BULGARIAN ECONOMIC TOP NEWS DIGEST
WEEKLY REPORT ( 31 OCTOBER – 7 NOVEMBER 2008 )
Sections/headline briefs:
MACROECONOMY:
· Bulgaria and Vietnam set to boost ties
· Forecasts for 5% inflation in 2008
· Bulgarian winemaker swindles Brussels out of BGN 1.5 M
· Bulgaria holds two new mobile phone operator tenders by end of 2008
· Bulgaria's Varna-West port opens new container terminal
· EU to finance modernization of fishing ships
· Sofia wants �105 M from Europe for the subway
· Standard & Poor's lowers credit rating of two of Bulgaria's largest banks
· 17 Bulgarian banks with assets above BGN 1 billion
· Bulgaria to create energy exchange
· Bulgaria MP's reject reduction of minimum amount for business registration
· BNB Governor: Bulgarians will spend less next year
INVESTMENTS:
· Bulgaria - a future heaven for investors in renewable energy
· Solar energy - the new business
· Koreans are building a town with shops along the sea
· Capital Sofia attracts 80% of Bulgaria's foreign direct investments
· EC: Speed of the investment growth in Bulgaria to decrease
· General Electric interested in eco projects in Bulgaria
· Greek-owned Biocheck to invest �5 M in three medical centres in Bulgaria by end of 2011
· Bulgaria tops IBM 2008 report for foreign investments in service jobs
· Bulgarian builder Holding Roads to invest �30 M in Ukraine, Albania in 2009
COMPANIES:
· Bait Expo exhibition begins in Sofia
· Bulgarian Markam Fashion expands in Romania
· US trade chamber in Bulgaria discusses the elections
· Trade boom with the EU
· Bulgarian Elemag expands amid crisis
· Zarneni Hrani takes 60% of bio diesel market
· Bulgaria admits German RWE upset about Belene NPP
· BDZ to discharge employees because of "Kremikovtzi"
· Bulgarian branded textile products maker AlfaCommerce opens �6.2 M plant
GLOBAL FINANCIAL CRISIS ANALYSIS AND NEWS:
· EU expects external imbalances, high inflation in Bulgaria
· Clouds gathering over Bulgarian economy
· The financial crisis freezes mutual funds market in BG
· Trade at Sofia Stock Exchange shrinks by another 15%
· Media & economists should stop threatening people with the Great Depression
· Prof. Hanke: Global financial crisis shouldn't be a scarecrow
· Bulgaria tourism sector offers ideas to deal with global financial crisis
· Industrial plans put on the back burner as economy reels
· The financial crisis delays the privatization of hospitals
· Deutsche Bank urges real economy back-up against depression
· Business people demand concrete measures from state against global crisis impact
· Economy Minister proposes to SEE package of measures vs Global Financial Crisis at economic forum
Articles:
MACROECONOMY:
Bulgaria and Vietnam set to boost ties
An official Bulgarian delegation visiting Vietnam, led by Deputy Prime Minister and Foreign Minister Ivaylo Kalfin, was received by National Assembly Chairman Nguyen Phu Trong on Monday [ 3 November], the Bulgarian Foreign Ministry said in a press release.This is the first visit by a Bulgarian foreign minister to Vietnam in nearly 30 years.The two delegations praised the contacts and the cooperation between their countries' parliaments. They share the desire for relations to develop both at the high level and at the level of parliamentary friendship groups. In 2004, a group for friendship with Bulgaria was formed in the National Assembly of Vietnam, and in the 40th National Assembly of Bulgaria there is a group for friendship with Vietnam, headed by Vasil Kalinov.The sides also look forward to upcoming visits at the highest level: of the Bulgarian president to Vietnam in 2009 and the Vietnamese president to Bulgaria in 2010, which is the 60th anniversary of the establishment of bilateral diplomatic relations.Kalfin updated his host on the economic situation and the investment climate in Bulgaria. He stressed that Bulgaria's EU membership has opened new channels of dialogue and cooperation between Bulgaria and Vietnam, including in the framework of enhanced partnership between the EU and the Association of Southeast-Asian Nations (ASEAN) and in the Asia-Europe Meeting (ASEM).Kalfin said Bulgaria is ready to provide assistance to Vietnam for the building of institutions. He welcomed the programme for action and development of relations with the EU until 2010 and guidelines until 2015, approved by the Vietnamese Government, and expressed his confidence that the new Agreement on Partnership and Cooperation between the EU and Vietnam, which is being negotiated, will place Vietnam's relations with the EU on a new foundation.Among other concrete fields of enhanced cooperation, the sides pointed to education, tourism and two-way investment.Nguyen said it is necessary at the 21st session of the Joint Commission on Economic, Scientific and Technological Cooperation, which will be held in Hanoi on November 17-20, to map out the concrete fields and forms of cooperation in view of expanding bilateral commodity exchange and economic and investment cooperation, the Foreign Ministry said.Kalfin also conferred with Deputy Prime Minister and Foreign Minister Pham Gia Khiem, who had invited him to visit Vietnam.Kalfin gave a positive assessment for Vietnam's pragmatic foreign policy and for the country's constructive and stabilizing role in the region within ASEAN and ASEM and in other international organizations.The sides expressed their shared desire to develop their partnership in spheres of mutual interest. Pham said that nowadays there are about 10 deputy ministers in the Vietnamese Government who have studied in Bulgaria.The forthcoming session of the Joint Commission on Economic, Scientific and Technological Cooperation is expected to add impetus to bilateral relations.Vietnam is one of the fastest-growing economies in Asia, in second place in terms of economic growth after China: 8.5 per cent in 2007, 8.17 per cent in 2006, and 8.4 per cent in 2005.
Forecasts for 5% inflation in 2008
Despite the data about the good economic development of Bulgaria for the first half-year of 2008, the financial crisis will affect us, experts from the Centre for Economic Development said. In 2009 slowing down of economic development is expected and inflation will drop to 5%. Efforts should be taken to improve the business environment of the country as the only way to keep the attention of foreign investors.
Bulgarian winemaker swindles Brussels out of BGN 1.5 M
Stara Izba 1924 wine-producing company owner Orlin Avramov is the next in turn to be investigated by OLAF, the EU anti-fraud office, over a large-scale embezzlement suspicion, Bulgarian Agriculture Fund (BAF) sources told The Standart.Avramov applied for SAPARD funding, defending a project worth 3 million levs (1 euro = 1.95 levs). He allegedly planted 70 hectares of land with vines and took 1,5 million levs as a subsidy. Two years later, a mysterious conflagration burned the vines to ashes. And the OLAF experts grew suspicious. According to them, the blaze may have wiped out the evidence of a massive fraud. OLAF's experience points out that this could be a scheme in which instead of vines, the beneficiary plants vine twigs. The presumption is that Avramov used precisely that same old trick. Recently, Avramov gained popularity as one of the suspects for the murder of Nadezhda Georgieva, a lawyer from the town of Yambol.
Bulgaria holds two new mobile phone operator tenders by end of 2008
Bulgaria's Communications Regulation Commission has announced in the State Gazette it was going to hold two tenders for the country's fourth and fifth mobile phone operators by the end of 2008.The first tender has been scheduled for December 10 with a starting bid of BGN 57 M. The deposit for the bidders is BGN 2,5 M. The offered mobile phone license will be for ten years.The starting price at the tender for Bulgaria's fifth mobile phone operator will be BGN 38 M. The deposit for participation will be BGN 1,5 M. Earlier in 2008 the Communications Regulation Commission terminated the tender for a fourth mobile phone operator because of the lack of candidates. The tender was announced in June; the starting price was BGN 38, and the deposit for participants was BGN 1,9 M.
Bulgaria's Varna-West port opens new container terminal
The completion of the first stage of the new terminal at the Varna-West port was marked by an official inauguration ceremony in the presence of Bulgaria' Transport Minister Petar Mutafchiev and the German Ambassador to Sofia Michael Geier.The ceremony began at 10:30 am on Monday at the Varna-West Port. Other participants included local politicians, representatives of the maritime business and of the German company suppling the equipment for the new terminal, and clients of the port.The ceremony included the inauguration and putting in operation of the new 100-ton mobile crane, recently purchased from Germany and other port equipment.The new terminal has a platform for loading and unloading containers, entrance checkpoint for heavy trucks, a computerized system and center for managing the work flow.The total investment amount is estimated at BGN 11,300.With the new equipment the Varna-West port would be able to process the huge container traffic, which just in 2008 has increased by 60%.
EU to finance modernization of fishing ships
Owners of fishing ships in Bulgaria can receive up to 60% subsidy for modernization and equipment of their vessels, the Dnevnik Daily informs. This, however, will be possible if the state reduces its fishing fleet by 30%. The subsidy is to be given by virtue of Regulation 744/2008 of the European Union. In the end of the week, Antonio Gutierrez, expert from the Directorate General for Maritime Affairs and Fisheries will explain the rules of the Regulation to representatives of companies in the branch from Varna and Burgas. Greece and Romania have already taken advantage of this measure the European Commission offers. The Regulation is obligatory for all member countries of the European Union. Anyway, there will be no sanctions for Bulgaria if it does not fulfill the Regulation. The Chairman of the commission explained that this regulation would help the Operative Program Fisheries in Bulgaria. What is more, the EC is ready to allot EUR 600 million more. If Bulgaria decides to use the regulation, a management plan for the fishing fleet has to be prepared by the end of the year. The Regulation allows modernization of ships’ equipment and even purchase of new vessels.
Sofia wants �105 M from Europe for the subway
A delegation of Sofia municipality is in Luxembourg to negotiate a 105-million euro credit from the European investment bank.“The money is needed for the construction of the subway – the section from 'Mladost' district to the Inter Expo Center”, said vice-mayor Minko Gerdjikov. The aim is the construction of the section for which an investor has been chosen to start immediately.Negotiations with the European investment bank are led for the first time since Bulgaria's membership in the European Union.185 million euro were granted to Sofia under the Functional program “Transport”, reminded Gerdjikov.The outcome of the negotiations should be clear by tonight. The vice-mayor expressed hope for a positive outcome so that the implementation of the project to start immediately.
Standard & Poor's lowers credit rating of two of Bulgaria's largest banks
The financial analysis agency Standard & Poor's decreased the credit rating of UniCredit Bulbank and the United Bulgarian Bank (UBB), the Pari Daily reported Sunday.Both the short-term, and the long-term ratings of Bulgaria's largest bank - UniCredit Bulbank - have been lowered from BBB+/A-2 to BBB/A-3. The short-term rating of the third largest bank in Bulgaria - the UBB - has been lowered from A-2 to A-3; its long-term rating has been confirmed at BBB. The Standard & Poor's perspective of both banks remains negative.The decision on UniCredit Bulbank and the UBB comes after on Thursday Standard & Poor's lowered Bulgaria's long-term and short-term credit ratings from BBB+/A-2 to BBB and A-3 respectively because of the country's increased vulnerability amidst the raging global financial crisis.
17 Bulgarian banks with assets above BGN 1 billion
There are a total of 30 banks operating in Bulgaria, according to the latest statistics released by the Bulgarian National Bank. 17 out of the 30 control assets of more than 1 billion leva.Unicredit Bulbank tops the list for the second year in a row. The bank's sassets rose from 7.85 billion (4 bln euros) to 10.7 billion leva (5.47 bln euros) in the past year.DSK Bank retains the second position. Its assets expanded by 26.41% to 8.76 billion leva (4.47 billion euros).Two other banks have assets above 7 billion – United Bulgarian Bank and Raifeissen Bank. Eurobank EFG ranks fifth on the list.Piraeus Bank moved up to number six after increasing assets by more than 50% in the past year.Number seven is FIBank, which is the highest ranking 100% Bulgarian-owned bank.The top 10 also includes SG Expressbank, Alfa Bank and EIBank, followed by two other public banks – Corporate Commercial Bank and Central Cooperative Bank.The following also control more than 1 billion in assets – Allianz Bank Bulgaria, Unionbank, Municipal Bank, Investbank and ProCredit Bank. Emporiki Bank recorded the fastest hike in assets – by some 266%. Runners uo here are Alfa Bank and MKB Unionbank, which expanded assets by 92&% and 82% respectively.Here is the complete chart (assets in BGN):
|
№ |
Bank |
Sept '08 |
Sept '09 |
|
1 |
Unicredit Bulbank |
10703055 |
7853974 |
|
2 |
DSK Bank |
8766128 |
6934423 |
|
3 |
UBB |
7915845 |
5259537 |
|
4 |
Raifeissen Bank |
7160620 |
5289091 |
|
5 |
Eurobank EFG |
5542991 |
4556211 |
|
6 |
Piraeus Bank |
4238750 |
2818233 |
|
7 |
FIBank |
4223360 |
3705766 |
|
8 |
SG Expressbank |
2442035 |
1718544 |
|
9 |
Alfa Bank |
2148471 |
1115954 |
|
10 |
EIBank |
1908822 |
1583711 |
|
11 |
Corporate Commercial Bank |
1820272 |
1388361 |
|
12 |
CCB |
1651022 |
1416432 |
|
13 |
Allianz Bank Bulgaria |
1646193 |
1327674 |
|
14 |
Unionbank |
1409537 |
772782 |
|
15 |
Municipal Bank |
1174436 |
885050 |
|
16 |
Investbank |
1162029 |
1020488 |
|
17 |
ProCredit Bank |
1038715 |
713198 |
|
18 |
BACB |
828999 |
652131 |
|
19 |
International Asset bank |
555228 |
492936 |
|
20 |
BNP Paribas |
544388 |
545959 |
|
21 |
Emporiki Bank |
440317 |
120178 |
|
22 |
ING Bank |
425105 |
407933 |
|
23 |
City Bank |
378378 |
452352 |
|
24 |
Tokuda Bank |
338485 |
245137 |
|
25 |
Commercial bank D |
299818 |
192670 |
|
26 |
Bulgarian Development Bank |
273374 |
173092 |
|
27 |
NLB West East Bank |
206228 |
172113 |
|
28 |
Texim Bank |
56023 |
49822 |
|
29 |
T.C. Ziraat Bankasi |
49629 |
44613 |
|
30 |
Bank Leumi Romania |
340 |
- |
|
|
Total |
69348593 |
51908365 |
Bulgaria to create energy exchange
An electric power energy exchange is going to be established in Bulgaria by the spring of 2009, according to Yavor Kuyumdzhiev, Deputy Economy Minister of Bulgaria.Kuyumdzhiev spoke on Thursday, during the 10-th Business Forum for Southeastern Europe, organized with the media partnership of Darik radio.The Deputy Minister further stated that the German Energy Giant RWE must also decide by the spring if they would participate in the Nuclear Power Plant (NPP) "Belene".Kuyumdzhiev said that the energy exchange would make possible the establishment of realistic electric power prices and would lead to better investment turnover.The exact structure of the future energy exchange is yet to be determined while the State is looking to adopt a model already tried by the European Union and is currently examining the models used in Leipzig and Paris.Regarding the possibility of the German RWE to decline becoming a strategic investor in the NPP "Belene", the Deputy Economy Minister explained that Bulgaria would wait until the spring for the German company to approve the negotiated agreement. In case RWE turns the agreement down, the State would look for other candidates, participants in the public tender and select one of the alternative companies. As a last resort, Kuyumdzhiev said, the State might decide to use the cash reserves of Russian banks.
Bulgaria MP's reject reduction of minimum amount for business registration
The Bulgarian Parliament on Thursday did not adopt the ten times reduction of the minimum capital requested to establish a limited responsibility company in the country. The project for changes in the Trade Law provided for the minimum capital to go down from BGN 5,000 to BGN 500, which the Members of the Parliament (MP's) rejected at second read. They did, however, approve the article providing changes in the way the amount is deposited - the first installment would now equal 30% of the capital, instead of the current 70%.The idea to reduce the minimum capital was introduced by the opposition MP Marin Dimitrov, who believes that the move would encourage entrepreneurship in Bulgaria. It became clear even before the vote, during the discussions, that the MP's would not approve the change.
BNB Governor: Bulgarians will spend less next year
"Next year, the consumption of the Bulgarian households will shrink from 5.6% to 4.5% from the country's GDP, because the growth of the salaries will slow down," Governor of the Bulgarian National Bank, (BNB), Ivan Iskrov, said during a sitting of the Budget and Economic relations Committees in Parliament, dedicated to next year's budget.
"The world financial crisis is already felt in Bulgaria as foreign investments are going down in size and the procurements for Bulgarian firms mostly in the mining sector, are shrinking," Mr. Iskrov went on. "However, the Bulgarian banks are not threatened by the crisis, because they have not used instruments that have proved problematic worldwide. Still, the banks here have become more cautious and they seek stability rather than market expansion. The world is experiencing economic recession. Obviously, the banks in the EU are not threatened by mass bankruptcies, but the demand for Bulgarian goods will logically shrink," Iskrov said. The investors are waiting to see what will happen. Next year's budget has enough buffers to shield the banking sector against the global financial crisis.
INVESTMENTS:
Bulgaria - a future heaven for investors in renewable energy
Bulgaria will become a paradise to all who invest in solar energy, it transpired at a conference on alternative energy sources. With the adoption of the amendments in the new Energy Act, the contracts for purchase of produced electricity will be valid for a period of 25 years. This will guarantee not only returns for the investments but fair profit as well. "In terms of competitiveness, we could surpass even Germany, where energy contracts last 20 years. We've got great potential to build renewable energy power plants," Deputy Minister of Economy and Energy Valentin Ivanov said.He added that the conditions for solar power plants in Bulgaria are great as 1 sq. m of sun battery produces as much as 1,450-1,600 kW/h. "The future belongs to the sun because water is growing scarce and is used mainly for drinking, and wind in our country is inconstant," Ivanov said.
Solar energy - the new business
By the end of 2020, 16% of the energy used in Bulgaria should be from renewable sources according to the requirements of EU. The reason is the increasing global warming and pollution, which determine the need for new ecological technologies to provide for the increased energy consumption. This need opened the doors of a new business - solar installations. The geographic location of Bulgaria is very beneficial - the country has potential of 1,300 kWh/sq. m annual sunshine, which is by 30% more compared to Germany, for example. The difficulties in this business are the long time needed for obtaining licenses and permits for the start of such projects - between 6 and 12 months, compared to 2 weeks in Spain. The price paid for the solar energy is also low compared to the high investment needed for such investment, businessmen say.
Installation of photovoltaic systems can be sponsored by EU from the Programme for the development of rural regions. Banks in Bulgaria also grant credits for such projects with about 10 years refunding term, which is usually not enough to have return on the investment. Household consumers will have the greatest difficulties for installing solar panels, Velizar Kiryakov, president of the Association of Ecological Energy Producers (AEEP), said. The administrative procedures for licenses take about one-one and a half year and there are some omissions in the legislation system in Bulgaria concerning whether investors should pay accession tax or not.
Koreans are building a town with shops along the sea
A trade centre, as big as a town, will be raising up along the Black Sea Coast. A holding company from South Korea is intensely searching for a building plot along the coast, in order to build an enormous centre. A private company is holding negotiations with several municipalities. The investor wants to buy a plot of minimum 18 000 decares. However it is hardly possible to be found such a big plot on the coast. The mayor of Nessebar, Mr. Nikolay Dimitrov, said that he had finalized the Korean negotiations with a flat refusal. The investors now are turning to the north part of the Black sea in Bulgaria. Their idea is to build a trade centre of enormous size – like a whole town. Koreans are categorical that they will build only shops and malls, but not hotels. Lately investors from Russia and China are also showing interest for the Bulgarian coast. But they are looking intensely for fields to develop agricultural activities. Chinese liked the villages nearby Nessebar, but keep in secret what exactly they are planning to plant. The villagers think it is speaking of energy cultures.
Capital Sofia attracts 80% of Bulgaria's foreign direct investments
Bulgaria's capital Sofia has attracted 78% of the country's total amount of foreign direct investments in 2007-2008.This was announced Friday by the Deputy Mayor of Sofia Minko Gerdzhikov during an international conference on the implementation of EU's Lisbon Strategy in the development of the city.Gerdzhikov pointed out there were over 700 000 employed persons in Sofia, and that the average monthly salary in the capital city was EUR 287, which was 31% higher than the average salary in the country as a whole.In addition, Sofia provides 33% of Bulgaria's GDP, and its own economic growth is 13 to 15% every year.The Deputy Mayor said the capital attracted foreign investors with its favorable geographic location, the lower salaries in comparison to those in Central Europe, and the high number of young people who graduate from universities each year.
EC: Speed of the investment growth in Bulgaria to decrease
The European commission expects the rapid economic growth in Bulgaria to slow down, the consumption and the investments to decrease, and the growth of the salaries and the inflation to return to lower levels than the current ones. This is written in the autumn economic forecast of the European commission, published on Monday, cited by BTA.The condition of the international financial markets, the long drop in the global economic activity and the high prices of the energy will inevitably affect the internal demand in Bulgaria, which together with the big investments is accepted as one of the main factors for the economic growth up to date, prognoses the European commission.After a very bad presentation in 2007 the Bulgarian export starts marking recovery in 2008. However, because of the overall decreasing foreign demand, the expectations are the Bulgarian export to slow down in 2009 before a partial ascending correction to be marked in 2010. At the same time, because of the decreasing internal demand there will be reduction also in the Bulgarian import, is pointed out in the prognoses.According to the European commission the inflation in Bulgaria this year is expected to reach 12.5%. Due to the overall economic drop in the world and the shrinkage of the internal demand in Bulgaria, the expectations are its inflation to be around 8% in 2009 and lower in 2010. In the unemployment forecast it is pointed out that the expectations are the tendency for reduction to continue, with the percent of the unemployed in 2009 being probably under 6%.
General Electric interested in eco projects in Bulgaria
Cristian Colteanu, regional manager of General Electric for Bulgaria, Romania and Moldova, shared for Pari daily the interests of the company in the construction of wind power stations with 2.5 MW turbines as well as in projects using cogenerations, i.e. technologies producing simultaneously electricity and thermal energy. Since 1994 the company has been developing business in the country with gas turbines for decreasing carbon dioxide emission.
Greek-owned Biocheck to invest �5 M in three medical centres in Bulgaria by end of 2011
Bulgarian healthcare firm Biocheck, majority-owned by Greece's Ergo Hospital, plans to spend over 5.0 million euro ($6.4 million) on opening three medical centres in the country by the end of 2011, Biocheck's general director said on Tuesday.The company plans to invest own funds to open centres in the cities of Plovdiv, Varna and Burgas, Stefanos Michmidis told reporters at a presentation of the company at the Bulgarian Stock Exchange (BSE), where its shares were admitted for trading on Tuesday. Each of the centres will increase the company's sales by at least 20-30%, he added. Biocheck, which currently operates a medical centre in Sofia, expects its sales to exceed 1.0 million levs ($652,000/511,000 euro) this year, compared to 822,000 levs in 2007, Michmidis said.He added that the company plans to tap the Bulgarian capital market at a later stage to further expand throughout the country.Biocheck has a capital of 930,900 levs divided in the same number of shares.Earlier this year, the company said it plans to float 10% of its existing share capital on the Sofia bourse. No company shares had traded by 0900 GMT on Tuesday. Ergo Hospital owns an 85% stake in Biocheck and indirectly controls the remainder through Bulgarian-registered Medigroup.
Bulgaria tops IBM 2008 report for foreign investments in service jobs
Eastern European countries are quickly emerging as key locations for services investment, with Romania, Bulgaria, and Hungary among the top 10 global destinations, according to data published in the IBM 2008 Global Location Trends report.As investment into India and China declined significantly in absolute numbers and with India remaining the top location for services functions, the reports' data indicates that some Eastern European locations are improving sufficiently in skills to become strong location alternatives for services investment, while maintaining cost advantages.According to the IBM 2008 Global Location Trends report, the improvement becomes particularly evident when taking account of differences in population size, with Bulgaria being the world's top performer and Hungary number three.Serbia and the Balkans, the report explains, have become new major recipients of investment, as these locations are increasingly seen as alternatives to traditional Eastern European "hot spots" that are experiencing tighter labor markets and increased competition for skills. This is particularly evident when looking at jobs created from foreign investment compared to population size, where Bulgaria, Romania, and Serbia are all ranked in the top 10 globally, and Macedonia is in the global top 20.In Europe, the widening of the global economy manifested itself in increasing investment activity outside the European Union, with countries in South-East Europe (such as Serbia) emerging as locations for investment. While the UK is the greatest recipient of jobs from foreign investment in Europe, followed by a handful of Eastern European countries, these developments continue the trend towards South-East Europe, which was identified last year (when Romania and Bulgaria were both major new recipients of investment).This year's Global Location Trends report by IBM Global Business Services shows that global investment activity continues to widen, penetrating deeper into more economies, and bringing the potential for new growth and prosperity to more people than ever before. This expansion has brought unprecedented levels of investment to countries previously on the periphery of the world economy. Companies are now actively seeking out and finding investment opportunities in Latin America and Africa, for example, capitalizing on the talents and assets that these vast regions have to offer.IBM's Global Location Trends reports are based on analysis of data from IBM's proprietary Global Investment Locations Database (GILD). GILD records investment project announcements around the world on an ongoing basis. With currently information for over 70,000 investment projects recorded since 2003, GILD provides unrivalled insight into global trends in corporate location decision making.
Bulgarian builder Holding Roads to invest �30 M in Ukraine, Albania in 2009
Bulgaria's blue-chip infrastructure group Holding Roads said on Thursday it plans to invest some 30 million euro ($38.7 million) in Ukraine and Albania next year. The group will invest 20 million euro in Ukraine and 10 million euro in Albania, |it said in a statement but gave no details. The holding group has sales offices in both Ukraine and Albania and also in Macedonia and Poland. "Holding Roads, incorporating road, bridge and railroad builders among others, has the confidence to participate in projects in Bulgaria and abroad," its board chairman Orlin Hadjiyankov told the opening of the 10th Southeast Europe Economic Forum in Sofia late on Wednesday. Last week, the group said its 51%-owned subsidiary in Albania, Balkan Roads, was awarded a 1.5 million euro deal to build a regional road in central Albania. Hadjiyankov also said that the group's annual consolidated gross profit is seen exceeding 200 million levs ($131.9 million/102.2 million euro) on revenue of over one billion levs after 2010, thanks to EU allocations. Holding Roads has said it expects to book 42 million levs in net profit on revenue of 210 million to 220 million levs this year. Last year the company more than doubled its consolidated net profit to 15.9 million levs. Bulgaria, a European Union member since 2007, plans to pour billions of euro into upgrading its worn-out infrastructure until 2015 to sustain the fast economic growth. The country stands to receive almost seven billion euro from the EU's cohesion and structural funds until 2013. Shares of Holding Roads, a component of the SOFIX index of the Bulgarian Stock Exchange, ended 6.5% lower at 4.3 levs in a volume of 24,609 stocks on Thursday.
COMPANIES:
Bait Expo exhibition begins in Sofia
The 13th annual edition of the international specialised exhibition of information and communication technologies (ICT), Bait Expo, will be held on November 4-8 2008 at the Inter Expo and Congress Center in Sofia.Organised by the Bulgarian association of information technologies (BAIT), it has established itself over the years as Bulgaria's most popular exhibition specialising in information and communication technologies.As in the past, the exhibitors have been segregated and designated in four major sectors: hardware products – computer systems and components, office equipment; software – the newest Bulgarian and international software products, business management systems and services; telecommunications, network solutions and internet services; and lastly, multimedia and digital home goods.With each annual edition, the number of varies between 110 to 130 firms, and their products and services are exhibited to the general public in the Inter Expo Center over more than 3000 sq m. The latest releases and newest cutting edge IT and communication trends are shown at the event.The interest of the event has been so phenomenal that only in the space of two or three years, international companies have been interested in participating, and the expo gravitates more and more popularity, both at home and abroad. For instance, at the Bait Expo 2007 the Taiwan Trade Centre in Sofia (TAITRA) has mediated the organisation of a collective stand area for a large spectrum of participating Taiwan firms. In 2008, as a result of increased interest, one of the dominant participants will be the Korean Agency for Trade and Investments Enhancement (KOTRA) which present leading Korean brands to Bulgarian IT experts and enthusiasts. Bait Expo 2008 will traditionally offer exhibition representation to all the trends in the sector of the information and communication technologies providing decisions predominantly for the small and medium businesses.This year, an additional exhibition hall will be allocated to entertainment electronics, the latest cutting edge devices designed for the “digital home”. Additionally, there will be a section within the exhibition which will be predominantly about the use of technology in education - software products from both Bulgarian and foreign firms, computerised applications, visualising models and systems and others.Some of the important issues which will be raised at this year's Bait Expo will revolve around Government policy aimed at stimulating ICT development, planned large-scale projects and investment possibilities, and issues of regional cooperation and development. This year will mark the growing attention towards the issues propagating from cooperation between the neighboring Balkan states at a political state level, as well as between similar branch associations and the firms from this region.
Bulgarian Markam Fashion expands in Romania
Bulgarian fashion clothes maker Markam Fashion opened a franchise store in the Romanian city of Buzau. It is situated in Galeria Buzau Mall and delivers the latest winter collection, which was selected for the grand finale at the Dusseldorf fair in February. Markam will cut the ribbon for another four shops in Romania by the end of 2009. In June the company opened its first franchise unit in the four-star Rin Grand Hotel in Bucharest.In December 2007 Markam inked a franchise agreement with Eurtrop Consulting, giving the latter rights to use the name and the trade mark in Romania. Markam began its preparation for the Romanian market entry by establishing a unit, which has already signed preliminary agreements for shop renting.In November the manufacturer will open a unit in Sofia.
US trade chamber in Bulgaria discusses the elections
The American trade chamber in Bulgaria organizes a business-discussion with the ambassador of the United States Nancy McEldowney on the results from the US presidential elections.The American trade chamber in Bulgaria supports the development of the business of its over 300 companies – members, by creating environment for contacts between them, mediating their dialogue with the government and developing the economic ties between Bulgaria and USA.
Trade boom with the EU
The number of firms in Vratza municipality, which trade with the European Union has increased by 200. This was revealed after a comparative analysis of firms, submitting VIES declarations from the beginning of the year up to now, the National Income Agency announced.Now these firms are 2 041, while in January they were 1 841.VIES declarations are submitted every month by the 14th by firms, registered according to the VAT law.A preferred method for submitting these declarations is electronically. The companies use Internet to submit Intrastat declarations and monthly VAT information.The National Income Agency offers the opportunity for electronically submitted declarations, documents and data on the VAT law, the law on corporate taxation and the law on taxes of individuals.
Bulgarian Elemag expands amid crisis
Bulgarian gourmet supermarket chain Elemag is expanding operations by opening new outlets across the country despite the global economic downturn.The company unveiled a store in the southwestern town of Sandanski in October, and plans an opening in northern Pleven by the end of November. It will step in the central town of Gabrovo next year.The chain's stores outside the capital are located in big-box shopping centres.The Sandanski outlet is in the town’s first mall. It has a retail area of 900 sq m and offers more than 15,000 items including meat and dairy products, white and read wines, organic foods and delicacies.Elemag has so far booked healthy sales and performed better than last year, owner Bozhidar Petrakiev said recently. The chain's goal is not to become the biggest retailer, but to provide the best quality products.Elemag was set up in 1998. It runs three supermarkets in Sofia's upscale quarters of Lozenets and Izgrev.
Zarneni Hrani takes 60% of bio diesel market
Bulgarian agricultural conglomerate Zarneni Hrani Bulgaria of bluest blue chip industrial conglomerate Chimimport cut the ribbon for a EUR 15 million biofuel plant in the eastern town of Provadia. The unit’s annual output of up to 100,000 tonnes will be shipped to Romania, Spain, Italy, Austria and Israel, said executive director Georgi Kostov. No biofuels are available on the Bulgarian market although local law requires mineral fuel producers and importers to mix in up to 5% of bio component. ZHB’s new installation will sweep the company on top of the Bulgarian market of which the company makes 60%. ZHB has slated EUR 12 million for boosting the capacity of its oil mill in Provadia to 600,000 tonnes of sunflower seed per 24 hours from 230,000 tonnes at present.
Bulgaria admits German RWE upset about Belene NPP
Bulgaria’s national power utility NEK will wait till next spring for German company RWE to decide whether it will join the Belene nuclear power plant project in the Danube town of the same name.The energy ministry has not set a deadline for approval of the shareholders’ agreement which gives the German strategic investor a 49% stake in the project company, said deputy minister Yavor Kuyumdjiev adding that RWE would make a grave mistake if it succumbed to pressure by eco activists.German newspaper Handelsblatt reported recently that RWE’s supervisory board may postpone the vote on the agreement until 2009 to make sure that the project is not risky and see how what turn the global economic crisis would take. Meanwhile, Greenpeace urged the German company to quit the project. If the plant failed to attract funding, the state may dip into the EUR 12 billion foreign exchange reserves, Kuyumdjiev said. He probably meant the fiscal reserve of BGN 12 billion. The forex reserves are just above EUR 14.2 billion, under data of the central bank.As a last-ditch option, the nuclear plant will be funded by Russia.Economic parliamentary committee chairman Yordan Tsonev declined that the government has ever discussed funding infrastructure projects by the fiscal reserve.
BDZ to discharge employees because of "Kremikovtzi"
The Bulgarian state railways (BDZ) will discharge its employees if in 20 days “Kremikovtzi” completely stops working, informs news.bg.BDZ officially claimed that it could not comment the issue until a report on the difficulties, which the stopping of the metallurgic enterprise could cause, was being prepared.“Kremikovtzi” owes 11 million euro for implemented cargo transportation till 2007. At the moment the enterprise is paying only its current duties.The problem with “Kremikovtzi” is not a small one and this is a problem for the transport in Bulgaria because these are 20% of the revenues of BDZ. This said at the end of the last month the minister of transport Peter Mutafchiev.BDZ has problems with the payment of the salaries of its employees because of the problematic situation in March this year with the service of the transportations for “Kremikovtzi”.Then BDZ claimed 12 million euro from the metallurgic enterprise for implemented transportation.
Bulgarian branded textile products maker AlfaCommerce opens �6.2 M plant
Bulgarian maker of branded umbrellas, banners and related textile products AlfaCommerce opened on Thursday a 12 million levs ($7.8 million/6.2 million euro) plant in Sofia, which will help it achieve an annual sales growth of 20-30%, a senior company official said on Thursday. The plant, which will increase the company's capacity by three to four times, can manufacture 12,000 to 15,000 metres of printed textiles a day, AlfaCommerce production director Ivo Ivanov told SeeNews over the phone. At present, the company has an annual turnover of 18 million levs with exports accounting for more than half of the figure.AlfaCommerce is one of only four companies of its type in Europe. The other three are located in Turkey, Poland and Croatia, Ivanov said.
GLOBAL FINANCIAL CRISIS ANALYSIS AND NEWS:
EU expects external imbalances, high inflation in Bulgaria
Despite the robust economic activity and its resilience to the deterioration in the global economy, the worsening external conditions are expected to have an impact on Bulgaria, the European Commission says in its forecast on the Bulgarian economy, BTA reported. The document is part of the autumn economic forecast for the EU member states released by the European Commission on Monday.The autumn economic forecasts update the outlook for the period 2008-2010 for the EU and Euro area aggregates. In the abstract to the document, the European Commission says that the economy "is expected to come to a virtual stand-still in both the EU and the euro area in 2009". The authors believe that this downturn will help ease inflationary pressures as oil prices come down and the risks of second-round effects diminish. They say that but both labour markets and public finances are set to deteriorate, and note that all forecasts are "surrounded by considerable uncertainty at the current juncture and downside risks prevail".In Bulgaria, real GDP growth is expected to decrease from 6.5% in 2008 to 4.5% in 2009. Growing risk aversion among foreign investors could result in a more significant deceleration in capital inflows and investment than assumed, while rising interest rates and persistently high inflation may additionally dampen real disposable income and private consumption, the document says.Private consumption expenditure is expected to slow from 5% in 2008 to about 4.5% in 2009, while public consumption expenditure growth will be further boosted by additional current spending in 2008, reaching around 4%.After a brief recovery of export growth in 2008, exports are expected to decelerate in 2009 as a result of lower external demand, followed by a partial upward correction in 2010, as industrial restructuring and the large foreign investment stock affect the country's export potential.Due to weaker domestic demand, import growth is expected to decelerate from 9% in 2008 to around 6.25% in 2009.The trade deficit is expected to narrow only gradually in 2008-2010, inducing a small reduction of the very high current account deficit to about 21.5% of GDP from a level of slightly over 24% of GDP in the second half of 2008.With the employment rate expected to reach almost 64% in 2008, increases in 2009- 2010 are expected to be of a smaller magnitude. The unemployment rate will maintain its downward trend, falling below 6% in 2009.Having accelerated to above 20% in 2008, nominal wage growth is expected to remain high during the forecast period. However, it may slow down as a result of weaker labor demand due to increased wage costs and the economic slow-down in the next two years.Labor productivity is expected to increase from around 3% in 2008 and 2009 to almost 3.5% in 2010, well below wage growth. As a result, nominal unit labor costs developments will continue to reflect a persistent deterioration of price competitiveness compared with the EU average.The imminent global economic downturn and the resulting fall in domestic demand could potentially slow inflation to below 8% in 2009, followed by a further deceleration in 2010. However, future developments in commodity prices and the capacity to contain second-round effects remain crucial to the inflation outlook, the report says.Having noted the better-than-targeted surplus of around 3.25% of GDP, the report warns of possible slippages with regard to the official targets on the expenditure side, in the wake of approval of additional social and infrastructure spending.The general government gross debt is expected to drop well below 10% of GDP by the end of 2010.
Clouds gathering over Bulgarian economy
Although Bulgaria insists that its banking system is sound enough to weather the global financial storm, its economy will not be able to escape the downturn as the world tilts into recession, analysts say. "Bulgaria's economy benefited from the exceptionally good global environment in the past years, when a bounty of free foreign capital was invested here."But now the country has to brace for the negative effects of the tightening global outlook," said an analyst at the Sofia-based Institute for Market Economy, Dimitar Chobanov."There are already signals that some planned investment projects will be frozen or cancelled. Bulgaria's exports to recession-hit EU countries will also slump," Chobanov told AFP. on Monday, the EU Commission in Brussels said the worst financial crisis for generations has driven the 27-nation European Union into a recession and economic growth will come close to a standstill in 2009.For Bulgaria alone, Brussels predicted growth would slow to 4.5 percent next year from an anticipated 6.5 percent this year."The major effect of the global crisis on Bulgaria will be a thinning inflow of foreign capital, which will also slow down industrial activity and might push up unemployment," said another analyst, Georgy Ganev of the Centre for Liberal Strategies.
The international credit rating agency Standard & Poor's set the alarm bells ringing already last week by cutting Bulgaria's sovereign debt ratings to just within investment grade, expressing concern that the foreign cash fuelling the country's strong growth of about 7.0 percent was in risk of drying up as the global credit crunch bites.S&P also warned that if Bulgaria's economic and fiscal outlook were to deteriorate further it would lower the ratings again, bringing them down to junk status.The Bulgarian government also seems to be aware of troubles ahead, slashing its official growth target for next year to 4.7 percent from a previous estimate of 6.5 percent.Sofia also predicted that foreign direct investment would slump to 5.4 billion euros next year from a projected 6.2 billion euros in 2008.Bulgaria's booming private external debt and an ever-growing current account deficit that is expected to reach 24 percent of GDP this year also make the country vulnerable, analysts said.But a currency board arrangement with the International Monetary Fund which ties the lev to the euro at a fixed rate as well as the country's particularly strict fiscal policy would prevent Bulgaria from following Hungary down the path of countries in need of emergency bailout cash, said analyst Chobanov. "Bulgaria's government has been quite prudent in its spending and will again target a hefty budget surplus of at least 3.0 percent of GDP in 2009 which will act as a buffer in case of trouble," he said.Also counting in Bulgaria's favour: Sofia is expected to wrap up 2008 with a fiscal reserve of some 15 billion leva (7.5 billion euros)."There are enough buffers in the budget to withstand a crisis," Open Society analyst Georgy Angelov said.But he criticised the government for failing to further improve the investment climate by streamlining the administration and lowering the social security and tax burdens on companies.Bulgaria's finance ministry and central bank have meanwhile rushed to prevent a panic in the banking sector by ensuring depositors that they stand ready to shore up any bank that might face liquidity problems.Analysts and government officials however agreed they see no immediate risk on the horizon."Bulgarian banks have no serious exposure to toxic instruments or external risks and no junk assets," said analyst Ganev.According to data compiled by the Bulgarian central bank, banks -- which are mostly owned by western groups -- have high capitalisation, good liquidity and are expected to generate profit of 1.5 billion leva (750 million euros) by end-2008.Bulgaria lived throught its worst-ever banking crisis in 1996-1997 when 14 banks went bankrupt and only IMF-imposed austerity measures helped the country emerge from it.So far, Sofia insists it is not holding any credit agreement talks with the International Monetary Fund.
The financial crisis freezes mutual funds market in BG
The financial crisis is on the way to stop the development of mutual funds market in Bulgaria. one reason is the requirement for assets at BGN 500,000 to start buy back of shares. This creates risk both for the investors and the mutual scheme. At present a total of seven mutual funds are under the BGN 500,000 limit of shares. So far no company has missed to gather the required minimum, the Financial Supervision Commission commented for Pari daily, but the situation has changes as a result of the financial crisis.
Trade at Sofia Stock Exchange shrinks by another 15%
Over the next three months the shares of many companies at the Sofia Stock Exchange will lose at least fifteen percent of their value, said Boncho Ivanov, portfolio manager at UBB Asset Management. He took part in a seminar dedicated to the global financial crisis and the Bulgarian capital market, organized by the club of the finance journalists AAA. To his words, the trade at the stock exchange has reached its lowest level and it will remain at the bottom for at least a year, after which time SOFIX will start crawling up. The entrepreneurs had better put up with their lower profits, because any attempt to boost them in the current conditions on the market may lead to even greater losses,Ivanov said. The exodus of foreign investors from Bulgaria has caused the trade volume at the stock exchange to shrink drastically over the past two months. The investors are moving to better known markets.The markets in East Europe and Scandinavia offer better recoverability than these in the USA, Veneta Ilieva from the Bulgarian-American Credit Bank said. To her words, Europe has buffered the effects of the crisis, thus helping the US.
Media & economists should stop threatening people with the Great Depression
The inflation and the growth of the Gross domestic product (GDP) in Bulgaria in the next year will be less than expected. The claims, however, that the effect of the world financial crisis will reach the scope of what happened during the Great depression in the United States in 1929 are irresponsible and the press and the economists should stop threatening the people.This pointed out in a special interview for Darik radio the professor in applied economy in the the American university “John Hopkins” - Steve Hanke, also known as the father of the currency board in Bulgaria. He supported the thesis that exactly the currency board in the country would prevent the Bulgarian lev from collapse compared to many other countries where currency crises were observed. This what else prof. Hanke claimed for Darik:It is possible there to be this minimal chance the scenario of the Great depression to develop. But this is highly impossible and I believe that Stiglitz displays himself as a very irresponsible person together with many others who support similar thesis. These people have not studied the Great depression, they don't know its history, it was a really catastrophic event. In 1929 the unemployment level in the USA was only 3.1%. Till 1933 it reached 24.7%.If you just look at the possibilities, you will reach the conclusion that this claim is just irresponsible, because the numbers, which everyone distributes and the worst scenarios related to the current crisis, are in completely different direction and scope compared to those of the Great depression.The press and the economists should stop threatening the people with the Great depression. What is happening now is just not from the same league.
Prof. Hanke: Global financial crisis shouldn't be a scarecrow
"Next year, inflation rate and growth in Bulgaria's GDP will be lower than expected. The statements that the negative effects of the global financial crisis will be equal to those of the Great Depression are grossly exaggerated and the press should stop using the crisis as a scarecrow," said Prof. Steven Hanke, Co-Director of the Institute for Applied Economics and the Study of Business Enterprise at The Johns Hopkins University in Baltimore. He said that the currency board in Bulgaria would shield the national currency - the Bulgarian Lev, against the effects of the crisis.
Bulgaria tourism sector offers ideas to deal with global financial crisis
The Bulgarian state must undertake urgent measures to maintain and increase revenues from tourism in the conditions of the global financial crisis, is the opinion voiced by representatives of different tourist businesses and organizations in the country.They spoke at a joint press conference on Tuesday."Bulgaria is known as a budget travel destination and for this reason we do not expect our tourism industry to crash, but the upcoming year is the time for us to double our profits, exactly for these reasons," according to Stephan Sharlopov, Chair of the Bulgarian SPA Union.Sharlopov said that the State Tourism Agency's budget needed to be quadrupled in 2009 and reach BGN 22 M.The tourism sector forms 15% of the country's Gross Domestic Product (GDP) and the measures to successfully fight the crisis need to be aimed at preserving and increasing these profits, Irina Naydenova, Chair of the Bulgarian Tourism Agencies Association explained, adding that such goal could be reached by increasing the resources for tourist advertisement and complex programs to improve the quality of services in the sector.Vetko Arabadzhiev, Chair of the Union of Tourism Investors pointed out that such resources could be provided by the establishment of tourist taxes or creating special municipal funds.According to Arabadzhiev, Bulgaria is as tourist destination offering a combination of good value and services, with decent infrastructure and sufficient investments, a destination that would soon surpass Turkey, where the tourism sector is tied up with the USD, which would inevitably lead to a price hike in Bulgaria's southeast neighbor.Arabadzhiev pointed out that publicity needs to be focused more on countries such a Russia, Hungary, the Czech Republic, Romania and Poland due to the traditionally strong interest towards Bulgaria.Other ideas voiced at the press conference included the development of cultural, yacht and spa tourism so that Bulgaria could distance itself from the limiting image of a predominantly sea and ski destination.The press conference participants stated that they opposed changes in the law for tourism and united around the proposal to create an entirely new tourism law.
Industrial plans put on the back burner as economy reels
Investors have slowed down or halted industrial and logistics centre projects in the face of administrative hurdles and a worsening global financial market, showed a research of property consultants Colliers International. The projects’ fate will be decided in the next three or four months, said Simeon Mitev, manager of real estate agency RE/MAX Chance Group. A humble 23,000 sq m of speculative logistics areas entered the Sofia market in the first half of the year, under data by Colliers. Demand for modern industrial space is still high and outstripping supply, said Mitev. Construction is booming in villages, small towns, outside the capital, in old urban zones and along key transport corridors. Investors are battling speculative plot prices, a falling number of plots with good location, and heavy red tape. Good plots outside the urban infrastructure zone near Sofia Airport are offered at over EUR 1,000/sq m, said Hristina Angelova of Yavlena Real Estate. The warehouse market is dominated by freight-forwarding companies and FMCG retailers, who seek to rent some 2,000 sq m at good infrastructure, according to Colliers. Rental prices of renovated storage space may dip if new projects enter the market, forecast Raiffeisen Real Estate.
The financial crisis delays the privatization of hospitals
There will be no privatization of hospitals by the end of the year. This was forecasted by the economist from "Open Society" Georgi Angelov, cited by BNR.Bulgaria's reputation on privatization is not good and elections are coming next week, Angelov motivated his arguments.He reminded that up to now the state has not concluded a successful privatization, which has left a wrong impression with people."The state neither found a suitable strategic partner, nor did it take enough funds. Now people think that privatization is something bad. This is the case only in Bulgaria", Georgi Angelov said.According to him, the delay of the privatization of hospitals will be affected by the financial crisis on a global scale.Georgi Angelov thinks that health care in Bulgaria must rely on big foreign investors.
Deutsche Bank urges real economy back-up against depression
Bulgaria should concentrate its efforts on keeping competitiveness, raising the quality of labour and improving infrastructure to open up new opportunities, Deutsche Bank board member Jurgen Fitschen told a lecture on the financial crisis and its impact on the economy. Bulgaria has so far managed to stand up to the financial challenges but the upcoming second wave of the crisis will strike a blow to developing markets, including Bulgaria, according to Fitschen. Governments’ joint steps to ease the strains on the global markets are not a sign of power but of the opposite, said Fitschen adding that the government is not the good manager of a business. The global economy will resume its normal course of action in the second half of 2009, but countries with hard-hit capital markets will need more time to resuscitate their economies. Governments should work out measures to shore up the real economy and feed it with much-needed cash to help it go forward. Otherwise the world may face a much bleaker scenario of slipping from recession to depression, Fitschen warned.
Business people demand concrete measures from state against global crisis impact
Prompt measures should be taken to assist the business community in the conditions of a global financial crisis, Bulgarian Chamber of Commerce and Industry (BCCI) Chairman Bozhidar Bozhinov said at the opening of a roundtable discussion on the topic on Wednesday. He presented the measures which the State should take according to the BCCI.The business community insists on stronger public presence in the control bodies for the utilization of EU funding and where the State cannot cope, Bozhinov said. According to him, there is a lack of competent personnel who can cope with the management of EU funding, which is why there is 3,500 million euro in unabsorbed funding under preaccession and accession programmes. As the funding for large projects, mainly infrastructure ones, will not come from EU funds, it will be provided from the national budget, but it will come through the same administration, Bozhinov said.BCCI Deputy Chairman Krassimir Dachev said a well-considered system should be developed for the provision of funding from the State to banks. The State should provide assistance to those who are temporarily unable to repay their loans, he said.Another Deputy Chairman of the BCCI, Todor Staikov, proposed reducing the compulsory bank reserves. For Bulgaria they are 12 per cent, and for the EU - 8 per cent on average, he argued. The State can take the risk because banks have very good liquidity,Staikov said. He also proposed setting aside money from the national budget for the State to purchase part of its bonds, regardless of the fact that Bulgaria's internal debt compared toGDP is one of the smallest in Europe. These two measures will help relax crediting, otherwise EU funding will remain unabsorbed, he added.Construction sector representatives said that optimistic trends are set in the draft national budget for 2009, but the picture in 2009 will be different: housing construction will decrease, and the State should provide preferences for young families who want to have housing.Alexander Kashoukeev of the BCCI said Bulgaria's problem is at the microeconomic level. Inter-company debts will kill business in the country, because companies credit one another. Orlin Vladikov of the BCCI Management Board said that bank crediting has practically stopped for about a month now, both for natural persons and for companies.Among the measures proposed by the BCCI is a relaxation of administrative regulation by adopting a Sectoral Organizations Act and providing these organizations with the authority to administer the lightest registration regimes. Another proposal is to give regional governors the power to control municipal fees, and to make public the register of the National Revenue Agency in the part of annual financial reports and consolidated financial reports.To improve tax regulation, the BCCI proposes a reduction from 15 to 10 per cent of the tax rate for the income of sole traders, a revocation of the tax on dividend and of the 10 per cent tax on social expenses. The BCCI insists that the time frame for recovery of tax credit should be reduced to 15 days.The business representatives also propose measures to equalize the insurance rights and obligations of civil servants, to balance employment relations, and to simplify the procedures for the award of public procurement contracts.
Economy Minister proposes to SEE package of measures vs Global Financial Crisis at economic forum
Economy and Energy Minister Peter Dimitrov proposed Wednesday a package of measures which the Southeast European countries apply to overcome together the consequences of the global financial crisis. Addressing the participants in the Tenth Southeast Europe Economic Forum entitled "Regional Impact of Global Economic Challenges" which started in Sofia, Dimitrov stressed the need of accelerating as much as possible the joint crossborder projects which could offset the slowdown in the business activity of the private sector. Dimitrov said that Bulgaria would support the quick provision of short-term state loans to countries in the region which experience short-term acute needs to increase liquidity.Another measure put forward is the elaboration of short-short measures to increase the commercial exchange among the countries in the region to compensate for the reduced exports to third countries in the grip of the financial crisis.National Assembly Chairman Georgi Pirinski said in his opening address that for ten years now this forum has been discussing key issues of the economic development of the region and has already established a reputation of being a high representative and extremely valuable format for discussing and coordination opinions and guidelines for the development of a region which is ridden with challenges but also with serious opportunities.In his view part of the challenge is covered by the topic of this year's edition of the forum: Regional Impact of Global Economic Challenges.For some times now particular attention is being paid to the developing economies and whether they will survive the financial and credit crisis and whether there would be any considerable aggravation of the situation as a result of a likely withdrawal of investments.Bulgaria has remained relatively steady in such a tough moment, Pirinski further said.In the next stage the best ways for overcoming the crisis using joint efforts will be sought, the National Assembly Chairman further said.Earlier in the day, in the sidelines of the forum, Financial Supervision Commission Chairman Apostol Apostolov unveiled the Fourth Financial Exhibition: Finances for All. The exhibition will last three days, the organizers said.