불가리아 주요 경제뉴스 ( 14 - 21 NOVEMBER 2008 )

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT ( 14 - 21 NOVEMBER 2008 )

 

 

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

·        Bulgarian, Jordanian foreign ministers discuss optimization of bilateral economic relations

·        GDF Suez could substitute RWE in NPP Belene?

·        NPP Belene reactors example for third generation reactors

·        Bulgaria produces 32 billion kWh for export

·        5.6% increase of GDP in Bulgaria

·        Bulgarians invest in real property or put their savings in banks

·        Bulgarian with lowest purchase capacity

·        Danube Bridge 2 construction to bring € 60 M boost for Vidin

·        Bulgaria, Italy Port officials meet to reactivate transport corridor No.8

·        Natural gas prices expected to increase as of January 1

·        Sofia opens tender for subway station construction, trade centre

·        Sofia signs with EIB for a loan for the subway

·        Decreasing inflow of capitals to Bulgaria's economy

·        IBRD and Bulgaria sign 2 loan agreements

·        The automobile industry is preparing for protests

·        Industry Watch: Household wealth growth slows down

·        Bulgarians capital amounts to 181 billion

·        BGN 50 M inter-firm indebtedness in Bulgaria

 

 

 

 

 

 

 

 

 

INVESTMENTS:

 

·        Austria's EVN plans to invest over € 200 M in wind farms in SEE in next 2 years

·        Omani group interested in investing in Bulgarian tourism & agriculture

• € 80 M to be invested in roads along Greek-Bulgarian border

·        Hamberger invests BGN 10 M in Sevlievo

·        Financial crisis to shift Austrian investments in Bulgaria to manufacturing

·        Saubermacher invests € 9 M in ecoinfrastructure

·        Bourgasgas invests € 5 M  in gas distribution network in 2009

·        Swiss company to build plant in Pernik

·        Netherlands transport company shows interest in Svilengrad industrial zone

·        Vinprom Peshtera invests € 2.5 M in plant

 

COMPANIES:

 

·        Kozlodui power station with BGN 30.4М profit

·        IAEA writes a positive report on Kozloduy Nuke

·        Italian-Chinese tie-in inks FGD unit contract at Maritsa East 2

·        Five firms willing to heal Kremikovtzi

·        Low-Cost carrier Germanwings expects at least 5 % increase in passengers to Bulgaria in 2009

 

GLOBAL FINANCIAL CRISIS ANALYSIS AND NEWS:

 

·        Bulgaria second largest steel maker takes forced vacation due to global crisis

·        Bulgaria's railways to sack workers over effects of financial crisis

·        Financial crisis hampers sale of Bulgaria Defense Ministry real estate property

·        Projects south of Burgas for € 350 M suspended

·        Bulgaria's Building sector to survive the global financial crisis

·        Malls construction breaks off over world crisis

·        Food industry may steer clear of crisis

·        PC market in Bulgaria grows despite global credit crunch

·        Crisis spills over to software companies

·        Can Bulgaria cope with the financial crisis?

·        "We аspire to overcome Bulgaria's negative image in EU" PM tells OLAF director general

 

 

 

Articles:

 

 

MACROECONOMY:

 

Bulgarian, Jordanian foreign ministers discuss optimization of bilateral economic relations

 

The optimization of bilateral economic relations topped the agenda of Thursday's meeting between Foreign Ministers Ivailo Kalfin of Bulgaria and Salah Eddin Bashir of Jordan. A Memorandum of Understanding between the two countries' diplomatic institutes was also signed.Kalfin is visiting Jordan for talks with Bashir, Senate Speaker Zaid Al Rifai and House of Representatives Speaker Abdelhadi Al-Majali.The sides discussed the challenges facing the Middle East and the Balkans, as well as the need to deepen bilateral relations. "Direct contacts between businessmen are particularly important," Bashir noted.The Ministers said that a working group of Bulgarian and Jordanian businessmen will be formed to discuss cooperation in transport, logistics, telecommunications and tourism. The working group will meet as early as next month, and arrangements are being made for a session of the Joint Intergovernmental Commission. A high-level visit is expected next year as well, Kalfin said.The export of Jordanian goods to the European market was discussed at Thursday's meeting. "We have a shared interest in accelerating cooperation in this field," the chief Bulgarian diplomat said.Two-way trade contracted by over 13 per cent in January-August 2007: Bulgarian exports declined by over 2 per cent, and during the period Jordan accounted for 1.7 per cent of Bulgaria's trade with the Arab World. In 2007 the two countries traded 9.8 million US dollars' worth of goods and services.In recent years, Bulgaria has been exporting mostly timber, electrical engineering products and tobacco to Jordan and has been importing natural calcium phosphate from Jordan. Tomatoes and other vegetables and fruits and copper residue topped the list of Bulgarian imports from Jordan in January-August 2007, which was the first year without import of phosphate.

GDF Suez could substitute RWE in NPP Belene?

The French energy giant GDF Suez claimed on Monday that “in principle it is interested” in the purchase of a share in the second Bulgarian nuclear power plant “Belene”. Last month the Bulgarian government decided to determine the German energy company RWE for its strategic partner, who to buy a share of 49% of the planned NPP “Belene”. The Bulgarian side gave the opportunity the share of 49% to be divided into parts in order the second participant in the tender, the Belgian Electrabel, which is owned by GDF Suez, to be included in the investment. The vice-president of the French company on nuclear issues Paul Rorive has confirmed GDF Suez' interest during the energy conference in Sofia pointing our that he was not informed about the conditions under which the Bulgarian government has negotiated with RWE. The government in Sofia has claimed: you can participate in the project but you cannot change the conditions – so now the French company is checking the conditions.According to Rorive in the next week GDF Suez will explore carefully the strategic framework agreement between RWE and the Bulgarian National electric company, which remains with 51% of the shares of the new nuclear electric station. In the amount of sales GDF Suez is the biggest company in Europe for public services. Its interest in NPP “Belene” the company explains with the possibility for export of electric power in Southeast Europe.Each of the two reactors of 1000 megawatts costs 2 billion euro, claims the company constructor, the Russian Atomstroyexport. Earlier the Russian side expressed its readiness to give credit for the construction of NPP “Belene”.For attracting investors Bulgaria chose BNP Paribas, but the French banks hurried up to claim that it would not participate with own resources.Bulgarian intends to restore its position of main exporter of energy in the region and to respond to the EU criteria for carbon emissions, comments Reuters.Due to the protests of environmental organisations the supervisory board of RWE is holding up its approval for the participation as strategic investor of NPP Belene.People familiar with the negotiations claim that RWE has actual interest in NPP “Belene” but the company wants to receive more guarantees for the security of the power plant. According to informers of Reuters, the global financial crisis has made it extremely difficult to raise funds for the project and it will be possible for NPP “Belene” to start operating later than the planned 2013-2014.

NPP Belene reactors example for third generation reactors

The reactors in the Bulgarian nuclear power plant (NPP) “Belene” which are being built now and the reactors in Olkiluoto, Finland and Flamanville, France, are examples for third generation reactors. This shows the update of the European nuclear program from the package of documents from the Second strategic energy review, informs the Bulgarian national electric company.The review recommends to the new nuclear powers in EU to be only projects, whose safety and security level to be similar to that of third generation reactors. As main characteristics of these reactors the review points out the improved safety systems, protecting the environment from the harmful influences in cases of damages and external influences. The third generation reactors possess increased burning effectiveness and use less fuel for bigger energy production. They have extended project resource and life cycle, improved nuclear-fuel cycle and less volume of the highly radioactive waste and the processed nuclear fuel. one of the key measures, suggested in the EC program is to stimulate the investments in more effective, low-carbon energy infrastructure. The EC notes the important role of the nuclear energy for the transition to low carbon economy and the reduction of the EU's dependency on the import of energy resources. The EC points out that if strategic decisions for priority construction of nuclear powers and renewable energy sources are being taken fast, it is possible in 2020 two thirds of the energy production in Europe to be from a low carbon technology.With 146 reactors in 15 EU countries the nuclear energy produces today around 1/3 of the electricity on the continent. Decisions for the construction of new nuclear powers have been taken in Bulgaria, Finland, France and Slovakia. Plans for construction are being discussed in Romania, UK, Czech Republic, Italy, Netherlands, Lithuania, Estonia, Latvia and Poland.

 

 

 

 

Bulgaria produces 32 billion kWh for export

In 2020 Bulgaria would have 32 billion kWh in excess if the energy projects currently supported by the cabinet are implemented. This was announced by Plamen Tsvetanov from the Institute of Nuclear Research and Nuclear Power Engineering with the Bulgarian Academy of Science. According to him, currently Bulgaria exports 5-6 billion kWh per annum, but in twelve years there won't be markets for the extra power.
By 2050 Bulgaria will be able to rely on electricity generated by wind farms or solar batteries, which would make the country energy independent.

5.6% increase of GDP in Bulgaria

The nominal level of the GDP for the third quarter of 2008 is 18 555 million levs. Calculated in comparable prices, the GDP has increased by 5,6% compared to the same period last year. This was announced by the National Statistics Institute, cited by Money.bg. The value added from the branches of the national economy amounts to 15 488 million levs in present day prices. Compared to the third quarter of 2007, the gross added value is really increased by 6,7 percent.The increase of GDP by 5.6% is mainly due to the high rate of added value in the agriculture sector - 37,8 percent more compared to the third quarter of the unfavorable 2007.Compared to the same period last year, the increase of added value in the industrial sector is 4.3 percent, while that of the service sector is 3.5 percent.The added value, realized in the agriculture sector determines 10,7 percent of the total added value of the economy. The relative share of the industrial sector is 31,6 percent, the service sector occupies the biggest part of the total added value - 57,7 percent.

Bulgarians invest in real property or put their savings in banks

"The fortune of the Bulgarian citizens totals 181 b levs, of which slightly over 150 b has been invested in real estates," Industry Watch analyst Krassen Yotov said yesterday. The financial wealth of Bulgarian households is estimated at BGN 33,5 B for the third trimester of 2008, according to a research conducted by Industry Watch.Bulgarians keep twelve percent of their wealth in shares and mutual funds and eighty-eight percent in cash and bank deposits, whereas only 34% of the European households keep their savings in bank deposits, show the data from an opinion poll by Vitosha Research, carried out among 1,000 Bulgarians at the request of Industry Watch. The fears of Bulgarians as regards the global financial crisis are mostly connected with layoffs and increasing bank loans industries. Generally, the Bulgarians with incomes of 800 levs per month can afford saving money, mostly for the tuition fees of their children and for real estates."The reasons for the global financial crisis are mostly connected with the loose and irresponsible fiscal policy on a global level, which inevitably affects Bulgaria's economy, says Dimitar Chobanov from the Market Economy Institute. The average value of the savings of the Bulgarian citizens is 14% of the country's GDP. "The government's money-saving policy is good and credits from IMF are not really needed," Chobanov added.

 

 

Bulgarian with lowest purchase capacity

For the second consecutive year Bulgaria remains 34th in the purchase strength ranking of all 41 states on the European continent, the 24 chasa Daily informed. The 34th position is also the last for a European Union member state. Average amount of money available to the European citizen is EUR 12 500. In Bulgaria the sum is 1/5th of that or EUR 2817. Leaders are Lichtenstein (EUR 44 851), Luxembourg (EUR 28 192) and Switzerland (EUR 26 842). 44% of Bulgarians would vote for the preservation of the BGN as a national currency if the matter were to be decided today, an opinion poll revealed, the Klasa Daily informs. one-third prefers the introduction of the common European currency as soon as possible. The rest cannot decide. Keenest EUR supporters are people with material situation better than the average for the country (62%), younger people or mobile and well-informed Bulgarians. EU institutions – Parliament, executive power authorities and high judiciary organs are much more trusted than those in Bulgaria. 72% of Bulgarian admit that are not familiar with the work of the European Parliament. This however is not an obstacle fro EP to receive the approval of 40% of the people. For comparison only 12% of the people trust their own Parliament.

 

Danube Bridge 2 construction to bring € 60 M boost for Vidin

About 60 million euro will be invested directly in the regional economy of Vidin region in northwestern Bulgaria during that Danube Bridge 2 is being built to link the town to Calafat in Romania, weekly Stroitelstvo Gradut reproted.The direct investments will come as building materials, fuels, equipment, machinery, manpower and their kit. The bridge itself and the adjoining its infrastructure, including works on the Romanian side, is 274 million euro, of which 226 million are on the Bulgarian side.The deadline for the bridge between Vidin and Calafat to is October 29 2010, which is a postponement from the initial date of April 2 2010. By the end of 2008, the temporary docks will be completed for loading and unloading of the heavy bridge foundations and other elements up to 200 tons, and it is also expected that Romania would decide on who would build the infrastructure on its side of the border. Bulgaria picked Spain's Fomento de Construcciones y Contratas (FCC) to build both the bridge and the auxiliary infrastructure on its side.The bulk of the funding would come from the European Union - 70 million euro under pre-accession aid programme Ispa and another 70 million via a loan from the European Investment Bank. A further five million euro has been awarded by French agency for development AFD, which have to be used by December 31 2009.When completed, Danube Bridge 2 would become a part of European Transport Corridor IV between Dresden in Germany and Istanbul in Turkey. The bridge would have a length of 1971m and was designed by Fernández Casado S.L. and FCC Construction's technical service department of FCC Construction. Construction was expected to be completed within three years of the start.

Bulgaria, Italy Port officials meet to reactivate transport corridor No.8

Bulgarian and Italian transport officials met Monday in the Italian port of Brindisi in order to reactivate the project for the Pan-European Transport Corridor No. 8.The Bulgarian delegation included the Deputy Transport Minister Daniela Nikiforova, the CEO of the Port of Varna Danail Papazov, the CEO of the Port of Burgas Argir Boyadzhiev, the CEO of the Port Infrastructure State Agency Petar Seferov, the CEO of the Burgas Duty Free Zone Vasiliy Skripka, and the Mayor of the Danube town of Oryahovo Georgi Penkov. The visit had been initiated by the local authorities in Brindizi, and the local chamber of commerce. The Italian delegation included the Governor of the Brindisi Province Michele Erico, the Director of the Port of Brindisi Guisepe Guirgola, and the Deputy Mayor of Brindisi Paolo Chiantera. Bulgaria's Deputy Transport Minister confirmed the importance of the Corridor No. 8 for the country, and informed the Italian officials about the recent talks that the Bulgarian government had had with Macedonian and Albanian representatives on the development of the project. The Governor of the Brindisi province stressed the local authorities in the city supported exquisitely the establishing of the transport corridor, which is supposed to connect the Bulgarian Black Sea ports of Varna and Burgas to Brindizi through Macedonia and the Albanian port of Durres. The Italian side also emphasized that Bulgaria, together with Turkey, Egypt, and China, was of primary interest for the Italian port operators, and that it would like to see Transport Corridor No. 8 develop into a commercial route, which was competitive to the Pan-European corridors

 

Natural gas prices expected to increase as of January 1

 

Natural gas prices are expected to increase as of January 1, Deputy Economy and Energy Minister Galina Tosheva told journalists on Monday. The forecasts of Bulgargas are based on certain parameters, related to the fuels and the exchange rate, Tosheva also said. Commenting on plans for the transfer of ownership over Sofia's Heating Utility Company (SHUC) from the Sofia Municipality to the state, Tosheva said that SHUC is a company with influence over the security of energy supplies and the overall energy system depends on its operation. She added that the Government will most probably insist that all SHUC shares be transferred to the Economy and Energy Ministry. There are no legal obstacles under the Municipal Ownership Act to the transfer, Tosheva also said.It is not clear yet what is the amount by which the capital of the Bulgarian Energy Holding will be increased; this depends on what decision the Council of Ministers would take, said Tosheva. SHUC has outstanding obligations of 80 million leva, she stated adding that this is the minimum amount by which the Holding's capital should be raised. Meanwhile, a five-judge panel of the Supreme Administrative Court chaired by the Court's President Konstantin Penchev confirmed a decision of a three-judge panel to overrule an application challenging the new gas prices set by the State Eneregy and Water Regulatory Commission (SEWRC). Monday's decision is unappealable. However, the five-judge panel held that it is within the Court's competence to stop SEWRC's acts. This followed a decision of the three-judge panel that the Energy Act does not allow the court to stop the enforcement of the regulator's acts.

 

Sofia opens tender for subway station construction, trade centre

 

Bulgarian state-owned company Metropoliten which operates the Sofia subway has invited candidates to build a subway station and a trade centre. The applicants are to file their offers with Metropoliten by January 5 , the company said in a notice published in the European Union's Official Journal. The project envisages the construction of a 207-metre subway station and a trade centre with an underground parking for 615 cars with a combined area of 21,400 square metres. The station is part of the Sofia subway's second segment - an 18-kilometre stretch with 15 stations designed to link the city's northern parts with its centre. Sofia's subway project, launched in the 1990s, calls for the construction of a total 52 kilometres of underground railways, with overall 42 stations. The first, 19-kilometre stretch, is designed to link Sofia's northwestern parts with its southeastern part, through 17 stations.

Sofia signs with EIB for a loan for the subway

Sofia municipality and the European investment bank (EIB) will sign a contract for a long-term loan for the funding of 6.35 km sections from the extension of the subway in Sofia. This announced the press center of the municipality. The contract will be signed on Friday by the mayor of Sofia Boiko Borissov and the EIB vice president Marta Gajecka.
The loan is worth 105 million euro, with a 25-year period of return payment and with a 7-year gratis period, interest rate EURIBOR+0.1%, with a term for acquisition till 30 November 2013. The money from the credit will be for co-financing of the construction of 2.2 km of the first ray of the metro from “Mladost” district to “Tsarigradsko shosse” blvd. with two stations and a parking under the boulevard at “Inter expo center”.The loan will also co-fund the construction of 4.15 km of the second ray of the subway from station “Obelia” to station “Nadejda”. There will be four stations and two parkings. one boulevard will be widened.

Decreasing inflow of capitals to Bulgaria's economy

September has turned out to be a "border month", in which the global financial crisis underwent fundamental changes and the risks to Bulgaria's economy increased drastically. There are many explanations as to why September became such a watershed and the number of speculations as to whether a different set of actions on the part of the US Government could have prevented this scenario is even larger. What exactly happened with Bulgaria's balance of payments (BOP) in September?For a second month in a row, the current account deficit is lower than it was during the same period of last year - in September it was 535,5 m euros, compared to 541,8 m euro in September 2007. The difference is probably due to the falling oil prices, which slow down the import rates.
In September, the foreign investments in Bulgaria's economy amounted to 327 m euro, whereas last September they were 332 million euro, and the reserve of the national bank increased by 300 m euro.However, the inflow of fresh capitals in the economy is considerably lower - 1.08 b euro compared to 1.77 b euro last September, but it is still twice higher than the current account deficit. Of course, it should be taken into consideration that these data cover just one month and they can be influenced by various short-term factors.On the whole, the inflow of fresh capitals in the economy and the export rates growth are the main indicators for the condition of Bulgaria's economy. Those, who focus their attention only on the current account deficit, will probably find the above listed data quite encouraging, which is a big mistake. Efforts should be applied in the direction of keeping and increasing the investors' trust in Bulgaria's economy.

 

 

 

 

 

IBRD and Bulgaria sign 2 loan agreements

The Bulgarian minister of finance Plamen Oresharski and the director for the Central European and Baltic states in the World bank Orsalia Kalantzopoulos will sign two loan agreements between Bulgaria and the International bank for reconstruction and development (IBRD). The agreements are for a Second loan for development of institutional reforms policies in the social sectors (DPL2) and under Social inclusion project (SIP). Both loans are part of the agreed in 2006 Strategy for partnership of the World bank with Bulgaria in the period 2006-2009. The ceremony will be attended also by the minister of labour and social policy Emilia Maslarova.

The automobile industry is preparing for protests

Protests are expected today in the automobile industry. Reason for the discontent is the price of fuels in the country in comparison to the prices in Europe.The industry expects the Consumer protection commission to announce its decision whether or not there is a cartel agreement on prices.According to transporters, the current price of diesel is ungrounded.The Economy Ministry claims that this is not true and points out that fuel prices in the country and Europe are published everyday on the department's site.

Industry Watch: Household wealth growth slows down

Bulgarian household wealth amounted to 33.5 bln leva as at the end of the third quarter of 2008, a survey, conducted by Industry Watch, shows.Household wealth growth slowed down to 16%, compared 23% in the second quarter. Despite the decline, the growth rate exceeds the inflation rate in the country.The net financial wealth, which excludes households' debts to banks stood at 23.3 bln leva as at the end of September 2008. The net financial growth has slowed down even more as the credit expansion continues to outpace the savings. The household wealth has grown by 10% compared to the third quarter of 2007, the data showed.Household wealth includes financial assets and real estate properties, cash, bank deposits, government securities, shares and assets under management in mutual funds pension and life insurance products. It does not include cash in foreign currency, deposits in banks abroad and investments in foreign stock exchanges. The share of deposits as part of the household wealth rose by nearly 5 percentage points compared to the third quarter of 2007, which means that more people prefer banks. The share of investments in equities shrunk from 5.6% to 2.4%, which may be put down mainly to the capital markets' slump.Deposits accounted for 88% of household wealth as at the end of September 2008, while the 28-percent year-on-year growth in the third quarter remains relatively high.Bulgarian households are expected to be less affected by the crisis. A comparison between the assets in Bulgaria and the euro area shows that Bulgarians have only 12% of their assets in speculative instruments and the remaining 88% are held in deposits and cash. Investments in equities and mutual funds in the euro area were seven and ten times higher, respectively.

 

 

 

Bulgarians capital amounts to 181 billion

The total amount of the Bulgarians’ financial resource is 181 billion, an enquiry of the Industry Watch shows, a 150 billion of which is the value of personal estates. The rest of the Bulgarian’s riches consists of deposits, stocks, funds and lifeinsurance, The 24 Chasa Daily reported. Unseen dives of market indexes marked the trade on BSE yesterday, the Pari Daily informs. Mass sell offs caused the broad BG40 index to dive under its base level of 100 points. This returned the index back to the days of its introduction on BSE and its last session under the base level of 100 was on February 7th 2005. BG40 registered its largest daily fall in its history and SOFIX r3egistered its fifth largest daily reduction. Yesterday SOFIX lost 10,74% to 322,60 points. The raging financial crisis managed to erase the trust in capital markets. Since October 20th till yesterday SOFIX lost 47,8%, BG40 lost 41,9%.

BGN 50 M inter-firm indebtedness in Bulgaria

The inter-firm indebtedness in Bulgaria has reached 50 billion levs. This is the biggest danger for Bulgarian business in the conditions of a crisis, the chair of the Bulgarian commerce-industry palace Bozhidar Bojinov said."The internal indebtedness - nowhere is it written how much it is". A lot of companies will go bankrupt momentarily, Bozhinov considers.He also forecasted that the crisis will force employers to restrict social spending for workers as well.

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTMENTS:

 

Austria's EVN plans to invest over € 200 M in wind farms in SEE in next 2 years

Austrian power utility EVN said it plans to invest over 200 million euro ($254 million) in wind farm projects in Bulgaria, Romania and Macedonia in the next two years. "The group's expectations are to develop in mid-terms wind generated energy projects in the region at total capacity over 100 megawatts (MW)," a company statement quoted EVN head for southeast Europe (SEE), Stefan Szyszkowitz, as telling a recent seminar on investment opportunities in SEE. The statement was made available to SeeNews on Tuesday. EVN, through its Bulgarian subsidiary Naturkraft, is already working on a wind farm project with a 40-50 MW capacity in the region of Varna, on the Black Sea, Szyszkowitz said."The investments needed for the construction of wind farms in Bulgaria, Republic of Macedonia (FYROM) and Romania are estimated at more than 200 million euro," Szyszkowitz said. In Bulgaria where EVN operates as a electricity distributor supplying some 1.6 million customers, the company is also interested in becoming an investor in the construction of a long-delayed hydropower cascade on the Gorna Arda river, and in a project for a coal-fired power plant, running water supply systems and building wastewater treatment plants. In Macedonia, EVN serves 720,000 customers as an electricity distributor. EVN's combined investments so far in Macedonia and Bulgaria are estimated at 550 million euro. In SEE, the company is also active in Albania where it will build a 48 MW power plant, Ashta, on the river Drin, jointly with Austrian electricity producing and transporting company Verbund. The project costs 160 million euro.

Omani group interested in investing in Bulgarian tourism & agriculture

The Arab businessman Adile al-Shanfar, who is vice-president of the situated in Oman holding company “Al Shanfari Group”, will investigate the opportunities for investment in the field of agriculture and tourism in Bulgaria. This was announced after a working meeting between Shanfar and the mayor of the Bulgarian town of Pleven Nayden Zelenogorski.The company has interests in the field of energy, oil industry, tourism, trade, technologies, transport, automobiles, real estate management.Representatives of the Omani enterprise are in Bulgaria for the first time.The two countries have perspectives for cooperation both in the field of business and of education and health care, said Shanfar during the meeting. He stressed that at least 5000 students from Oman could study in Bulgarian universities. As a hurdle for the realization of joint projects, the Omani representatives pointed out the heavy Bulgarian visa regime.The specific parameters of the future investment of the company in the Region of Pleven will be defined in the next visit of the Omani delegation in the town when a meeting with representatives of the industrial and trade chamber of Pleven will be held.

 

 

 

€ 80 M to be invested in roads along Greek-Bulgarian border

"Parallel to the nine North-South roads which will link the border municipalities in the Rhodope Mountains with Northern Greece across the whole length of the common border over the next four to five years, a second project is under implementation," Bulgarian Deputy Development and Public Works Minister Dimcho Mihalevski said in Xanthi on Tuesday. The West-East Gotse Delchev - Dospat - Devin - Pamporovo - Smolyan - Kurdjali - Kroumovgrad - Ivailovgrad road is being improved as well, to the benefit of the mountain population. The project costs around 80 million euro, of which 30 million are subject of negotiations between Bulgaria and Greece for alliocation by the Hellenic Plan for the Economic Reconstruction of the Balkans, and the rest will come from the Regional Development Operational Programme. Road construction will begin in the second half of 2009 and is scheduled for completion by 2011.

Hamberger invests BGN 10 M in Sevlievo

Hamberger, WC seats manufacturer, has invested over BGN 10 million in the new extension of the plant in Sevlievo, which will be officially opened in the beginning of December in the presence of the owner Peter Hamberger. It is situated on 5,000 sq. m and has 200 employees. For the first nine months of 2008, the company has produced over 2 million articles and the plans are by 2010 the production to reach 7 million per year.

Financial crisis to shift Austrian investments in Bulgaria to manufacturing

 

The global financial crisis is likely to cause Austrian investors in Bulgaria to withdraw from the real estate sector, and to shift their focus to investments in production facilities and logistics.This prognosis was made by Dr. Michael Angerer, the Commercial Counselor at Austria's Embassy in Bulgaria`s capital Sofia, in an interview for Novinite.com.Dr. Angerer also stated that the Bulgaria`s construction would be one of the sectors hit hardest by the effects of the global financial crisis, and that the negative developments could already be felt, including in the decreased demand for construction materials.The Commercial Counselor at the Austrian Embassy pointed out that Bulgaria stood a fair chance of mitigating the negative effects of the global financial crisis by concentrating on building transport and environmental infrastructure, training its labor force, and increasing its economic efficiency. In his words, much of these projects could be realized through the utilization of EU funds.

Saubermacher invests € 9 M in ecoinfrastructure

"Saubermacher Bulgaria" will invest over 9 million Euro in the construction of modern infrastructure for waste collection in the Sofia residential districts "Mladost", "Lyulin", "Ovcha Kupel", "Vitosha" and "Triadica", manager Stanimir Dobrev announced. The company won a municipal competition for the cleaning of the five districts and starts work on March 1 next year.The new executor of the waste collection in the five Sofia districts will invest in modern and hygienic waste containers, as well as the construction of islands, on which the containers will be placed. The company, which is a subsidiary of the Austrian firm, has already purchased 60 specialized automobiles and cleaning trucks, the renewal of 35000 containers is forthcoming.According to Stanimir Dobrev, at certain locations in the districts the frequency of waste collection will be increased, while at other collections - decreased. The company promises to create 500 new work places, while a long-term goal for the investors is the construction of a waste disposal factory and production of alternative fuels in Sofia.

Bourgasgas invests € 5 M  in gas distribution network in 2009

Bourgasgas will invest 5 million euro in a new gas distribution network in Southeast Bulgaria in 2009, announced the executive director of the company Zlatin Dimov. The places to benefit the most from this decision are the Black sea resorts of Nessebar and Sunny beach. Meanwhile the construction of gas supply road on the territory of Aytos and Karnobat will continue. Till now a thousand meters of gas distribution network have been constructed in Karnobat. This will provide for the gasification of all municipal objects in the town by the end of the year. From the beginning of November 2008 the merger between “Gas supply – Stara Zagora”, “Gas supply – Nova Zagora”,“Yambolgas” and “Bourgasgas” in a joint enterprise “Bourgasgas” is a fact. The aim of the merger is the optimization of the work process, lower prime cost of the gasification service and better price for the clients of Southeast Bulgaria.

Swiss company to build plant in Pernik

Silcotech Swiss silicone molders manufacturer turned the first sod of a plant for silicone parts in the town of Pernik near Sofia. The company has bought 5,000 sq. m area in the industrial zone of the town. The investment will be for BGN 2 million and the construction will take nine months. The plant will produce membranes, baby's pacifiers etc. and will open 50 working positions. The annual turnover of Silcotech is EUR 25 million.

Netherlands transport company shows interest in Svilengrad industrial zone

 

Van Dijk Transport B.V. of the Netherlands is planning to build its own logistics facilities in the future industrial zone near Svilengrad, the municipal administration said. The Confederation of Employers and Industrialists in Bulgaria has also registered investor interest.Svilengrad is one of 24 municipalities which won Phare financing for projects for setting up industrial zones. The Ministry of Regional Development and Public Works has approved the schematic designs for roads and utilities and has set a date for a tender for a contractor.The municipality will absorb 2.5 million leva under the Phare Programme. The industrial zone with an area of 102,000 square metres will be located 500 metres off the Maritsa Motorway. The local authorities paid 250,000 leva in municipal funds to the Agriculture Ministry for 93,000 sq m of land, which was formerlyan agricultural airfield.

Vinprom Peshtera invests € 2.5 M in plant

Vinprom Peshtera is among the few companies that continue to invest in new technologies and vineyards, the executive director Ivan Papazov said on the ceremony for the opening of the third plant of the company for production of spirits. It is built following all European standards in the branch and the total investment is over EUR 2.5 million. The bottling lines are imported from Italy. The profit is reinvested in the business.

 

 

COMPANIES:

 

Kozlodui power station with BGN 30.4М profit

Kozlodui atomic power station reimbursed its credit to Russian Roseksimbank before the due term, the company announced. The credit amounted to USD 52.5 million and was used for the modernisation of fifth and sixth units. This financial operation brought BGN 7.7 million positive rate difference and saved interests till 2021 amounting at BGN 22.8 million. The profit for the power station is BGN 30.4 million.

IAEA writes a positive report on Kozloduy Nuke

The International Atomic Energy Agency (IAEA) has A-graded the functioning units 5 and 6 of Bulgaria's nuclear power station in Kozloduy. The preliminary report of the Agency mission assesses highly the safety of the reactors. During the last ten days the IAEA have carried out an inspection of the two units. The report was commissioned by the Nuclear Regulatory Agency (Bulgaria.) The aim was to assess the results of the nuke's modernization worth over USD 500 million. The repair works were done in compliance with the IAEA recommendations. Within two weeks, the team of the IAEA will sum up the results in an official report that will be submitted to the NRA, said Ivan Genov, Director of the Kozloduy NPP.     

 

Italian-Chinese tie-in inks FGD unit contract at Maritsa East 2

Chinese company Insigma Group and Italian Idreco have sealed a contract to build flue gas desulphurisation installation at units 5 and 6 of the country’s biggest coal-fired power plant, the state-owned Maritsa East 2, reported Chine Business Daily News.The EUR 85.6 million project will be bankrolled by a EUR 34 million loan from the European Bank for Reconstruction and Development and a EUR 36.1 million aid under the EU’s Ispa pre-accession programme.The selection may be challenged by the other bidders, Polish Rafako and the Italian division of French company Alstom Power.Alstom told Maritsa East 2 in the summer it had launched legal proceedings against Insigma Group for planning to use in Bulgaria a technology it had been licenced to use exclusively in Singapore.The court will rule on the dispute in the spring of 2009. If it decides in its favour, the French company is ready to follow up with the Bulgarian court.The Italian-Chinese consortium was assigned the contract in a second procedure after the first failed due to the exorbitant price offered by Alstom, Austrian Energy & Environment and Rafako.The construction of the FGD equipment is more than a year behind schedule and is unlikely to meet the 2010 deadline.

Five firms willing to heal Kremikovtzi

The Bulgarian government may have fretted over the fate of troubled steel mill in the heat of the global economic crisis, but now there are five offers on the table, said deputy economy and energy minister Nina Radeva. Candidates have expressed interest in supplying raw materials, signing a tolling agreement or operating the plant. Some of them wrote straight to Prime Minister Sergei Stanishev. The prospective suitors are Ukrainian Smart Group of billionaire Rinat Akhmetov, a tie-up between Czech investment company ML Moran and consultancy A.T.Kearney, Valentin Zahariev, who owns local lead and zinc smelter OCK, Russian company Prominvest and a raw material supplier which wished to be unnamed. Talks are most advanced with the Ukrainian canidate and the consortium. Late on Tuesday Smart Group offered in a letter addressed to Mr Stanishev to help the state draw up a rescue plan for Kremikovtzi, restructure the plant’s debts, coordinate investment and social committments and sort out ecological and licencing issues. ML Moran and A.T.Kearney directors arrived in Bulgaria yesterday to meet with Mr Stanishev. ML Moran has helped bring back on track Czech company Vitkovic and sell it to Russia’s Evraz, one of the world’s steel and mining majors. The tie-in says a business strategy should be drafted to resume operations at the mill. The company’s debts should be restructured and and a revolving credit line should be given for operating cash. Prominvest and the unnamed candidate are willing to supply raw materials to the mill. Valentin Zahariev’s offer has not been revealed to the public yet, and he has not been invited to talks either. A ministry source speaking on condition of anonymity said Economy Minister Petar Dimitrov has spoken to prospective Brazilian suitors during his visit to Latin America.

Low-Cost carrier Germanwings expects at least 5 % increase in passengers to Bulgaria in 2009

Lufthansa's low-cost airline Germanwings projects an increase of at least 5.0% in the number of passengers it carries to Bulgaria next year, from more than 30,000 passengers expected in 2008, the company's PR manager said on Wednesday. We moved from 81.5% [passenger load factor in flights to Bulgaria in 2007] to 83% [this year] and our minimum expectation is to have in general 85%," Germanwings' public relations international manager, Andreas Engel, told reporters.The company entered the Bulgarian market in March 2007. It flies to the capital Sofia and the Black Sea ports of Varna and Burgas.Engel said the company sees its operations growing in Bulgaria despite the global crisis, adding that Germanwings expects business people, one of its target groups, to switch to low-cost carriers due to cost cuts. In April next year we [...] will have to decide whether to increase our number of flights or maybe look to another city," he added.Germanwings, set up in 2002, operates flights to over 60 destinations across Europe with a fleet of 25 planes. In southeast Europe, it flies to Romania, Serbia, Croatia, Bosnia, Macedonia, Albania and Kosovo.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GLOBAL FINANCIAL CRISIS ANALYSIS AND NEWS:

 

 

Bulgaria second largest steel maker takes forced vacation due to global crisis

 

Beginning December 1, Bulgaria's second largest steel mill of the company "Stomana Industry" in the town of Pernik is temporarily discontinuing its production, the company's Executive Director Emil Zhivkov reported on Monday.The forced vacation comes as a result of the global financial crisis in the metallurgy sector world wide.The steel workers, who have not yet used their paid annual leave are going to stay home in December while those without remaining leave would work on some basic renovations of the company's equipment."Stomana Industry" is going to complete all its orders by the end of November. The company has not received any orders for December.Measures undertaken by the company's management aimed to reduce the crisis' negative effects include the suspension of all capital projects, and of the supply of spare parts for the company as well as the discharge of 300 workers, who have agreed to leave and would receive monetary compensations.

 

Bulgaria's railways to sack workers over effects of financial crisis

 

Bulgaria's Transport Minister Petar Mutafchiev stated Thursday the state-owned railway companies BDZ and "Railway Infrastructure" had to optimize their staff because their freights had dropped by 20%.Mutafchiev said the negative trend had to do with the consequences of the global financial crisis but he did not specify how many of the railway staff would be sacked.According to the Minister, however, the reduced staff might turn out to be a problem in 2009 when he expects the freight volume would go up again. That is why, in his words, the redundancies had to be a minimal number.

 

Financial crisis hampers sale of Bulgaria Defense Ministry real estate property

 

About half of all military real estate property tenders have failed due to lack of investors' interest, the Bulgarian Defense Minister Nikolay Tsonev announced on Monday during a discussion about the 2009 State budget.Tsonev was, however, firm that the practice of exchanging military real estate property would not be reinstated.15 out of a total of 30 tenders of properties belonging to the Bulgarian Defense Ministry did not have any interested candidates and have been canceled, the Minister explained, adding that he was quite pessimistic about any possible future sale of those properties due to the effects of the global financial crisis.Tsonev further said that he hoped that the failure of those tenders would not have a negative effect on his Ministry's social program.1,99% of Bulgaria's Gross Domestic Product (GDP) are slated for the Defense Ministry. The Ministry's planed budget, including the sale of the real estate properties is for over 2% of the GDP.

 

 

 

 

 

 

Projects south of Burgas for € 350 M suspended

Construction investment programmes for a total value of 360 million Euro have been temporarily suspended because of the economic crisis. This relates to objects south of Burgas, concerning the tourist towns of Sozopol, Primorsko, Tzarevo, Ahtopol as well as the nearby camps in-between them.Investors have suspended the financing, which means that a new wave of construction workers will go on the market, while the firms in the industry will continue to have serious liquidity difficulties.Six village settlements, three apartment complexes, hundreds of new buildings, as well as 12 hotels in construction have temporarily suspended all activity.This does not include the highly publicized project of the businessman and owner of PFC "Levski" Todor Batkov, which planned the construction of a small town for nearly 20 000 people south of Kraimorie near the sea strip.It was announced that this investment is for the amount of 450 million Euro. It would have opened temporary and permanent work places. Because of the raging crisis and the decrease of the flow of foreign investment, however, this project is also postponed for the future.

Bulgaria's Building sector to survive the global financial crisis

Undeniably, the global financial crisis will have a negative effect on the building market in Bulgaria, but its consequences will be far from fatal. As the buyers developed a distinguished taste for high-quality buildings, the investors who fail to match these higher standards will be most affected by the crisis. The already financed projects and those which are almost implemented will hardly be directly affected by the negative tendencies on the world markets, but these which have been partially financed will definitely experience some difficulties, as the Western and the local banks have become more reserved to granting loans. Generally speaking, Bulgaria will overcome the global credit crunch almost unaffected, because a stable growth in the country's GDP is expected. At the same time, the real property market in Bulgaria will cool down and the growth in the sector will become slower, following a decrease in the demand. The reason for the lower demand is that the access to house loans in the poorest EU member state has already become more difficult. The positive aspect of the slowdown in Bulgaria's construction sector caused by the global financial crisis is that the investors and municipal authorities will be able to catch up with the building of infrastructure and facilities. The new homers now pay more attention to the details - they tend to prefer high-quality engineering and friendly neighbors.

Malls construction breaks off over world crisis

 

The world financial crisis makes investors shelve plans to erect malls and skyscrapers in Sofia as big construction projects prove to be no more cost-effective. "There were many ground-breaking ceremonies but the projects have been frozen now," Chief Architect of Sofia Petar Dikov said. He gave the enormous retail complex in the Todor Kableshkov Boulevard as an example. Its excavation works were completed only recently. Sofia Acropolis complex, which was supposed to spread over 20 hectares and absorb a 500-million-euro investment from a Lithuanian company, will also never be built. Sofia will hardly be looking like Manhattan soon, as the ten projects for skyscrapers construction have been put on hold. The land plot intended for one of them - a ninety metres tall giant that was supposed to stand right behind Sofia's Central Railway Station is being sold out.

 

Food industry may steer clear of crisis

The food sector is shaping up as one of the industries which might escape with minor injuries from the global financial fallout and the stagnation it spawned, said exhibitors at the fifth Meatmania, the World of Milk, Bulpek, Salon de Vin, and Interfood and Drink trade shows, which opened in Sofia yesterday. „In times of crisis people are buying fewer homes, furniture and household appliances but are stepping up food consumption. Therefore most companies of the industry are not expecting slowdown,” said Kostadin Chorbadjiiski, chairman of the local association of meet processing firms. „We expected some 30% rise in meat products sales in spite of the summer price increase,” said Yordan Babukchiev, chief technologist of Ruse-based pig breeder Golyamo Vranevo Invest, one of a handful of companies with a full production cycle. Wine and dairy company managers were mixed in their forecasts for the year. Mihail Tachev, who chairs the Association of Dairy Processors in Bulgaria and owns local dairy farm Old Liben, ruled out any sharp decline in sales. But Kondov Ecoproduction owner Ognyan Kondov said sales of some luxury cheeses may drop by up to 25%. Big exporters are also bracing for a tough year. Cheese exports will fall to 800,000-900,000 tonnes from some 1,500 tonnes last year, said LB Bulgaricum executive director Hristo Yungarev, and added the company will not curtail investment plans despite the crisis. It is completing two blue vein and spread cheese projects. The major challenges before the industry is the absence of a state policy and the scanty raw material supply, according to Tachev. Winemakes, which sell almost 80% of their produce abroad, are facing a 20% drop in exports for 2008 due to the stagnated Russian market, said National Vine and Wine Chamber chairman Plamen Mollov.

PC market in Bulgaria grows despite global credit crunch

The Bulgarian PC market continued to grow strongly in the third quarter of 2008, the number of units sold jumping 72.6 per cent and sales revenue 44.6 per cent higher than in the same period of 2007, the latest data from industry analysts IDC showed on November 19.Notebooks posted the fastest growth in July-September, with shipments up 117.0 per cent year-on-year to account for 57.4 per cent of the total PC market, IDC said. The number of desktop computers sold in the country was 36 per cent higher, while deliveries of x86 servers added 15.8 per cent year-on-year."Although notebooks continue to drive the PC market, we registered increasing demand for desktop PCs by home users, and this means it will continue," IDC Bulgaria research analyst Evelin Stoev said. "The growth of ultra low-cost notebooks is the second important trend in the third quarter and, up to now, their increase has not been at the expense of traditional notebooks."Asus, Acer, and HP were the leading manufacturers in Bulgaria, accounting for almost 40 per cent of total shipments."The financial crisis will have an impact on PC spending in Bulgaria in the fourth quarter," Stoev said. "However, it will mainly affect demand for commercial PCs from the financial, manufacturing, and construction sectors, while verticals like the Government and telecoms are unlikely to cut spending."

 

 

 

 

 

 

Crisis spills over to software companies

The Bulgarian software sector was the next to catch the global financial contagion with companies taking the axe on workforce, bonuses, business trips and Christmas holidays.However, none of the market players owned up to the trouble and some managers were even optimistic.The Bulgarian office of U.S. software giant Microsoft said they were quite busy and did not need to consider lay-offs.The company is optimising costs by reducing business trips and replacing them by video conferences as well as using green technologies to cut power bills.“In the face of a crisis we are shifting our focus. We see our role in helping customers optimise costs and spend less, and, on the other hand, increase revenues by improving customer service,” said Microsoft Bulgaria general manager Ognyan Kiryakov.He said this is the right time to invest in IT while squeezing IT spending would be the gravest mistake.Yet other manufacturers think recession is not the right time to buy software.“Software is not a basic commodity. Installing big systems is a long process and companies do not dare go down this road at the moment,” commented Ognyan Trayanov, president of Bulgarian software company TechnoLogica.Times are tough for Bulgaria’s exporters, which have already delayed projects, especially those selling on markets hit by the crisis, Trayanov said.In the worst-case scenario, large-scale corporations will cross out Bulgarian investments and even dry out local divisions to rescue parent companies, according to Trayanov.Public projects and EU funding will help Bulgarian software providers weather the crisis by playing the role of a reliable source of income.TechnoLogica also plans to reconsider its investment plans despite sticking by a strategy to grow into Serbia, Macedonia, and Bosnia and Herzegovina.The 100% foreign-owned companies with nothing but RnD centres in Bulgaria will be the first to fall victim to the global financial downturn, forecast Sirma Group executive director Tsvetan Aleksiev, adding that also under threat are pure outsourcing companies and start-ups.The group, which comprises 14 companies, is faring well at the moment and does not need to streamline operations by cost and staff cuts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Can Bulgaria cope with the financial crisis?

Authors: Kerin Hope and Theodor Troev, Financial Times

 

There are warning signals everywhere, yet the European Union’s poorest member insists it can weather the global financial crisis.Standard and Poor’s last month downgraded Bulgaria’s long-term debt to BBB. Fitch this month cut its rating to BBB- – just one notch above junk bond status.On Friday, the Bulgarian Industrial Association urged the finance ministry to redraft next year’s budget and cut the growth forecast from 4.7 per cent to 2 per cent of gross domestic product.“We are witnessing an unprecedented global crisis ... for the first time, the tensions in Bulgaria’s economy are caused not by internal but by foreign factors,” the association said.However, Plamen Oresharski, the finance minister, rejects a suggestion that after bail-outs of Hungary and Ukraine by the International Monetary Fund, Bulgaria may be among the next in line.“We are not in a similar position. Our banking system looks sound, with a good level of liquidity and healthy reserves,” he said. “Our concerns about the real economy are greater, but we still expect comparatively strong growth next year.”Thanks to a record grain harvest, the economy is projected to expand this year by 6.9 per cent.But the current account deficit – the highest in south-east Europe at about 24 per cent of GDP – appears unsustainable given an accelerating decline in foreign direct investment.Investment inflows fell 48 per cent in the third quarter, according to central bank figures, following the collapse of a holiday-home construction bubble and a freeze on transfers by eurozone banks to their Bulgarian subsidiaries.“Construction has been the most important growth driver, even more than in Spain, so the outlook is grave,” said Lubomir Christoff, a former chief economist at the central bank.Sergey Stanishev, prime minister, has suggested Bulgaria should join the EU’s exchange rate mechanism next year. But although Bulgaria can point to a budget surplus and a low public debt (about 18 per cent of GDP), an annual inflation rate above 10 per cent rules out any chance of an early entry to the euro.Mr Oresharski argues that an accumulated fiscal surplus of Lev12bn ($7.8bn, €6.2bn, £5.2bn) provides a cushion.“One relief is that the government doesn’t have any short-term borrowing requirements,” he said.In spite of rapid credit expansion since EU accession last year, total bank indebtedness is still low at about 30 per of GDP.Lending is tight because foreign banks have lost access to funding from parent groups squeezed by the global credit crunch.“We’ve been told to rely on our own resources, which means lending will slow,” said a senior executive at a foreign-owned bank.Bulgaria’s currency board, which pegs the lev to the euro, is intended to eliminate foreign exchange risk. The arrangement also requires that money in circulation does not exceed central bank reserves.With reserves at 180 per cent of currency in circulation, the lev was buttressed against an all-out attack on the currency board, Mr Oresharski said.But other currency boards in the Baltics look less stable following Latvia’s request last week for EU help to fend off a crisis.

 

 

 

 

 

 

 

 

 

 

"We аspire to overcome Bulgaria's negative image in EU" PM tells OLAF director general

"We aspire to overcome Bulgaria's negative image in the EU," Bulgarian Prime Minister Sergei Stanishev told European Anti-Fraud Office (OLAF) Director General Franz-Hermann Bruenner, quoted by the Government Information Service on Thursday. Bruenner is paying a one-day official visit here at the invitation of Meglena Plougchieva, Deputy Prime Minister in charge of EU funds management."I highly appreciate the open dialogue and cooperation with OLAF," Stanishev told the guest. The two declared themselves in favour of more tangible results, real convictions for abuse of EU funds, and more effective communication among the institutions engaged in the fight against irregularities in the absorption of EU funds."The problems of absorption of EU funds are discussed regularly at the highest level, the topic is subject to a broad public debate in this country and cannot be evaded by any political actor," the Prime Minister said."We aspire to achieve everything set in the Government's action plan and to overcome this country's negative image which has been deliberately projected in recent months," Stanishev said.The Government will sustain its pressure for improved transparency and effective prevention of the abuse of EU funds. The PM noted that the Government is taking a constructive approach to the reports from the European Commission under the Cooperation and Verification Mechanism. "We have a lot more to learn as a EU Member State, but we must mitigate the adverse effect of our country's bad image, and we will spare no effort to achieve it," the Prime Minister assured his guest. "We will be working even harder and in close cooperation with OLAF, as well as with all institutions concerned, so as to achieve more tangible results at all levels," he added.It is very important that the efforts to address shortcomings in the absorption of EU funds be sustained and that what has been done in recent months continue in future, the OLAF Director General told the PM. He argued for the need of a common approach to the work of all units engaged in the fight against the abuse of EU funds. What is important is not just to try to resolve the crisis with the absorption of EU funds but to address the problems, the guest noted. "What we are doing at the moment prevents future problems in the long term," he added.Stanishev and Bruener share the view that unless the judiciary realizes its responsibility and real convictions are not secured at this critical moment, the achievements so far may come under a question mark. "We don't mean that particular persons must be convicted," Bruener said, adding that real convictions are needed and progress must be demonstrated in this respect.Sustaining the effort in the coming months is of key importance, the PM and the OLAF Director General agreed. The situation is understood at the political level, but a stronger support for these efforts is needed as well, the principal objective being to achieve results that people can see. According to Bruener, this is also a matter of political decision.The sides noted the need for support to the work of the State Agency for National Security and the task forces which handle abuse of EU funds. The OLAF Director General was highly appreciative of the performance of the task forces and the OLAF contact units at the institutions engaged in the absorption of EU funds.Miglena Plougchieva, too, should play a more visible role as a Deputy Prime Minister who does not simply manage the process of EU funds absorption but sets up structures and initiates practices which will have a sustained positive effect in future, too, Bruener said.The two commended the performance of the Deputy PM, especially in respect of organizing and coordinating the prevention of the abuse of EU funds, the press release says.Things are moving in the right direction, and it is very important to take account of the situation, the way it was at the beginning, and what has been achieved so far, Bruener told Stanishev.The Bulgarian administration is trying very hard to address the problems of EU funds absorption, there have been numerous changes in various agencies, and the first results are already there, Bruener told a news conference he gave at the Council of Ministers after conferring with Stanishev and Plougchieva."We all will be actively safeguarding the European money," the guest noted. His talks here have been very constructive. The sides have drawn up a working programme for the next three months. "We saw that something has stirred here. We discussed in great detail what we should do in future," he added. "A lot of things have been done, but a lot have not been done properly and a lot of money has landed in the wrong hands," Bruener said.During his visit, the OLAF Director General familiarized himself with the operation of the Supreme Judicial Council (SJC), the Council said. The participants in the meeting focussed on the measures taken by the SJC for control and reporting of the cases involving abuse of EU funds. SJC International Legal Cooperation Commission Chairman Ivan Dimov presented to Bruener the in-depth work of the Council on cases of great public interest, a large part of which are investigated by OLAF. He stressed that the most important task facing the SJC members is to standardize case law on these cases, which will help reduce the risk of exerting influence when they are decided.SJC member Anelia Mingova noted that OLAF's recommendations and views are identical with the intentions, efforts and specific steps that the Council is already taking.