불가리아 경제뉴스 ( 9 – 16 JANUARY 2009 )

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT ( 9 – 16 JANUARY 2009 )

 

 

 

Sections/headline briefs:

 

 

MACROECONOMY:

 

·        Industry sinks

·        GDP growth may slow by 1 pp on back of gas crisis

·        Bulgarian industry loses BGN 90 million in a week over gas crisis

·        Bulgaria appeals to Greece for gas supply

·        Bulgarian industrial production falls most in six years

·        Bulgaria discusses Nabucco in Budapest

·        Gazprom eyes Bulgaria’s gas deposit project

·        Bulgaria's neighbors are power-hungry

·        Bulgarian MPs want to restart NPP Kozloduy's reactors

·        Bulgaria's construction activity down by 15% in November 2008

·        Biofuel makers push natural gas alternative

·        Bulgaria to slate over EUR 71M for employment promotion

·        The business demands energy guarantees from the government

·        Bulgarian parliament holds extraordinary meeting over gas crisis

·        French ambassador promises to help Bulgaria diversify energy sources

·        All of Bulgaria's heating utilities switch to oil over gas shortage

·        Two more EU countries lift labour restrictions on Bulgarians

·        Trakia highway tenders under question

·        Bulgaria auto market yields to credit crunch

·        Millstones for insurance sector

·        Official statistics reports 0.2% deflation in December 2008

·        Bulgaria's trade deficit declines in November

·        Quest Bulgaria: Country now has 10 000 millionaires

·        Heritage Foundation: Bulgaria economy more free but not quite there yet

·        Government earmarks € 204.5 М to support economic growth

·        Second session of joint Bulgarian-Iranian transport commission concludes

·        22% increase of salaries in 2008

·        Bulgaria could get back frozen EU funds

 

 

 

INVESTMENTS:

 

·        Dr. Stoyan Stalev, IBA executive director: we could attract EUR 5 billion of foreign investments

·        Sopharma continues to invest at slower rate

·        Multi-level parking lots to be built in central Plovdiv

·        Simprolit BG invests € 3 M in new plant

• Bulgarian firm to spend €1.3 M to prospect for molybdenum

·        Turkish company invests € 20 М in Bankso

·        Technopolis builds third hypermarket in Bulgaria's capital Sofia

 

 

 

COMPANIES:

 

·        Italian firm to bring gas to Bulgarian Velingrad

·        Bulgarian company launches coffee chain

·        Gas crisis scares potential buyers of Kremikovtsi

·        Piccadilly to open 20 corner shops in Sofia

·        "Orgahim" to open new work places

·        BTC and Vivatel merger completed

 

 

 

GLOBAL FINANCIAL CRISIS ANALYSIS AND NEWS:

 

·        Bulgaria's Kurdzhali sets up committee to fight global financial crisis effects

·        Bulgaria's Svilosa shelves €250 M  paper plant project over global crisis

·        Not all firms will survive the crisis

 

 

 

 

 

Articles:

 

 

MACROECONOMY:

 

 

Industry sinks

 

In the freezing days of halted supplies of Russian gas to Europe and Bulgarian in particular, chilling macroeconomic news showed that the global economic crisis is far from over. Almost all European economies, the US and Bulgaria published what analysts dubbed catastrophic, fatal and disastrous data. Industrial production in Europe plummeted by a record amount in November and in Bulgaria it was down by 5% on the month and 8.8% on the year. The consensus among analysts polled by Dnevnik is that the country’s gross domestic product will grow by no more than 2% this year. News agency Bloomberg quoted Ivailo Vesselinov of investment bank Dresdner Kleinwort as saying that the economy will grow by a humble 0.8%, and recession is looming larger. The slide began back in October when industrial production fell on an annual basis. November saw double-digit drops in all benchmark sectors such as the chemical, construction and drops in all benchmark sectors such as the chemical, construction and machine building industries. only the processing industry slumped by a smaller margin of 8.8%. Industrial production in some countries even passed the 10-percent mark. Germany, which is the eurozone’s largest economy, registered a 10% decline on an annual basis. Spain reported a 15.1% decrease. In Sweden, industrial output was down by 11.9%. Most data is worse than October’s, a sign of a further deterioration. In the US, December’s job losses topped more than half a million making 2008 the worst year for the labour market since World War Two. The jobless rate hit 7.2%, the highest in 16 years.

 

GDP growth may slow by 1 pp on back of gas crisis

If the gas crisis in Bulgaria continues for more than 10 days the growth of the gross domestic product may turn out to be 1 percentage point lower than the 4.7% envisaged in the budget. This is the conclusion of some calculations made by experts outside the Economy Ministry, the deputy Minister of Economy and Energy Iavor Kuiumdzhiev said for investor.bg. Thus, only because of this crisis, without accounting for the effect of the world economic slump the Bulgarian GDP for 2009 may be 3.7%. Moreover, even before the end of last year some economists predicted GDP growth of 2-3%. Kuiumdzhiev said for investor.bg that a reduction in the projected GDP for 2009 of 1 percentage point is possible. However, after the end of the crisis the Ministry would calculate the actual losses for the Bulgarian economy based on the documents of companies that have suffered from the suspension of gas deliveries. Today is the ninth day since gas supplies to Bulgaria were stopped. By yesterday only the direct losses associated with the crisis of 368 companies in the country amounted to BGN 100 mln. Moreover, gas distributor Bulgargaz announced it would only be able to maintain the current internal supplies per day for another week. This amount satisfies 40% of the needs of the country in the winter. After that week, the pressure in the pipes will fall due to the depletion of reserves at the Chiren storage and less gas will be pumped into the network. In this respect, Iavor Kuiumdzhiev added that the metallurgy, chemicals and pharmaceutical industries will be worst hit by the lack of gas.

Bulgarian industry loses BGN 90 million in a week over gas crisis

 

In only one week Bulgarian industry lost BGN 90 million over gas shortages, data the Dnevnik Daily informed. Estimates were made after a research of 330 companies and their business for the January 6 – 12 period. It is still not clear whether losses are result of the gas shortages or the international financial crisis also has a contribution. It is possible that many companies have overstated their reports in effort to receive larger compensations later, experts explained. “Losses have been minimized after gas supplies were stopped and are now estimated at less than BGN 5 million per day”, chairman of the Bulgarian Chamber of Commerce Bozhidar Danev said. Some of the worst hit enterprises are the fertilizer producers “Agropolychim” and “Neochim”, where natural gas is used as raw material and fuel.

Bulgaria appeals to Greece for gas supply

Bulgaria asked Greece for help in the supply of natural gas.This announced late last night the Greek minister of development Kostas Hatzidakis, cited by BTA.The supplies of Russian gas for the two Balkan countries were interrupted more than two weeks ago because of the conflict between Gazprom and the transit country Ukraine.“There is an appeal for supply of natural gas from Bulgaria, which at the moment faces much bigger problems than Greece”, said to the journalists the Greek minister after a meeting with the government services on the gas problem. “We agreed with the Bulgarian side to organize a meeting on an expert level, to see how it is possible we to help cover some of the needs of Bulgaria for natural gas, because the country has problems with the gas for the households”, pointed also the Greek minister.He explained that the Greek gas supplies are possible under two condition: first, if there is no problem for Greece, and second, if purely technically this can be done.Kostas Hatzidakis assured that Greece had no problems with the natural gas till the end of January.Asked whether Greece will claim compensations from Gazprom because of the stopped supplies, the minister answered that in the contracts procedures were set for compensations and arbitration, if finally the conditions are not fulfilled.

Bulgarian industrial production falls most in six years

Bulgarian industrial production fell the most in at least six years in November, led by lower output in mining and quarrying as demand weakened because of the global economic slowdown, Bloomberg reported.Production fell 8.8 percent from a year earlier, compared with a revised 2.3 percent drop in October, the statistics office in Sofia said in a statement today. The decrease was the most since at least September 2002, according to Bloomberg data. Industrial sales shrank 11.5 percent on the year, after a revised 5.1 percent fall in October, the office added.November retail sales fell an annual 1.2 percent, after an increase of 2.8 percent the previous month, the office said in a separate release. Bulgaria, the European Union's poorest member with per-capita gross domestic product that is 37 percent of the bloc's average, is counting on investment and economic growth to help raise living standards in the former communist country. The economy expanded 6.8 percent in the third quarter, the slowest pace in three quarters, driven by consumption, investment and agriculture.

Bulgaria discusses Nabucco in Budapest

PM Sergey Stanishev will be taking part in a Budapest summit in late January, dedicated on the construction of the Nabucco gas pipeline. Bulgaria is part of the Nabucco project, represented by Bulgargas. Four other countries have joined the project so far – Hungary, Austria, Romania and Turkey. Expectations are running high that Germany’s energy giant RWE will soon join in. Nabucco’s forecasted transit capacity is 31 bcm a year. EU speeds up reforms in the energy sectorBG 166940 2009-01-13 04:19:28 Sofia. The Russian – Ukrainian gas row should be perceived as an incentive for propelling reforms in the gas sector of the European Union, FT reports. According to the issue, the EU should strongly support its Central and Eastern European members as they are almost 100% dependent on Russian gas deliveries. A possible solution to the energy dependency in this parts of the EU will be the diversification of energy sources. And with depleting North Sea reserves, ties with North Africa, the Middle East and the Caspian Region should be brought to the fore on EU’s agenda.

Gazprom eyes Bulgaria’s gas deposit project

Bulgaria’s Russian gas suppliers are interested in the gas repository Bulgaria will build in Galata, Energy Minister Petar Dimitrov said on January 9 2009. The ministry was told a year earlier that the Russian gas giant Gazprom may finance the project.The new gas deposit project came into the spotlight after the ongoing gas crisis sparked by a pricing row between Russia and Ukraine made it clear that the Chiren repository cannot meet the country’s needs.Galata field is now operated on a 25-yield concession contract by Edinburgh-headquartered Melrose Resources, which has expressed willingness to team up with state-controlled gas distributor Bulgargaz and convert it into a gas repository.Dimitrov said talks are already underway on terminating the contract with the Scottish company.By end-January or early February, Bulgaria should present the European Commission with energy projects it wants to be funded under a five billion euro climate and energy package, said Foreign Minister Ivailo Kalfin.

Bulgaria's neighbors are power-hungry

'Currently, Bulgaria is not experiencing shortage of electric power. Moreover, we export 600 MW every day and this is why we cannot request the European Comission to allow the reopening of NPP Kozloduy's power units decommissioned in compliance with the terms of Bulgaria's EU accession, motivating the request with the energy crisis,' Minister of Economy and Energy Petar Dimitrov said. However, Bulgaria's neighbors are experiencing power shortage and on these grounds we can request the reactivation of the two closed units of NPP Kozloduy. 'Because of the higher demand we increased the export of electricity to our neighbors over the past two days,' Minister Dimitrov said further. To approach the European Comission, however, we should first have the support of all countries that import electricity from Bulgaria, but one of our neighbors, also an EU member, follows firm anti-nuclear policy,' the minister said also.

 

 

 

 

 

Bulgarian MPs want to restart NPP Kozloduy's reactors

 

All fifteen members of the Energy Committee in the Bulgarian Parliament agreed on the restart of NPP Kozloduy's power units 3 and 4, which were shut down two years ago. Their proposal was supported by their colleagues from the Foreign Affairs Committee and the Committee on Energy Issues. "It is now the time to quote article 36 of Bulgaria's EU Accession treaty, which allows the restart of the nuclear reactors," MPs say.
Three independent proposals for the restart of the decommissioned facilities were heard at an extraordinary sitting of the Energy Committee. All members of the Bulgarian Parliament share the opinion that power units 3 and 4 of NPP Kozloduy meet all safety standards of the European Commission and in that they are just as good as any West European facilities of that kind. However, none of the proposals was voted. This will probably happen today, during the regular sitting of the Committee, when Economy and Energy Minister Petar Dimitrov will also be given the floor. Towards the end of the sitting, the members of the Energy Committee agreed that they should make a common proposal for the restart of the shut down reactors 3 and 4 of NPP Kozloduy. Energy Committee Chairman Ramadan Atalay says such a proposal could be voted today and put forward for discussion in Plenary Hall tomorrow. If the proposal is approved by the MPs, the Council of Ministers should order the restart of the closed nuclear facilities, but the European Commission may object such a decision.

Bulgaria's construction activity down by 15% in November 2008

Bulgaria's total construction activity declined by 14,9% in November, 2008, compared to its October levels, according to data released Friday by the National Statistical Institute (NSI). This is the first time that the NSI publishes data about its new index, which reflects the construction activity all over the country.The construction of buildings registered a 15,7% decline in November, whereas the infrastructure construction went down by 13,2%.The construction of buildings is estimated at 68% of the total construction going on in Bulgaria.Bulgaria's construction activity in November 2008 was 1% greater than it was in November 2007, according to the data. Building construction grew by 3,7%, and infrastructure construction declined by 4% compared to November 2007. Bulgaria's construction sector has already been hit hard by the effects of the global financial crisis as foreign investors started to freeze projects or to pull out, and workers have been made redundant. Yet, the NSI points out that the decline was not unusual for November because of the climate factors.

 

Biofuel makers push natural gas alternative

 

The Government should work out measures to encourage biofuels as an alternative to natural gas, the National Biofuels Association in Bulgaria said in a statement to the media. The country has enough raw materials to make its own biodiesel and bioethanol and reduce dependence on Russian gas supplies, said Miryana Misheva of the association.Last October members of the association threatened to take legal action against the state for abandoning tax incentives for the sector. However, oil products distributors said yesterday the dependence on crop and temperatures makes biofuels an unreliable energy source.“Indirect taxation now makes biofuels more expensive than fossil fuels,” said Dimitar Tortopov, fuel retail head at EKO Bulgaria petrol filling stations. Not a single thermal power plant works on biofuel because they are not an alternative to either gas or coal, Tortopov added.

Bulgaria to slate over EUR 71M for employment promotion

 

The Bulgarian state will allocate more than BGN 140 million (USD 96m/EUR 71m) to encourage employment, Labour and Social Policy Minister, Emilia Maslarova, said after a meeting with employers and trade unions. The money will go for creation of new jobs as well as for keeping current ones. The financial aid will help businesses keep employees at reduced working hours and will save 18,700 people from unemployment. Bulgaria’s unemployment rate was 6.23% in December 2008 while 6,000 people found jobs on the primary labour market in January this year. A total 3,426 Bulgarians lost their jobs last December. Over 43,000 people will join the labour market under the national action plan in January 2009. The Cabinet will vote the national employment plan on Thursday, ahead of schedule due to the financial crisis, the minister said.

The business demands energy guarantees from the government

The confederation of employers and industrialists in Bulgaria (CEIBG) and the American commerce chamber in Bulgaria call upon the government to undertake preemptive and effective alternatives in possible future energy crises.This has been put down in a joint declaration by the two organizations.The chamber and confederation, being representatives of organizations of the Bulgarian, American and international business in the country, express their serious concern by the unprecedented suspension of the natural gas deliveries for Bulgaria and other neighboring countries.The two employers'organizations insist on the quick resolution of the gas crisis, so that the losses for business are minimized and the risk of technological failures is prevented.We insist that the government produces continuous, clear, reliable and complete information to business and citizens on the available resources of natural gas, the plans for its distribution and the state of the negotiations, the declaration also points out.

Bulgarian parliament holds extraordinary meeting over gas crisis

For four hours now Parliament has been in an extraordinary meeting over the gas crisis. Prime Minister Sergei [Sergey] Stanishev reported the situation in the country and the efforts the government has made in the face of suspended Russian gas supplies. His report was followed by debates on a parliamentary declaration which are still underway. It emerged from the Prime Minister's report that the Bulgarian authorities have told the European Commission that it might have to restart one of the shutdown power units of the Kozloduy nuclear power plant if the gas crisis persists. "If the restoration of natural gas supplies is delayed, demand for electricity in Bulgaria and the neighbouring countries may go up," said Stanishev. He added that Bulgaria is now faced with an environmental issue as a result of the switch to fuel oil by many natural gas users.

 

 

 

French ambassador promises to help Bulgaria diversify energy sources

The European Commission monitors have already reached their destination points, the framework conditions of the mission's work have been signed and "there is no reason for further delay in restoration of gas supplies," the European Commission said in a statement on Sunday [ 11 January]. The monitors have reached most of the destination points and have started monitoring activities. According to EC, the monitors in Kiev were given access to the main gas distribution centre of the Ukrainian oil and gas company Naftogaz and already drafted their first report. Another team of monitors will be sent at the main gas distribution centre of the Russian Gazprom in Moscow. "The Commission considers that all conditions required by the two parties have been met and there is no reason to delay the restoration of gas supplies any further," the EC said. Economy and Energy Minister Peter Dimitrov said on his way into a meeting of the socialists' parliamentary group on Monday [12 January] that the Ukrainian gas has not yet reached the Romanian town of Isaccea from where it could reach Bulgaria within 24 hours. The price for Ukrainian supplies will be contracted on the basis of the supplied quanitites and will be within the range of what Bulgaria pays for natural gas anyway, Dimitrov said.In a separate development, French Ambassador to Bulgaria Etienne de Poncins commented that it is never good for a country to depend on one source of energy supplies only. The Ambassador was speaking at a news conference on an upcoming Embassy initiative. In his words, France has always been careful to have a well balanced mix of natural gas supplies: from Norway, Algeria and Russia. He recalled that Gas de France signed a cooperation agreement with Bulgargaz in 2008 to help the Bulgarian gas company diversify its sources and add, for example, Greece and Romania. Gas de France supplies liquefied gas to Northern Greece and it would be easy to bring it to Bulgaria is there is a 70-km connection between the gas networks of the two countries - which is very much in the interest of the French company, the diplomat commented. He said that the gas crisis showcases the EU role which, in his opinion, is much stronger now than in similar crises several years ago. Also on Monday, the Confederation of Employers and Industrialists in Bulgaria (CEIB) and the American Chamber (AmCham) issued a joint declaration calling upon the government to take anticipatory measures this year to provide reliable and effective alternatives in the event of new crises in the future. A large part of the CEIB and AmCham members are sustaining considerable losses and face long-term problems, which industrial enterprises being the worst-hit, says the declaration. The two organizations are in close contact with their members to be able to summarize the information about their needs and capacity to react. They are urging their members to document their losses. The declaration calls for strong efforts to end the gas crisis to minimize the losses for businesses and prevent industrial accidents. According to the Education Ministry, 16 schools across the country suspended classes on Monday because it was too cold in the classrooms. That figure included one school each in Sofia, Plovdiv and Vratsa, three in Pleven and ten in Dobrich. The load on the national power grid at 19:00 hrs on Sunday totalled 7,021 MWh, according to the power grid operator. It was 21 MWh more than the consumption registered at this hour on December 31.

 

 

 

All of Bulgaria's heating utilities switch to oil over gas shortage

All of the heating utility companies in Bulgarian cities are already working on oil because of the natural gas shortage which resulted from the Russia-Ukraine gas prices dispute. The public heating utility in Bulgaria's northern city of Pleven was the last to finally switch from gas to oil Monday afternoon.The Crisis Management Director at Bulgaria's Emergency Situations Ministry Atanas Saykov announced that the loading of the country's electricity network Monday night was 6 550 MW, and the electricity exports amounted to 632 MW. The network can sustain a loading of up to 7 500 MW. Saykov also announced that the extracting of natural gas at the Galata Field close to Varna was terminated briefly during the day because of a broken compressor, but had been resumed later. The Galata deposit provides about 8 100 cubic meters of gas daily. Saykov said the gas reserves at the Chiren Storage Facility had been reduced to 523 million cubic meters.

Two more EU countries lift labour restrictions on Bulgarians

The number of European Union countries without restrictions on Bulgarians and Romanians has risen to 14 after Hungary and Portugal opened their labour markets to nationals of the two Balkan countries, a media statement from the European Commission said on January 8 2009. Just before New Year's Eve, Greece and Spain did the same. Now out of 25 EU member states, only 11 remain with labour restrictions for Bulgarians and Romanians. This means that workers from Bulgaria and Romania can now move freely to 14 member states to take up employment there. Denmark, which currently imposes some restrictions, has also announced that it will stop applying restrictions for Bulgarian and Romanian workers from May 1 2009, when it will also end all restrictions for workers from the EU-8 member states that joined in 2004. All Member States that continue to restrict labour market access by applying national law can end these restrictions at any time during the second phase. In principle, full free movement of workers should apply after the end of the second phase (December 31 2011). Member states can only maintain restrictions thereafter if there is a serious disturbance (or threat thereof) to the labour market. All restrictions for workers from Bulgaria and Romania must be lifted by December 31 2013 at the very latest when full free movement of workers will apply across all 27 EU countries. The following EU countries still enforce labour restrictions on Bulgarian and Romanian citizens: Ireland, France, Italy, the UK, Luxembourg, Malta, the Netherlands, Austria, Denmark, Belgium and Germany.

Trakia highway tenders under question

The European Commission is willing to allow Road Infrastructure National Agency (RINA) to continue with the tenders for the two lots of the motorway provided that not only Bulgarian companies but also such from the European Union participate in the procedures, Pari daily learned. According to sources of the newspaper, this is one of the requirements of Brussels not to stop the funds for the rehabilitation of road infrastructure in the country. The two Austrian companies, Strabag and Alpine Bau, that took part in the tender for Lot 2 and Lot 3 of Trakia motorway, made a complaint with the European Commission as a result of which Brussels stopped the activity on election of executor for the lots, Yanko Yankov, executive director of RINA, confessed. According to sources of Pari daily, the two Austrian companies raised the question why one and the same Bulgarian companies win the public offers for rehabilitation and construction of roads in the country, envisaging Road Holding with Moststroy, Glavbolgarstroy with its subsidiaries and Trace Group Hold from Stara Zagora. Representatives of RINA are explicit on the point that there are no violations of the auction procedure but experts say that EU requirements are so unclear that Brussels may interpret them the way it wants.

Bulgaria auto market yields to credit crunch

Bulgarias automobile market expanded for a fifth successive year in 2008 but prospects are bleak, revealed data by the importers association. The local car dealers sold 57,927 new cars, trucks, buses and motorcycles in 2008 compared to 55,366 in 2007.The 4.6% year-on-year growth in 2008 was dwarfed by the 22.15% jump a year ago.The statistics does not include data by Industrial Commerce, the local Hyundai dealer. Bulgarians bought 4,211 new motor vehicles in December, which tends to be one of the busiest months. The sharp drop of over 76% on the year is due to the ongoing global financial turmoil, which postponed purchases of big-ticket items such as cars, and the more adverse bank loans and leasing requirements.Market representatives are fretting over the steep fall in car sales in tight economic conditions and the hard task of regaining the lost ground when things get better.Therefore, most dealers hope to maintain last years sales in 2009 rather than outperform. Last years statistics show that 15 companies reported worse car sales than for 2007. Opels eight local suppliers topped the market selling 5,462 vehicles, which earned them a 10.15% market share. They sold 1,000 units to the interior ministry. The runner-up was 2007s number one, Toyota Balkans, which signed 5,082 contracts capturing 9.44% of the market. The bronze went to Porsche BG with Volkswagen, which sold 4,708 vehicles.

Millstones for insurance sector

The branch generated almost BGN 1.5 billion in 2008, of them over 70% come from automobile policies. At the same time, the damages companies pay amount to 86.2% of all expenses. What is more, every year they grow more quickly than the incomes.
The reasons for that are, on one hand, the low prices of the car policies. on the other hand, prices for damages increase due to higher service prices and increased limits of liability. From 2010 insurers will run even greater risk as the limit of liability jumps five times. Another factor works against the branch is the newly accepted change in the law: traffic officers will not be called to verify light road traffic accidents (RTA) and damages on parking lots. Both parties in the RTA will sign a protocol. These changes are a step in the right direction as they are applied in Europe. Bulgaria and Romania were the only members of EU that had not introduced the two-sided protocol, Ralitsa Again, deputy chairperson of Financial Supervision Commission (FSC) commented. This is for the sake of convenience of the clients. We tried to make the documents as simple as possible. Some of the insurers are skeptical, as according to them, number of frauds will increase. Good or bad, the changes are already a fact and they have to be observed.

Official statistics reports 0.2% deflation in December 2008

December 2008 had a deflation of 0.2 per cent, the National Statistical Institute said Tuesday. The average increase of consumer prices stands at 7.8 per cent for the period between December 2007 and December 2008, and at 12.3 per cent for the period January-December 2008 compared to the same time the year before.Between November and December, prices dropped by 0.3 per cent for foods and beverages , grew by 0.2 per cent for liquor and tobacco, dropped by 0.1 per cent for clothing and shoes, and grew by 0.1 per cent for housing (rent, current improvements and maintenance) and utility services.Meanwhile, the government press service reported a two-fold hike in the minimum monthly wage for the past five years.For 2009 it is set at 240 leva, which makes an hourly pay of 1.42 leva (roughly equal to 0.70 euro) for an 8-hour work day and five-day work week. It is exactly twice as much as the minimum wage in 2004 (120 leva), the government press office said. In 2003 the like figure was 110 leva, in 2005 150 leva and in 2006 160 leva. In 2007 the minimum hourly pay crossed the 1-leva mark for the first time and was 1.07 leva or 180 leva a month. In 2008 it was increased by nearly one-fourth to 220 leva (1.30 leva an hour).

Bulgaria's trade deficit declines in November

Bulgaria's Current and Capital account deficit stood at EUR 7,211.7 million (21.2% of GDP) In the period January - November 2008, against a deficit of EUR 5,083 million (17.6% of GDP) for the same period in 2007, data of the Bulgarian National Bank (BNB) showed.In November 2008 the Current account was negative and amounted to EUR 838.2 million, compared to a negative account of EUR 752.4 million for the same month in 2007. The increase of the current account deficit was mainly due to the year on year decrease of item Income, net to a deficit of EUR 69 million in November 2008. In the period January - November 2008, the current account deficit was EUR 7,465.8 million (21.9% of GDP), against a deficit of EUR 5,362.7 million (18.6% of GDP) for the same period in 2007. Main factors for the increase of the current account deficit were the higher (by EUR 1,689 million) trade deficit and the higher (by EUR 609.9 million) income deficit.The trade deficit in January - November 2008 amounted to EUR 8,178.5 million (24% of GDP), compared to a deficit of EUR 6,489.6 million (22.5% of GDP) for the same period in 2007. In November 2008 the trade deficit amounted to EUR 747.2 million, compared to a deficit of EUR 800.7 million for the same month in 2007.Exports (FOB) amounted to EUR 14,328.7 million against EUR 12,402.4 million for the same period in 2007, increasing by 15.5% year on year against 12.4% for the same period in 2007. In November 2008 exports (FOB) amounted to EUR 1,077.6 million against EUR 1,267.9 million for the same period in 2007, decreasing by 15% year on year against a 20.9% year on year increase for the same month in 2007. Imports (FOB) amounted to EUR 22,507.3 million, against EUR 18,891.9 million for January - November period in 2007, increasing by 19.1% yoy against 19.4% for the same period in 2007. In November 2008 imports (FOB) amounted to EUR 1,824.8 million, against EUR 2,068.6 million in November 2007, decreasing by 11.8% year on year against a year on year increase of 27.7% for the same month in 2007.The balance on the Services item was positive, amounting to EUR 1,148.4 million (3.4% of GDP), against a positive balance amounting to EUR 1,157.9 million (4% of GDP) for the same period in 2007. Income (net) item was negative amounting to EUR 939.3 million compared to a negative item of EUR 329.4 million for the same period in 2007. In November 2008 the balance on the item was negative amounting to EUR 69 million compared to a positive balance of EUR 32.2 million for the same month in 2007.Net Current transfers amounted to EUR 503.7 million (1.5% of GDP) against EUR 298.5 million (1% of GDP) for the same period in 2007. In November 2008 the item Current transfers, net was negative amounting to EUR 4.9 million against a positive item of EUR 52.9 million for the same month in 2007.The Capital account balance was positive amounting to EUR 254.1 million, compared to a positive balance of EUR 279.7 million for the same period in 2007.The Financial account balance was positive amounting to EUR 10,926.1 million, compared to a positive balance of EUR 10,076.1 million for the same period in 2007.Foreign direct investment abroad was EUR 444.9 million against EUR 161.7 million for the same period in 2007. Foreign direct investment in Bulgaria was EUR 5,274.6 million (15.5% of GDP) against EUR 5,963.3 million (20.6% of GDP) for the same period in 2007. The direct investment covered 70.7% of the current account deficit against 111.2% for January - November 2007.Portfolio investment - assets increased by EUR 156.3 million, compared to a decrease of EUR 39.4 million for the same period in 2007. Portfolio investment - liabilities decreased by EUR 403.6 million. In the period January - November 2007, the liabilities decreased by EUR 278.4 million. In November 2008, the liabilities decreased by EUR 136.7 million against an increase of EUR 68.3 million in the same month of 2007.Other investment - assets decreased by EUR 597.9 million, compared to an increase of EUR 62.3 million for the same period in 2007. In November 2008 other investment - assets decreased by EUR 298 million, compared to an increase of EUR 344.6 million in the same month of 2007. Other investment - liabilities increased by EUR 6,164.3 million against an increase of EUR 4,614.1 million for January - November 2007. In November 2008 other investment - liabilities increased by EUR 442.1 million, compared to an increase of EUR 947.4 million in the same month of 2007. The item Net errors and omissions was negative, amounting to EUR 1,479.8 million. For the same period in 2007 the item was negative amounting to EUR 1,700.3 million. In November 2008 the item was positive, amounting to EUR 48.1 million against a negative item amounting to EUR 343.5 million in November 2007.The Overall balance was positive, amounting to EUR 2,234.7 million compared to a positive overall balance of EUR 3,292.9 million for the same period in 2007. In the period January - November 2008 the BNB reserve assets increased by EUR 2,234.7 million.

Quest Bulgaria: Country now has 10 000 millionaires

Despite the gloom of the global financial crisis, some people are still making money and some of them are in Bulgaria, the Bulgarian Quest Bulgaria Property Magazine reports. According to the publication, Bulgaria currently has around 10,000 millionaires. The country takes third place in the millionaire rankings within Eastern Europe, only behind Poland, the Czech Republic and Slovakia, and is in first place in terms of the number of multi-millionaires and billionaires in Eastern Europe.However, Alexander Bozhkov, the co-chairman of the Center for Economic Development says for Quest Bulgaria that there were no official statistics to measure the number of millionaires in the country in the way Forbes does in the US, adding that a Bulgarian millionaire may own property valued at EUR 50 M, but at the same time he may also owe the bank 50 M.In the publication, Bozhidar Danev, Chairman of the Bulgarian Chamber of Industry states that, "a million is not all that much and I think that 70% of the owners of construction companies in Bulgaria are millionaires as well as a large part of businessmen involved in the tourism sector." Economy expert Georgi Angelov divides Bulgarian millionaires into two groups: those fortunate enough to inherit attractively located land plots and those speculative millionaires who have made shrewd investments in sectors which have seen high economic growth.The article further points out that much of the accumulated wealth was "dirty money", looted and transferred overseas after the fall of Communism."Most Bulgarian millionaires are men with a growing number of thirty year olds... They prefer to keep out of the limelight, love expensive watches, own their own aircraft, drive cars worth 440 thousand euro and sail yachts costing 10 million. They holiday on islands in the Maldives - whole islands that they rent to ensure their privacy," the article reads.

 

Heritage Foundation: Bulgaria economy more free but not quite there yet

The Bulgarian economy is 64,6% free, according to the 2009 Index of Economic Freedom, released by the Heritage Foundation and the Wall Street Journal.The score places Bulgaria in the group of countries with moderately free economies.Bulgaria's economic freedom score ranks the country 56th among a total of 183 in the 2009 Index. The overall score is 0,9 point higher than last year, primarily as a result of improved business and fiscal freedom, according to the report.Bulgaria is ranked 26th freest among the 43 countries in the Europe region, and its overall score is well above the world average, the report points out, adding that Bulgaria has overcome initial delays in the transition to a market-oriented economy by pursuing comprehensive economic reform and trade liberalization.The top five Bulgaria's economic freedoms, well above the global average, are: fiscal freedom (86,2%), trade freedom (85,8%), labor freedom (78,4%) business freedom (73,5%), monetary freedom (72,8%).Property rights, and government size remain problem areas - by its 30% property rights freedom index, the country is well below the world average. The report also gives a low score to the freedom from corruption index and points out that the country still has a high rate of organized crime and government and judicial corruption with corruption's threat to the security of the common border being a matter of great concern to the EU.Total government expenditures, including consumption and transfer payments, are also high, the report reveals. In the most recent year, government spending equaled 37,1% of the Gross Domestic Product.

Government earmarks € 204.5 М to support economic growth

The government is expected to approve a decision today to allocate BGN 400mn (EUR 204.5mn) to projects in agriculture, railroad transportation, and social areas in a bid to avoid the steep economic slowdown this year. Most of the funds (BGN 211mn) will finance the national contribution for EU payments for land plots and milk production under the Common Agricultural Policy. The cabinet has earmarked BGN 95mn for railroad and social infrastructure and additional funds will finance renovation of schools, kindergartens, and other social projects.

Second session of joint Bulgarian-Iranian transport commission concludes

 

The second session of the Joint Bulgarian-Iranian Transport Commission concluded at the Bulgarian Ministry of Transport on Thursday, ministry officials said. Bulgarian Deputy Transport Minister Youdjel Atilla and Iran's Deputy Roads and Transportation Minister Seyyed Mahdi Hashemi co-chair the commission.Experts held talks on automobile, sea, air and railway transport and aspects of the bilateral cooperation within the session.A possible launch of a Sofia-Teheran-Sofia bus service was examined and prospects for furthering cooperation in the area of sea transport were discussed.Representatives of the Bulgarian and Iranian railways discussed possibilities for increasing the volume of cargo transport between the two countries.Seyyed Mahdi Hashemi met with Transport Minister Peter Moutafchiev. Both parties stated their willingness to develop ties in the area of transport.

 

 

22% increase of salaries in 2008

The total income of one person from a household last year has increased by more than 17%. The statistics reports an increase of work salaries by nearly 22%, BNR announced.The absolute increase of salaries last year per person from a household is between 132 and 160 levs, the statistics calculates.For pensions the increase is from 64 to 73 levs on average per person.Income from self-employment decreases surprisingly.Expenditures per person from a household have also increased by an average of 12%.Expenditures on food and non-alcoholic beverages are the same, while more substantial is the increase of household expenditures - water, electric energy, heating, furnishing and support from 48 to 55 levs from November 2007 to November 2008.Expenditures on health care also increase from 12 to 14 levs on average per person; for transport and messages as well as clothing.At the same time the consumption of bread and paste products decreases, while the consumption of milk and diary products, fruits and vegetables increases.

Bulgaria could get back frozen EU funds

Reforms could lead to the release of 115 M euro unfreezing could boost prime minister's re-election bid. The European Commission hopes to release 115 million euro of suspended EU funding to Bulgaria, following signs that the country has reformed its road infrastructure agency, according to an official. Releasing the money, which was frozen because of concerns over corruption, would give a political boost to Sergei Stanishev, the country's prime minister, ahead of a general election in June. The 115m euro was allocated to the Bulgarian road agency primarily to help it build a motorway through the mountains between the capital Sofia and Pernik, in western Bulgaria. But the Commission froze the funds last July following corruption scandals involving Vesselin Georgiev, the agency's director, and two of his officials. Georgiev resigned after he was accused of having awarded maintenance contracts to a company run by his brother, while the officials were accused of demanding bribes. The Commission said that its decision to freeze the money was based on "procurement irregularities" and conflicts of interest, as well as staffing and training problems. A meeting was held in Brussels on Monday (12 January) between representatives of the Commission, the road agency and the Bulgarian government. Commission officials are planning to visit Bulgaria on 26-28 January to assess whether management of the agency has improved sufficiently to release the frozen money. A Commission official said: "The documentation we received from the deputy prime minister's office, and the conversations we've had with the director responsible for the road infrastructure agency, point at this stage to a positive outcome in terms of the suspension being lifted." The official added that "the findings on the ground will be crucial": no decisions or judgment will be made until after the site visit?. The Commission estimates that, if there is a positive decision, the earliest the funds could be released is March. If the money is unfrozen, it would be the first time that the Bulgarian government has successfully reclaimed suspended European funds. The Commission froze a total of 486m euro of EU funding for Bulgaria last year because of concerns over maladministration and corruption. The funds came from different EU programmes. The country permanently lost 220m euro of the frozen money in November (from the pre-accession programme Phare), when the final deadline for allocating it to individual projects passed.The Stanishev government's management of EU funds is a major issue in domestic Bulgarian politics and the loss of the Phare money led to calls from the opposition for the government to resign. Stanishev's Bulgarian Socialist Party currently trails in opinion polls, behind the opposition party Citizens for the European Development of Bulgaria.

 

INVESTMENTS:

Dr. Stoyan Stalev, IBA executive director: we could attract EUR 5 billion of foreign investments

Dr. Stoyan Stalev, executive director of InvestBulgaria Agency in an interview for the Manager Weekly

Q: Mr. Stalev, what is the amount of foreign investments in Bulgaria for 2008?
A: According to official statistics till the end of September the amount of foreign investments is EUR 3,7 billion. I hope it will increase to EUR 5 billion after data till the end of the year is available.

Q: Which are the sectors with reduced investments?
A: There is reduced amount of investments in construction, vacation resorts, household construction, retail and hotel business.

Q: Which were the sectors most attractive for foreign investments?
A: in 2008 we witnessed an interesting trend. While in the real estate sector there is a decline of EUR 1 billion, in the January – September the production registers an increase of investments almost 3 times larger than the increase we had for the same period in 2007. obviously there is a redirection of investments towards the industry. As a result the state support was redirected to the industry, renewable sources energy production, medicine and technologies sectors.

Q: What is the amount of investments expected in 2009? The predicted in the 2009 budget amount of investments is EUR 5 billion, is this obtainable?
A: I cannot give you a straight answer. First of all we have to retrieve the 2008 data. Generally speaking I am convinced that Bulgaria is able to appropriate EUR 5 billion. The greatest challenge for us will be the successful start of the Cohesion Fund. The InvestBulgaria Agency will be a beneficiary of this fund.

Q: Do you expect a change in investors’ intentions as a result of the international financial crisis?
A: Of course the crisis will have its effect on investors’ strategies. We already saw large American investors withdraw. But I think Bulgaria has good positions. We have the lowest corporate and income tax in EU. Bulgaria could be good starting point for companies seeking to expand business and enter new markets beyond EU, such as the Black Sea region, Russia and the Middle East.

Q: What are the advantages our country could offer to foreign investors?
A: We entered the crisis with a buffer like the budget surplus. Our banking system is stable and the Bulgarian financial market is not affected by the international financial crisis. We also have the advantage of being the EU member state with lowest taxes.

Sopharma continues to invest at slower rate

Sopharma pharmaceutical manufacturer opened new logistic centre in Sofia in the end of 2008 and in a month or two will open another one in Veliko Tarnovo. Pharmaceutical industry will not be the most affected by the crisis and our strategy for 2009 will be defensive, Ognyan Donev, executive director of the company, said in an interview for Pari daily. Our sales and profits for the last year are good.

Multi-level parking lots to be built in central Plovdiv

Five multi-level parking lots are to be build in the centre of Plovdiv, the second largest Bulgarian city, in order to facilitate parking congestion in the town centre. The facilities will be located on Suborna street, with the first parking lot going to occupy area in very close proximity to one of the main orthodox cathedrals, St Bogoditsa. The second would be built on the other side of the old town, near the Seven Hills hotel, on the parcel of land where the former Kosmos cinema once stood. The remaining lots will be constructed on Balkan and Krichim streets, in the central part of Plovdiv. The deputy mayor of Plovdiv Petko Atanassov stated that negotiations are underway for a possible decision to close the central part of Plovdiv for traffic until the parking lots are erected to avoid even further congestion and traffic with all the lorries and other construction works. All the parcels for the new parking lots were approved at the coalition council, with the municipal director Todor Petkov, website stoitelstvo.bg reported.

Simprolit BG invests € 3 M in new plant

 

A new plant for the production of construction materials using polystyrene concrete, or simprolit, is to go into operation in this Western Bulgarian town, the plant's executive director, Vladimir Stoilov, said. He explained that simprolit is a patented mixture made of expanded polystyrene granules, Portland cement, water and special admixtures, which has the best thermo-physical properties in the class of light-weight concretes. Simprolit polystyrene concrete and simprolit elements are used for residential, business, industrial, sports, rural and other special structures, such as monolith and prefabricated structures, thermo-insulating and soundproofing covering layers, self-supporting walls in all types of buildings, external soundproofing and thermo-insulation cladding of facade structures and other structural elements, inner self-supporting partition walls, etc. In Bulgaria there are not yet buildings using simprolit elements except for the building of the Simitli plant itself which was built with simprolit blocks made in Serbia. Stoilov said that the licensing rights for the material in Bulgaria are held by Simprolit Bulgaria OOD which has so far invested 3 million euros in the Simitli plant. The factory takes up an area of 13,500 sq m. It will initially employ 50 people, expected to be increased to 120-150 workers. The technology for the material was developed by Serbian Academician Milan Devic. Simprolit is now made in ten plants Serbia and Russia.

 

 

 

 

 

 

 

Bulgarian firm to spend €1.3 M to prospect for molybdenum

 

The Bulgarian Energy Corporation will invest 1.3 million euro ($1.7 million) to prospect for molybdenum deposits in central Bulgaria, the government said on Thursday. The company was awarded a three-year permit to explore an area of 114 sq km in the Stara Zagora region, the government said in a statement. Molybdenum, a silver-grey metal, is used in steel production among its other uses.

Turkish company invests € 20 М in Bankso

Regnum, Turkish construction and investing company, opened officially its first big project in Bulgaria worth EUR 20 million: Regnum Crystal Apartments Luxury Ski&Spa in Bansko ski resort. 40% of the apartments have already been sold mainly to Englishmen. The investors from Turkey have plans for residential buildings and a business centre in Plovdiv, holiday complexes and commercial centres that will be realised by the subsidiary Regnum-Bulgaria.

Technopolis builds third hypermarket in Bulgaria's capital Sofia

The Sofia Mayor Boyko Borisov turned Thursday the first sod of the third electronics hypermarket from the Technopolis store chain in the Bulgarian capital. The construction of the new store, which is located in the Nadezhda Quarter, is expected to be completed by October 2009. It will employ 120 people. The company is investing over BGN 12 M in its newest hypermarket. The Bulgarian store chain Technopolis was created in 2001. It currently has 21 hypermarkets for electronics and household appliances in 20 cities across the country. In the seven years since its found, the company has invested over BGN 126 M in its stores, and is employing over 1 900 people.

 

 

 

 

 

 

 

 

 

 

COMPANIES:

 

Italian firm to bring gas to Bulgarian Velingrad

 

Italian firm Euroservice Implanti (name as spelled by the source) will build a gas supply system in Velingrad, southern Bulgaria, the local authorities said. It is the first investor that has shown interest in the spa town’s gasification in the past ten years. The difficult terrain as well as the huge investment have scared investors away. Velingrad is among the few towns in Pazardjik region that have not switched to gas yet. The Italian company will fully bankroll the gas supply project, Bulgarian news outfit Focus reported. The feasibility studies and the choice of route for an easier supply of methane to the town in the Rhodope mountains have been discussed at a meeting with the local government. The Italian investor is expected to submit an official proposal for review by municipal councillors in February 2009.

 

Bulgarian company launches coffee chain

Ian Coffee Break Group polans to open 15 outlets in Bulgaria over the next five years, company manager Kevork Krikorian said. The investments will exceed EUR 5 mln. The first outlet of the chain already opened doors in the Stara Zagora mall, spanning 1,000 sq m. Ian Coffee Break Group is a local chain registered in Varna. It will compete with Costa Coffee, onda, Cofeeheaven, Maccafe and Cofee house which are already present in bigger cities. A few months ago the global leader in the sector, Starbucks, also entered the local market opening its first outlet in Sofia, operating thorugh Greek company Marinopoulous coffee company. Another Starbucks outlet will open in the next few months in the capital, near the National Palace of Culture. “Our ambition is to turn into a non-standard coffee shop,”, says Krikorian. In the evening the coffee shops of Ian Coffee Break will turn into entertainment lounges with live music. The formula which Ian Coffee Break will use to develop its chain will be based on three factors: good coffee, good location and good coffee sweets. “When we select the premises for our outlets we require that they are open with large windows and terrasses,’, Kerkorian explains. The company prefers the premises to be with high ceilings.The new chain also has ambitions in the franchise area after establishing a firm foothold in the country. “The expansion of any chain is unthinkable without it,” says Krikorian. In order to control the quality of the services in the chain the firm will develop a special system of secret clients. At the moment Ian Coffee Break is negotiating the development of the chain in neighbouring countries. In case of success, four outlets in Bucharest and four in Istanbul malls will be opened at the same time as the Bulgarian ones.

Gas crisis scares potential buyers of Kremikovtsi

Candidate investors for Kremikovtsi want to see how the gas crisis will end before the enter the final stage of talks with the major creditors, according to two bondholder representatives and deputy Economy Minister Nina Radeva, speaking to Dnevnik. The bondholders specified that they have submitted their bond sale conditions to the two candidates – Brazilian CSN and Russian Smart Group. The bond issue is the second largest debt of the metallurgical giant and if the appeal against the state’s demand for repayment of the aid package of BGN 698 mln is upheld by the court the bondholders will play the lead role at the creditors’ meeting. The two candidate buyers have also talked about a settlement with the state, which through the Ministry of Economy and Energy and several state monopolies is currently creditor number 1. If the bondholders reach an agreement together with the economy ministry and one of the candidates they would have majority for the vote at the creditors’ meetings. Thus the administration procedure for Kremikovtsi will be accelerated and a health plan could be implemented. The alternative is asset sale through a tender and it is backed by ArcellorMittal which managed to get a place on the list of creditors. Although in the last few months the world steel leader has been saying it wants to acquire a fully-integrated facility it has been steering clear of talks with the bondholders and the government. They last got an invitation for negotiations in November. Yesterday no representatives of the company of the older Mittal brother could be reached for comment. At the same time syndicate confederation Podkrepa said it will make sure the debts of football club CSKA to Kremikovtski are repaid. “During the years Alexander Tomov, [executive at Kremikovtsi and at the football club], has been favouring the club at the expense of the plant and it is high time the assets and cash are repaid,” sources from Podkrepa said. The confederation also cancelled a protest planned for today in order to avoid political forces taking advantage of Kremikovtsi’s problems. According to Liudmil Pavlov from Podkrepa both candidates have presented similar offers for the plant in financial terms. The difference was only in the term of their viability plans. Smart Group’s plan envisaged five years for the facility to be revived, while the Brazilian investor offered four years.

Piccadilly to open 20 corner shops in Sofia

 

2009 Bulgaria’s Varna-based supermarket operator Piccadilly said it will open 20 corner shops in the Bulgarian capital Sofia by the end of 2009. The first two stores under the Piccadilly Express brand have already launched operations, and a third one is due to open by end-February. The new retail chain will be expanded to 40-50 shops, the bulk of them set to appear in Bulgaria's larger cities and towns. The operator will also go ahead with plans to open hypermarkets of over 12 000 sq m under the brand Piccadilly Extra. A further 20 supermarkets in the 2000-4000 sq m range will be added to the chain’s current network of 17 stores across the country. Piccadilly, owned since 2007 by Serbia’s Delta Max Group, is one Bulgaria's biggest supermarket chains and has long dominated the market in the city of Varna, embarking on a nationwide expansion campaign after the ownership change and competing directly with Germany retailer Metro, Austria' sBilla and discount chains Kaufland and T-market.

"Orgahim" to open new work places

The biggest producer of paints and varnishes in Bulgaria "Orgahim" AD will take up the production of all paint-varnish materials from "Polycolor" Bucharest, including water-based coverings.The production of all alkyd and polyester resins will be entirely kept by the Bulgarian company, as a small part of the production of "wet coats" is being transferred to Bucharest, the company announced.The company in Ruse will also take the production process of dry construction mixtures.The changes are a prerequisite for an increase of the production of "Orgahim" in 2009. The company's idea is that the capacity of the "Smoli" department is increased and new work places are opened, because there is an increase in consumption."Orgahim" AD is the biggest producer of paints, varnishes, resins and anhydrids in Bulgaria. Nearly 70% of its production is designated for the industrial market. 1200 people are working in the company with more than 105 years of history.

BTC and Vivatel merger completed

The telecommunications operator BTC successfully merged with its subsidiary BTC Mobile (Vivatel) in a transaction finalized on January 13. As a result of this the company will have the biggest portfolio of services, products, and overall decisions on the Bulgarian communications market, the press release says.The procedure started at the end of September 2008 following a decision of the BTC General Meeting of Shareholders. It aimed to improve the efficiency of management, optimize costs and ensure a stable growth. The technical integration of the two companies allows for more precise market segmentation, detailed selection of vendors and launch of innovative products and services. The merger is part of the BTC business strategy to introduce a single brand, the company said.The BTC announcement drew negative comments from other players in the telecom sector. Mobile phone operator MTel said in a press release that the transaction would have a strong adverse effect on competition in the telecommunications market. "It provides more room for transfer of market power from BTC between connected markets (for mobile and for landline services).Even after it has been found to abuse its dominant position on a number of occasions by the Commission for the Protection of Competition, BTC still controls an unprecedented market share of more than 95 per cent. The merger would additionally enhance its monopoly," said MTel. It expects the merger to facilitate cross-subsidizing between the two companies which goes counter the competition regulations. BTC shares were last traded on the Bulgarian Stock Exchange on January 6 when 100 shares traded hands in three deals at 5.01 leva/share.

 

 

 

 

 

GLOBAL FINANCIAL CRISIS ANALYSIS AND NEWS:

 

 

Bulgaria's Kurdzhali sets up committee to fight global financial crisis effects

 

The leader of the Bulgarian Socialist Party in Bulgaria's southern city of Kurdzhali announced Friday a local committee to tackle the effects of the global financial crisis would be set up.The Committee will keep an eye on the largest companies in the District of Kurdzhali, which are expected to be affected the most by the global crisis.It will assist the local employers in coordinating their measures in order to alleviate as much as possible the effects of the crisis.The anti-crisis Committee will be founded at the beginning of next week. A number of high-ranking managers of local firms have already confirmed their participation in it.The Kurdzhali socialists came up with the idea based on data demonstrating that the number of employed persons in Bulgaria's industrial sector was declining because of the shrinking export markets for Bulgarian products.

Bulgaria's Svilosa shelves €250 M  paper plant project over global crisis

 

Bulgarian cellulose producer Svilosa has put on hold plans to build a paper producing plant at an estimated cost of some 250 million euro ($334.1 million) due to the global financial turmoil, the company's executive director said on Monday. The project is at a very early stage and at the moment we are not working on it," Dimitar Kolchev told SeeNews, adding that Svilosa is unable to secure funding for the project because of the financial crisis.Two years ago the company said it plans to build the plant with capacity of 500,000 tonnes a year designed to use waste paper as raw material. At the time it said international lending institutions were interested in the project.No shares in Svilosa changed hands on the Sofia bourse on Monday. They last traded on January 6, when they ended at 1.0 lev ($0.68/0.51 euro), down 16.6% from their previous close on December 23, 2008.

Not all firms will survive the crisis

There are firms, which will not survive the crisis. Despite that money for the business must be demanded. This was announced by the Chair of the Bulgarian commercial-industrial chamber Bozhidar Bozhinov, cited by BNR.His opinion is that all resources should be used, so that the business and the economy are aided and this must be connected with a certain state position.According to him, the firms which were affected by the crisis will probably not be able to seek compensation legally. The major impediment for this will be the signed contracts for the delivery of gas.He also pointed out that a work group of experts from the Bulgarian commercial-industrial chamber will propose a package of solutions to the government for a change of legislation."I think that the most important thing, which came up from this crisis, is not that we will be compensated but that we will create preventions, which will not allow this to happen again", Bozhinov added.