of the CA outflow. The overall balance was positive at EUR 3bn in Jan-Oct. Foreign reserves accounted for 6 months of imports or by 0.9pps higher as compared to one year ago.
Bulgaria tops world house price growth
According to the latest Knight Frank Global Price Index, residential property markets around the world have been slowing thanks to rising interest rates and tighter lending criteria.As a consequence, price growth for Q3 2007 slipped back to 8.2 per cent compared to 9.6 per cent in the same period a year earlier.Latvia, the long-running top performer, was knocked off the top spot by the massive 30.6 per cent annual growth in Bulgaria. This is in spite of concerns about oversupply in tourist heavy areas of the country, such as the ski resort Bansko.Latvia, indeed, tumbled to twelfth spot with annual growth in Riga of just 10.2 per cent for the third quarter.Knight Frank attributes much of this to unsustainable levels of previous growth, though they also point the finger of blame at rising interest rates, falling consumer confidence and legislative changes in Latvia. The slowdown was also evident in other Baltic countries, as Tallinn in Estonia suffered a significant drop in price growth from 16 per cent in Q3 2006 to 5.2 per cent in Q3 2007.Although rental demand is strong and rental values are on the rise, Knight Frank speculates that price growth is slipping as locals become priced out of the market by overseas investors.Western Europe has also experienced a substantial slowdown, not least Ireland, where prices outside of Dublin have been falling especially fast. Following its massive growth over the last five years, inflation has finally turned negative, at -0.9 per cent for Q3 2007.Spain has also witnessed a correction in its house prices in the wake of massive growth, with inflation now at a more sustainable 5.3 per cent.Scandinavian markets are looking much more robust, particularly Iceland, which is currently experiencing massive inflation despite interest rates of 13.75 per cent.Annual growth of 14 per cent has propelled the new entry to number four in Knight Frank's rankings. Markets in Asia Pacific continue to do well, with price growth increasing steadily in Singapore over the last two years, giving it an annual rate of 27.6 per cent.While growth in New Zealand has slowed from the previous quarter and sales volumes have fallen, prices were still up by 11.8 per cent, which was an improvement on 12 months earlier when the rate of growth was 8.6 per cent.Australia was also performing well, thanks to high growth in Brisbane, Melbourne and Adelaide which contributed to annual inflation of 10.3 per cent.And Hong Kong continued its resurgence with price inflation of ten per cent.Elsewhere South Africa has benefited from soaring demand in coastal locations, which has fuelled its 14.4 per cent price growth for the third quarter. Subsequently it has rocketed up the ranks on Knight Frank's index from number 21 a year ago to its current third position. And despite falls across numerous parts of the United States such as Michigan (-3.7 per cent) and California (-3.6 per cent) overall the country recorded a 1.8 per cent riseThe market in Canada remained remarkably detached from its stateside neighbour thanks to demand for commodities from Asia. As a result, inflation rose to 11.7 per cent over the third quarter.
Nearly half of Bulgarians in big cities have taken a consumer credit
Nearly 50% of residents in Bulgaria's big cities have used a consumer credit, and one third are considering applying for such, a survey, requested by Raiffeissen and conducted by Pragmatika revealed. 49.7% of respondents said that the difficulty of the application process is the leading factor for them when choosing a bank to apply with. The reason most Bulgarians borrow money is to repair or purchase a vehicle.Demand for consumer credits is surging and this tendency is likely to persist, says Raiffeissen. The survey was conducted in November 2007, among people aged between 18 and 60, and living in cities with population of more than 25,000 people. Consumer credits are the second most popular bank product (number one being debit cards). Moreover, the survey shows that 55.7% of people who used crediting once, are considering applying for a second loan.
Mortgage credits are less common – this product is preferred by people, who need a large amount of cash to make a big purchase like buying property (47.8%), business development (22.9%), or construction (22.9%). 49.5% of those who took a mortgage credit use it to make improvements in their homes and 41.8% to furnish their homes.
41.2% of clients who took consumer credits used it to buy a vehicle. Property purchases, business development, and construction initiatives are cited as a reason by less people – 36%, 22.3%, and 17.7%, respectively. Just 6.5% of Bulgarians said they took a credit to fund a trip. 85% of respondents said interest rates, annual fees, and service charges are the most important factor when choosing a bank. Nearly 50% said the difficulty of the procedure, requirements, and the time it takes were most important to them.
Bulgarians are Europeans, but not exactly
One out of three Bulgarians doesn't considers himself as a European, shows a research carried out by ‘ASSA-M' agency, the Standart daily informs. Round 68% of the Bulgarians believe that the EU entering could only bring benefit to Bulgaria.One year after Bulgarians joined the Union only 28% would qualify themselves as European citizens. Two years ago their number was 17%.Half of the Bulgarians think that in 10 years Bulgaria will benefit from its EU membership. The pessimists are less - only 12% say that it will sooner lose, the daily informs.Most of the local citizens are positively disposed about the country's future but are worried about their personal future. 47% of the Bulgarians say they feel insecure. The economy situation in Bulgaria is estimated as good only by 2% of the people. 34% think that the state has serious economic problems.For 37% of the Bulgarians the situation is more determined as crisis, and for 18% is a catastrophe.Even though more than 55% of the Bulgarians are optimistic that the country reforms have taken the right course. The Standart also shares that according to the poll 10% of the people can afford a vacation abroad.Every 4th Bulgarian is planning to go abroad to make a living.
Low incomes main problem for Bulgarians
One in three Bulgarians (29%) think that low incomes are the main problem in this country, a national representative survey conducted by MBMD among 1,225 people in late November shows.The poor government of the country is the second most serious problem, as pointed out by a fifth of the respondents. Unemployment is the third poignant problem. It is a serious issue for 14% of the interviewed. High prices and inflation are defined as a problem by the same share of people. only 10% said corruption is a problem, 4% think crime is the main issue.
Employers and employees in Bulgaria agree on salary raise
Bulgaria’s companies would have to increase their productivity, improve production and freeze salaries of those employees, who receive higher monthly wages or to take part of the profit to compensate employees, who would lose money from the introduction of the flat rate tax.Bulgarian Industrial Capital Association head Vassil Velev made the announcement after employers and employees’ unions signed and agreement on the compensations, Dnevnik daily reported. Employers union representative Teodor Dechev said that the compensation was not considered as such in the agreement, as the employer was not obliged to compensate the employee for loses caused by third parties. The agreement was a voluntarily gesture to protect damages from the introduction of the flat tax, he said.According to union of employees, 1.3 million people would suffer financial loses because of the flat tax. Employers claim that this was true for about 400 000 employees.With the agreement, the employers’ organisations called on their members to raise salaries of all their employees receiving up to 490 leva monthly in wages and to include the raise in collective labour agreements as of January 1 2008.
More than � 2B to flow into Bulgaria’s economy for transport development
The operative program ‘Transport’ was presented officially after it was signed on November 27th in Brussels. This program has the biggest budget of the seven operative programs Bulgaria has, and which will be financed by the Structure and Cohesion Funds of the EU. Its budget totals EUR 2 003 481 163.68.The operative program will focus on several strategic priorities, to assist the integration of the transport network in Bulgaria in the EU. The program also aims at balancing between the separate types of transport here.
Car crashes in Bulgaria cause damages of � 500 M annually
Car crashes cause damages worth EUR 500 M every year in Bulgaria, or close to 2% of gross domestic product, the World Bank said on Monday.The bank's report shows that more than 1,000 people die on Bulgarian roads every year, with ten times as many injured.Most of the 80,000 car crashes happen in inhabited areas because of deficient traffic control, but most of the injuries and casualties are outside those areas.Speeding, drunk driving and inexperienced drivers are the biggest causes of traffic accidents in Bulgaria.The economic damages are enormous for a country of Bulgaria's size, but they could double if nothing is done to improve the situation, World Bank country manager for Bulgaria Florian Fichtl said.The government needs to do more, starting from better coordination and monitoring, but also improving its roads, making road police and emergency first aid services more efficient, Jesper Mertner from consulting firm COWI said.
Two cigarette factories facing closure
The cigarette factories in Plovdiv and Stara Zagora may be shut down due to the excise duty jump from 2008, the chairman of Podkrepa's trade union section in the enterprise in Stara Zagora, Radoslav Bonev, told the Pari daily.Increasing the tax by EUR 11 will halt production in the factories, because the lower-class cigarettes that they manufacture will become unsalable. The trade unions support an increase in the excise by EUR 9.6 but the finance ministry insists on a higher rate, Bonev said. The parliamentary budget committee decided that the duty should rise to BGN 37 per 1,000 cigarettes plus 35% of the retail price. That will affect mainly the cheap cigarettes.
Sofia loses three billion levs in case of an earthquake
Sofia's losses in case of an earthquake of a higher magnitude will amount to an average of 2.5 billion- 3 billion US dollars, data of the World Bank (WB) show. The information was announced by Evgeni Gurenko during the National Round Table for Management of Catastrophic Risks.Sofia should put aside some 30 million US dollars a year to be ready to cope with such a cataclysm. They should be deposited in a special pre-event reserve fund which to be used in case of a calamity to restore the city's normal life as quick as possible, the bank's assessments show.According to the WB, the governments from the Balkan region have no more than 1% to 2% of readiness to cope with possible disaster damages.
Bulgaria on a Christmas shopping spree
An excursion to the malls is the Bulgarians' latest craze. Thousands attack Sofia and Varna hypermarkets on weekend to buy gifts for the coming winter holidays. Smart transport companies started business with shopping-crazed crowds from Stara Zagora, Pleven, Lovech and Vidin offering tickets at half the usual price for a shopping tour in Sofia. Four buses with shopping tourists from Vidin besieged Sky City on Saturday morning. There are forty of us in the bus, we hired it for 250 levs, said passengers. The mall at Stambuliiski Boulevard in Sofia was packed with people from Lovech and Stara Zagora who had arrived in five vans. They were looking for another one, though, for their way back as they had no room for the buys.
Wages raised by 17.6%
Wages in Bulgaria have increased by an average of 17.6% in the last three months of 2007 compared with the same period of the previous year. This is a bit more than the inflation for the year that is 12.6%, according to Eurostat data, quoted by Econ.bg. In the EU Bulgaria ranks fifth in pay rise this year. The leader is Latvia where wages grew by 30% and Germany bottoms the list with a rise of 0.9%.
Red business is not myth: former Deputy Prime Minister
Red business was not a myth and was connected with the transforming of big sums in and out of the state, former Deputy Prime Minister Dimitar Ludzev said for BTV. In Bulgarian Socialist Party in the moment certain people dominated who were coming from the apparatus but they made success in the party thanks to the company circles around the party. People like Iliya Pavlov and Emil Kyulev received a lot of power to finance the parties but the reason for the death of these people were unsettled deals in the underworld, Ludzev said. Even after 18 years in Bulgaria there was still mutual dependency between politics and business because the politicians were still taking decisions to the interest of the business, they could promote their friendly circles or destroy competition, Ludzev added.
Bulgaria's political parties and judiciary still seen as most corrupt
The political parties and the judicial are seen as the most corrupt in the Bulgarian society, according to the latest World Corruption Barometer of Transparency International presented by the Bulgarian chapter of this organization on Monday, BTA reports. There have been no significant changes from last year in people's perception about which are the most corrupt institutions and sectors, commented Transparency International Bulgaria director Diana Kovacheva. The next most corrupt in Bulgarians' eye are Parliament, the health care system and police. Nearly two-thirds of respondents assess as inefficient the government's anti-corruption efforts. It means that people do not feel the effect of the anti-corruption measures, Kovacheva commented. Seven per cent of Bulgarians have paid a bribe in the past year. The average bribe was 71 euro. The bribe is highest in the judiciary, 160 euro. The survey found that people most frequently bribe the police. The expectations of people in the EU member states is that corruption will be increasing in the coming three years. In Bulgaria, people expect the level of corruption to remain unchanged. For this reason Bulgaria emerges as one of the most optimistic countries in the report, said Kovacheva.
Bulgarian criminality invested �100 M in past local election
Round 200 million BGN (100 million EUR) were invested in votes' buying on the last local elections in Bulgaria, says data of the Centre for Study of Democracy. The results were presented on a conference dedicated to the organized criminality in Bulgaria.The Ambassador of Germany to Bulgaria Mihael Geier commented that in the last elections in the country, mafia forces went down to municipalities.According to the Center's research most profitable sector in the organized criminality in Bulgaria is the trade with girls, where the criminals gain 1 billion EUR per year.The profits from drug traffic goes about 200 million EUR annually. Considering the car thefts the gains are round 50 million BGN (25 million EUR), Darik informed.According to the Center's report Bulgarian and Russian organized criminality have a lot in common.
Bulgaria absorbs only 10% of EU funds
During this year Bulgaria will absorb hardly 10-15 % of the previewed round 1 billion EUR from the EU funds in form of presented projects by all operative programs. 12 billion EUR is the common amount of resources of EU funds on all operative programs, which Bulgaria will receive to 2013.When planned out, that means Bulgaria has to prepare nearly 7,000 projects. Business can rely mainly on financing for projects in operative programs- ‘Regional development', ‘Human resources' and ‘Administrative capacity'.Main problem for business is expected to be co-financing. According to Industrial Chamber, leader in attracting additional resources is Ireland, where on every Euro of structural funds are attracted additional 3.7 EUR; in Spain proportion is 1 to 1.7 EUR. Greece is forced to consume more resources from the structural funds than the attracted investments, shows chamber's data. In connection with this matter today occurred a meeting of branch organizations on theme ‘Creating of expert potential of projects on EU structural funds in help of branches organizations .'
Bulgaria to establish national committee of the World Petroleum Council
Bulgaria's Vice Minister of Economy and Energy Valentin Ivanov took part in the constituent meeting for set up Bulgarian National Committee of the World Petroleum Council (WPC). The idea of the Committee's establishment seeks Bulgaria could become one of the big, powerful, authority and professional societies in the petroleum industry.Being part of WPC will allow to Bulgaria the use of possibilities for direct initiative in problems solving.It will also guarantee direct access to the newest in the technology and the developing of managing programs and informational programs through constant exchange of info among the WPC's members.The World Petroleum Council was founded in London in 1933. It provides a forum for discussing the issues facing the oil industry on a worldwide basis and is strictly non-political.The WPC is dedicated to the application of scientific advances in the oil and gas industries, to technology transfer and to the use of the world's petroleum resources for the benefit of mankind. The WPC's 61 member countries represent over 90% of the worlds major oil and gas producing and consuming nations of the world.Each country has a national committee made up from representatives of the oil and gas industry, academia and research institutions and government departments.Co-establishers of Bulgarian National Committee will be representatives of Balkan and Black Sea Petroleum Association (BBS Petroleum), Bulgargaz Holding, University of Mining and Geology, ОМВ, Overgaz, Lukoil, Direct petroleum and others.
INVESTMENTS:
USA invests $ 200 M in municipalities with Military bases
Round $ 200 million will be invested in Bulgarian municipalities with military bases, was announced on a social discussion by US representatives.Through the NATO line $50 million will be invested, and another $150 million will come under the guise of contracts for road repairing, communications, water and electricity supply installation.American soldiers' presence in Sliven and Yambol areas will lead to new work places opening, in the firms which will provide goods and services for the American army's needs, was commented on the discussion.American guests explained to the attending people, the common military bases are and will remain Bulgarian military objects, under Bulgarian flag and Bulgarian commanding.
Three solar parks to be built in Bulgaria
Three solar parks will be built in Haskovo area (Southern Bulgaria). The facilities for production of electricity out of solar energy will be constructed in 3 villages in the Haskovo area.Experts estimate that for the realization of these projects is not necessary to be estimated their influence over environment. By building these parks no disturbance of the natural habitats is expected.For the last 5 months Regional Eco- inspection had litigated 53 approvals of investment intentions for re-estimation of their influence over environment.
Maritsa Iztok Mines to invest BGN 91M-plus in 2008
More than BGN 91 million will be invested in Maritsa Iztok Mines' three open pits next year. Nearly BGN 15 million of the amount will be attracted from external sources, the remainder will be our own investment, the mining company's executive director, Ivan Markov, told the Pari daily. The BGN 8 million profit expected for 2007 will also be re-invested. The investment plans are in line with the pending increase in coal output from 23.1 million t in 2007 to 27.7 million in 2010, Markov went on to say. That will also help provide the necessary coal to the future thermal power plant near the town of Galabovo, where AES of the USA will invest more than USD 1.3 billion. A working group will present the criteria and requirements to potential investors in a fourth thermal power plant at Maritsa Iztok on Monday. According to tentative assessments, the project will cost between EUR 850 million and EUR 900 million. The future contractor will have to observe the stringent European requirements for reduced hazardous gas emissions. Potential investors include Enel, AES, CEZ, RWE and E.ON.
Bulgaria industry: APRI Sviluppo to invest in alternative energy projects
Private equity investors APRI Sviluppo (Italy) has announced plans to invest �100M in ten alternative energy projects in central and eastern Europe. The investors explained that Bulgaria is the main target of the investment fund, which has been set up to provide financing to companies at the early stages of alternative energy projects, primarily in the areas of solar and wind power generation.In November, alternative energy concern Alpha Grissin Infotech (Greece) and financial major Deutsche Bank (Germany) announced plans to set up a joint venture for the construction of solar and wind-power parks in Bulgaria and Greece. Deutsche Bank will hold an 80% stake in the venture. Total investments for projects in both countries have been estimated at �190m, with total energy production capability expected to reach 172 mw.In August local alternative energy group Balkan Energy unveiled plans to invest as much as �300m to build a large-scale wind farm with generating capacity of 200 mw in Bulgaria.
Germans to build modern hospital near Pernik
The German foundation "Asklepius cliniques", which is the second large hospital chain in Germany, is planning to build a modern hospital in the small Bulgarian village Rudartsi near Pernik, reported sandanski1.com. The foreign investors are thinking to build a modern hospital building according to the world standards. They will improve the infrastructure of the region, build sport devices, recreation areds, change the lights on the streets and build up a parking lot.According to the plans of the foundation a chapel in the yard of the hospital will be built too.The german company is expecting to get into a close relationship both with the Ministry of Health and the citizens of Rudartsi. The company said that in accordance with the regulations buildings for medical care they are planning to build a sewerage station.
Salu-D investing in Pchelin area spa hotel
Construction company Salu-D said it is building a spa complex in the area of the mineral springs near the village of Pchelin, in the Sofia region. The 4,000 sq m complex wil feature a hotel component and two apartment buildings. The investor will first complete the spa hotel before starting work on the residential buildings which will have 16 apartments in total. The location is close to the towns of Kostenets and Dolna Bania and ski resort Borovets.
Greek furniture chain comes to Bulgaria
Greek furniture- shop chain SATO plans to enter Bulgarian market and the whole Balkans during the next 2 years. First country toward which the company directs is Romania, next come Slovenia and Bulgaria. Invest program of the company previews to put in 24 Million EUR, which equals 12 brand shops ENTOS opened to the end of 2008.The last new hyper market, which is 7thand the biggest of the chain ENTOS, was opened in Solun. It is positioned over 5,400 square meters surface and located just next to IKEA.SATO expects to increase its part on home furniture market to 25% through next 3 years. For 2007 prognoses are sells of nearly 100 million EUR.
Russians buy up Bulgarian winter resorts
"The Russians are the biggest investors in the Bulgaria's ski resorts," commented Nikolai Pehlivanov, executive director of the real estate company Green Life Property Development (GLPD), at the presentations of Paradiso Verde Ski & Golf Residence, located in the Gramadeto area near the Pirin Mountains. However, this time the interest of the Russian property-buyers lies in making an investment than simply buying a property in Bulgaria on an emotional level, as it is the case with Bulgaria's Black Sea resorts. At the same time, the number of English speaking property-owners in Bulgaria went down by nearly 70 percent. The main reason for this are the critical publications about the Bulgarian property market that appeared in the foreign press and the continuing mortgage crisis in Europe and the USA. "Just a year ago, nearly 50 percent of the deals were made even without the presence of the buyers. Lately, such kind of deals make only 20 percent of the total property deals," added Pehlivanov further. While in 2006, nearly 40 percent of the foreigners were buying properties in the newly-built residential villages with the idea of making an investment, now this kind of deals is 80 percent of all real estate deals. This year, real estate prices went up by 10 percent. Green Life's property specialists believe that the current trend will continue in 2008, too.
Holiday village to be built near Byala
Madara Bulgarian Property Fund will start construction works on the largest holiday village along the Bulgarian Black Sea coast in 2008. The project, dubbed Black Sea Gardens, envisages the setting up of more than 5,000 residential properties, as well as entertainment facilities such as a yacht port, a spa centre and tennis courts. Madara is listed on the Alternative Investment Market (AIM) of the London Stock Exchange. Sofia-based BBT Projects is a co-investor in the project. Black Sea Gardens will be built along the coastal strip near Byala. A total of 80% of the residential properties will overlook the sea. Madara was established in 2006 and was listed on the AIM in June 2007. The fund owns or is in the process of acquiring land estimated at EUR 35.7 million. The plots are located along the Black Sea coast and in the mountain resort of Borovets.
Sviloza to invest � 300 M in new assets
Sviloza, the Svishtov-based cellulose and synthetic fibres plant, said it plans to invest some 300 mln euro in territorial and capacity expansion over the near term. Some 230-250 mln euro will be spent to build a new factory for packaging paper on the site of the Sviloza plant in Svishtov. The new factory will have an annual capacity of 500,000 tons. It should be operational by the end of 2009. Another 30 mln to 60 mln euro will be allocated for the acquisition of production assets in Serbia, Romania, Moldova and Russia. The investment projects should boost output and sales in response to rising demand for cellulose and paper products across South-eastern Europe. The financing will be provided by banks but the management does not rule out the setting up of business partnerships and future capital hikes. Talks are underway to borrow money from the EBRD which has funded previous Sviloza projects. Earlier this year, Sviloza completed a project for the modernisation and installation of new production facilities worth 55 mln euro. Their launch will triple the company's annual output to 150,000 tons over the next three years. The current estimates of the management are for a loss or a fractional profit in 2007 as a result of the shutdown that was needed for the launch of the new installations.
COMPANIES:
Mercedes Benz steps in Veliko Turnovo
The automobile giant ‘Mercedes' leads talks to step in Bulgaria's city of Veliko turnovo (Central Bulgaria). The company said is ready to invest round 10 million EUR in showroom and service, money.bg reported. Veliko Turnovo's mayor Rumen Rashev stated representatives of ‘Balkan Star' (official importer of Mercedes to Bulgaria) had personally negotiated with him.The mayor informed that had directed the Mercedes officials to private properties' owners, because the municipality can offer such big free space for the company's purpose.Mercedes will be the 11th car company to invest in a store and service in Veliko Turnovo.Round 1,183 new Mercedes cars were sold in Bulgaria for the period January-October 2007. In 2006 were sold 983 cars. The negotiations with Mercedes has been leading from 5 years.
Bulgargaz buys stake in Romanian peer Transgaz
Bulgargaz Holding, the Bulgarian state-controlled gas distributor, said it has acquired less than 1% of the 10% share stake floated on its domestic bourse by Romanian gas company Transgaz.Bulgargaz division Bulgartransgaz and Transgaz are involved in the Nabucco project for the delivery of Caspian gas to Central and Eastern Europe and are potential participants in an initiative spearheaded by Hungary's MOL for the creation of a regional gas holding consolidating the business of operators from six countries.Bulgargaz Holding executive director Lyubomir Denchev said the company paid 1.1 mln levs to acquire 9,000 of the 1.17 mln shares offered by Transgaz. The deal marks the first overseas acquisition for Bulgargaz which is aiming for a market cap of 4-6 bln euro, said Denchev. The target will be hit through the listing of 20-30% of the gas distributor on the Bulgarian and London exchanges over the next couple of years. Bulgargaz also becomes that first state-controlled enterprise to be involved in such a transaction. The management of the company did not disclose the business rationale for the move. The listing plans have to do with the need for fresh cash for major investment projects. Deputy energy minister Galina Tosheva said a couple of days ago that Bulgaria will consolidate the state-owned power stations, mining companies, national power grid operator NEK and Bulgargaz Holding into an energy holding. Unless the new holding is set up promptly and lists in 2009, it may miss its opportunities to tap the financial markets. Bulgargaz is in talks with private corporations to jointly set up an engineering outfit for exploration, prospecting, construction and capital repairs. The state-owned company will seek a 51% share of the partnership. In related news, it was announced that Bulgargaz is proposing to the power regulator to approve a 25.4% gas hike from January 1, 2008. That would mean a price of 416.89 levs per 1,000 cu m. The gas company was initially eyeing an increase of 33.5%. The new proposal is based on a dollar/lev exchange rate of 1/1.32 instead of the forecast for a 1/1.43 rate. The Bulgargaz proposal is significantly higher than the increase advocated by the economy ministry which calculated 16%. Sources from the power regulator said it will do everything possible to bring down the hike to 9-10%.
Trace Group to set up subsidiary in Kardjali
Stara Zagora-based construction company Trace Group Hold will set up a new joint stock company in Kardjali. Trace Group will hold 90-percent stake in the new company. The remaining 10% of the capital will be owned by Galini-N OOD. The new company will specialise in infrastructure construction and repairs. It will issue a total of 50,000 shares with BGN 1 par value each. Trace Group forecasts nearly BGN 125 million operating revenue for 2007. The company also expects to book BGN 8.1 million profit after tax for the period.
Toplofikatsia Sofia to book BGN 22M loss in 2007
Sofia's heating utility Toplofikatsia will book BGN 22 million loss for 2007, Petko Milevski, executive director of the company, said. Toplofikatsia had an investment programme, which envisaged BGN 28 million loss for 2007. The loss, however, will be smaller due to the fact that some thermal power plants have switched to producing heating from natural gas, rather than from black oil. Thus, between BGN 6 million and BGN 7 million will be saved. Toplofikatsia's receivables in the period 1999-2007 amount to BGN 169 million, Liliya Mautner, chairwoman of the board of directors of the company, said. Municipal companies and state institutions account for BGN 1.7 million of the figure. It is still unclear as to what the price of the heating will be in 2008. The price will go up by 5-8% due to the increase in the price of natural gas by Bulgargaz. Top executives of heating utilities, however, have met secretly with the State Energy and Water Regulation Commission. Representatives of the energy watchdog have made it clear that they will not allow an increase in heating prices.
Only KG Meritime Shipping allowed to next stage of the competition for the privatization of 70% of Navigation Maritime Bulgare
Only the consortium KG Meritime Shipping was allowed to the next stage of the privatization of 70% of Navigation Maritime Bulgare company, Todor Nikolov, executive director of the Privatization Agency in Bulgaria announced during a press conference, a reporter of Focus News Agency informed. one of the two other contestants, that were not allowed to the next stage - Chartworld Shipping Corporation did not meet the criteria due to its subject of activity. The other company, which was not allowed, is Essar Shipping&Logistics Limited. It has an activity in logistics and applied for the competition through a branch company. It is registered in 2006, which is in contrast with another of the criteria.
Bulgaria government to buy more Microsoft licences
Local company CAD R&D Center Progress will supply 60,000 Microsoft PC OS licences at a cost of 68.76 mln levs to the Bulgarian state administration, it emerged Tue after the price parameters of the two candidate resellers were unsealed. Progress will also procure 2,000 server licences at cost of 2.674 mln levs. All prices without taxes. Competing tie-in Stak came up with an offer that was roughly 7 mln levs more expensive. The 4-year framework agreement for the supply of the Microsoft licences should run from Jun 1, '08.
Bulgarian retail group K&K Electronics to open outlet mall in Sofia
K&K Electronics, Bulgaria's largest electronics retail group, said it will kick off next week the construction of an outlet mall on Sofia's east-bound Tsarigradsko Shose boulevard. Sofia Outlet Center will offer a built-up area of 28,000 sq m, including 17,000 sq m of lettable floor area, when it opens for business in 2009. The complex will have one underground and three above-ground floors.Space has already been prelet to apparel makers like Kenvelo, Adidas, Tom Tailor, Geox, Reply and Levi's.The project is advised by Germany's ECE Projektmanagement. Britain's GVA Grimley LLP Outlet Services will be in charge of the operative management. Sofia Outlet Center said the necessary funding will be disbursed by Raiffeisenbank (Bulgaria) EAD. Market watchers have tipped the local outlet mall segment for a solid growth over the next couple of years.The Corecom Princess company, owned by Turkish businessman Sudi Ozgan, opened a couple of weeks ago the Princess Outlet Center in Sofia's Mladost residential district. K&K operates Bulgaria's leading retail chain Technomarket with some 20 large format retail outlets across Bulgaria and is an overall leader in the electronics retail sector with a market share in excess of 40%.
Footwear retailer Salamander eyes Bulgaria
German footwear retailer Salamander will seek to widen its market leadership in the trade in high-quality shoes and leather products, Salamander Austria CEO Martin Gartner was quoted as saying by news agency APA. Therefore, the company is searching for central locations for its shops in larger cities in Austria and central and eastern Europe (CEE). Business plans for Croatia, Romania and Bulgaria have already been laid out. Since April 2005 Salamander belongs to German-Chinese watch-and-jewellery group EganaGoldpfeil, an official licence partner of Joop, Esprit, Junghans, Puma and Cerruti 1881.
ANALYSIS:
European Commission makes recommendations to Bulgaria about Lisbon strategy implementation
Publication: BTA Bulgarian Economic Outlook
The European Commission made recommendations to Bulgaria regarding the implementation of the Lisbon Strategy for Growth and Jobs on Tuesday. They are contained in the 2007 Strategic Report Country Assessment of the National Reform Programmes, made public by European Commission President Jose Manuel Barroso and
Vice President Guenter Verheugen at the regular session of the European Parliament.The report assesses the National Implementation Reports. Adopted by the Lisbon European Council in March 2000, the strategy was designed to gradually turn the EU into the world's most dynamic economic power. However, a slowdown in its implementation necessitated an update. The Strategic Report confirmed the central place of the renewed Lisbon strategy and called for it to be deepened during the next three-year cycle.
The Commission found that "in the face of greater uncertainty about the development of the world economy, the EU needs to continue to strengthen its own base and press ahead with the implementation of structural reforms". The Bulgarian National Reform Programme was submitted to the Commission in March. The Strategic Report says: "Overall, the National Reform Programme focuses on the right challenges, but in some areas lacks concrete and substantial measures, in particular as regards strengthening administrative capacity." The Commission found that "the National Reform Programme lacks measures aimed at urgently and significantly reducing red tape to make the business environment more dynamic and competitive. Given the growing economic imbalances, it is particularly important for Bulgaria to accelerate the implementation of its National Reform Programme in order to create the necessary conditions for sustainable growth and jobs in the medium to longer term".
The Commission identified policy areas in the Bulgarian National Reform Programme where challenges need to be tackled with the highest priority. Bulgaria is recommended to:
- Urgently strengthen administrative capacity, in particular focus on key government functions, including regulatory authorities, and the judiciary
- Contain the growing current account deficit and inflationary pressures, in particular by a tight fiscal policy, improving the quality of public expenditure and promoting wage moderation in order to keep wage developments in line with productivity gains
- Take rapid measures substantially to cut red tape and shorten procedural delays in order to improve the business environment (in particular for SMEs and facilitating start-ups), which will also help in the fight against corruption
- Increase the quality of labour supply and the employment rate by improving the efficiency and effectiveness of active labour market policies and further reform the education system to raise skills to levels that better match labour market needs and reduce early school leaving
The Commission also concluded that over the period of the
National Reform Programme, it is important for Bulgaria to focus on:
- Taking further measures to ensure the long-term sustainability of public finances, in particular with regard to potential risks in terms of adequacy and sustainability of pensions
- Creating all necessary preconditions for strong competition in network industries
- Elaborating an integrated policy for R&D and innovation notably aimed at reforming the public R&D system, shifting public support to R&D towards more competitive funding focused on key priorities
- Tackling undeclared work by strengthening institutional capacity to perform inspections and ensure legal enforcement
- Completing the lifelong learning strategy and increasing participation
Bulgaria is one of Europe's biggest prostitute exporters
Publication: Agence France Presse
Bulgaria is one of Europe's biggest exporters of prostitutes and has one of the largest and most developed networks of prostitutes in the continent, a new study said Wednesday. In the southern town of Sliven, which has a population of about 100,000 people, the Centre for the Study of Democracy (CSD) estimated that one out of every 15 women aged between 15 and 30 was engaged in prostitution."This is a social catastrophe," said CSD analyst Tihomir Bezlov.The non-governmental think tank found Bulgarian prostitutes working abroad earn the equivalent of about seven percent of gross domestic product (GDP), a similar proportion to countries such as Taiwan and South Korea."According to even the most conservative estimates, Bulgarian prostitutes working abroad earn between 0.9-1.8 billion euros (1.3-2.7 billion dollars) a year, the equivalent of 3.6-7.2 percent of GDP in 2006," Bezlov said.The study estimated there were 18,000-21,000 Bulgarian prostitutes working around Europe, mostly in France, Italy, Spain, Germany, Belgium, the Netherlands and Greece.Given its nature, it is difficult to compile reliable statistics about sex trafficking. But the scope of the problem can be gauged by the number of cases where victims of sexual exploitation contact the police for help.Police estimate that one out of every 10 prostitutes seek help, Bezlov said.In Germany, reputed to have one of the most developed sex services markets in Europe, 12.7 percent of sexual exploitation victims are of Bulgarian origin, compared with 1.2 percent who are Russian. In the Netherlands, the ratios stood at 14 percent and 10 percent respectively, Bezlov said.Taking a look at organised crime in general in Bulgaria, the CSD analyst said that the origin, structure and evolution of criminal networks was similar to in Russia. "Bulgaria's organised crime, which is based on violence, is resembling that of Russia and the other former Soviet countries," Bezlov said.Many of the perpetrators were former police officers, laid off after the fall of communism in 1989, jobless athletes such as wrestlers, and ex-prisoners, the study showed. During the first few years following the collapse of communism, the government was weak and the justice system inefficient, allowing protection rackets to spring up.Wealthy criminal bosses became involved in drug trafficking in the late 1990s and car theft became so widespread that one out of every three cars on Bulgarian roads in the mid-1990s was stolen. In 2006, another "Russian" phenomenon emerged in Bulgaria, with 60 percent of all stolen vehicles being offered back to their owners in return for ransom, Bezlov said.Bezlov said that Bulgaria's accession to the EU this year was likely to reduce crime. "Bulgaria's EU accession led to the gradual curbing of the most drastic forms of organised criminal activity," the study said."This is largely due to the increasing pressure on Bulgarian institutions from Brussels which in turn has resulted in the taking of more resolute action against organised crime."