불가리아 주요 경제뉴스 ( 23 – 30 JANUARY 2009 )

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT ( 23 – 30 JANUARY 2009 )

 

 

 

Sections/headline briefs:

 

MACROECONOMY:

 

·        Japanese, Bulgarian ministers discuss relations, economic cooperation

·        Bulgaria and Japan to boost business relations

·        The parliament decided - Bulgaria is restarting the "Kozloduy" reactors

·        EC: We respect the decision of the Bulgarian parliament

·        Paris cuts Bulgaria off on Kozloduy nuke reactivation

·        PM Stanishev: Bulgaria needs a clever plan for NPP Kozloduy

·        President Purvanov: Bulgaria will have a say in EU energy policy

·        Borissov advises: Argument "Kozloduy" with the financial crisis

·        "Kozloduy" reactors meet the safety standards

·        Minister Grancharova to lead the negotiations for units 3 and 4

·        Bulgaria to start imports of 1.0 BCM of Azeri gas annually next year

·        Gas axe for the industry in Bulgaria

·        Gas crisis makes Nabucco project popular

·        EU says 'No' to Nabucco financing

·        Bulgaria's President: Bulgaria relies on natural gas supplies from Cairo and Baku

·        Bulgaria launches new home-buying programs

·        Apartment prices in Sofia suburbs down to € 500 per square meter

·        25 000 new homes for sale in Sofia

·        Bulgaria's tourism braces for hard summer

·        Soaring prices eat up Bulgarians' wealth

·        BGN 2 billion losses for the economy because of unpaid VAT

·        456 million levs direct losses for Bulgarian firms from the gas crisis

·        Sofia metro turns 11, bound to expand in 2009

·        AmCham in Bulgaria elects banker Anthony Hassiotis as its president

·        Awards of German economy in Bulgaria for 2008 presented

·        Agrosector boosts economy

 

INVESTMENTS:

 

·        Invest in Bulgaria 2009 Summit features 25 top government and business leaders

·        Sultan of Oman acquires stake in Bulgarian bank

·        Bulgaria's biggest wind generator commissioned at Somovit

·        Power utility’s Greek unit to build wind farm

·        Sofia waste treatment plant to stomach € 170 M

·        3 purification centers constructed in a Black sea municipality

·        Glavbolgarstroy invests BGN 30 M in Borovets

·        Japanese investors are looking your way

·        Japanese companies to build wind farms in Bulgaria

·        UK fund plans 2nd logistic project in Bulgaria

·        Rollplast to receive top investment certificate for window plant

 

COMPANIES:

 

·        Toshiba, NEC in talks to integrate semiconductor business

·        Bulgarian state railways company BDZ, Germany's Deutsche Bahn to set up JV

·        Agra 2009 with 800 exhibitors

·         Bulgarian companies in UK set up own business club

·        Debts of Bulgarian companies to reach BGN 200 B in 2009

·        Bulgarian construction companies run out of cash

 

GLOBAL FINANCIAL CRISIS ANALYSIS AND NEWS:

 

·        World Bank expert: Financial, gas crises to hit Bulgaria's exports

·        Bulgarian business climate continues decline in January 2009

• PM: "Global Financial Crisis finds Bulgaria with relatively stable standing and guaranteed financial stability"

·        Bulgaria's Finance Minister: Financial Crisis has spread to real economy

·        Bulgaria's Varna cuts down budget by 11%

·        Investors freeze 1 million sq. m of malls

·        Crunch freezes 1st Pazardjik mall scheme

·        Ideal Standard, Korado cut jobs

·        Bulgaria's Blagoevgrad municipality companies slash jobs over Financial Crisis

• Bulgarian banks lay off 2 000 clerks over Financial Crisis
• UniCredit boss: The measure is very positive and completely necessary to Bulgarian economy

·        Loans for new business projects in Bulgaria to drop in 2009

 

Articles:

 

 

MACROECONOMY:

 

Japanese, Bulgarian ministers discuss relations, economic cooperation

Bulgarian Foreign Minister Ivaylo Kalfin met [on] Wednesday [28 January] with the Japanese minister for foreign affairs, Hirofumi Nakasone, the Bulgarian Foreign Ministry said in a press release. Kalfin is on the official Bulgarian delegation led by President Georgi Purvanov paying an official visit to Japan on 25-29 January. During the talks Kalfin praised the state of the bilateral relations characterized by traditional friendship and partnership, and expressed a wish for maintaining an active and balanced political dialogue and for intensifying trade and economic ties.The two foreign ministers noted the significance of the 90th anniversary since the establishment of official relations between Bulgaria and Japan and the 50th anniversary since the restoration of diplomatic relations between the two countries. The two said that marking the anniversaries with the "Year of Bulgaria in Japan" and the planned exchange of visits at the highest level will give a new impetus in furthering the bilateral ties in all spheres.The participants in the talks discussed the prospects for broadening the economic cooperation between Bulgaria and Japan and also for attracting more Japanese investments in Bulgaria. The two officials noted the importance of the political consultations between the two countries' Foreign Ministries for coordinating positions on important international issues. An agreement was reached for exchanging opinions and for cooperation in the area of development aid, including by means of designing joint projects, for the issues about climate change, mutual support in the United Nations and other international organizations, as well as vis-a-vis international issues of common interest such as the UN reform, the situation in Afghanistan, Iraq and the Black Sea region. Kalfin welcomed the new programme of the Japanese Ministry of Foreign Affairs for sending already this month volunteers to teach Japanese language and culture in Bulgaria.

Bulgaria and Japan to boost business relations

"Geographically, Bulgaria is far away from Japan, but it is close to our hearts," stated four years ago in Sofia Hiromossa Yonekura, then head of the Balkan Department with the Japan Business Federation (Keidanren). A week ago, another Keidanren representative also underlined that Japan and Bulgaria were on good friendly terms but the economic relations needed a boost. In Keidanren headquarters, Mr. Ichiro Hara, reminded that Japan's economy was in recession and showed smaller investment interests.
"Presently, the size of Japanese investments in Bulgaria was not big but Bulgaria's EU membership opens new opportunities for bilateral business relations," Mr Hara predicted as he expressed hope that the visit of Bulgaria's President Georgi Parvanov to Japan would contribute to the enhancement of the relations between the two countries. Keidanren's potential to assist is substantial. The Japan Business Federation helps the economic relations between Japan and other countries worldwide through dialogues with their governments, business groups and international organizations.

 

The parliament decided - Bulgaria is restarting the "Kozloduy" reactors

With 140 votes "for" the parliament adopted the start of the respective procedures for the opening of 3^rd and 4^th reactor of the atomic plant "Kozloduy".This was accomplished due to the support of independent deputies, the parliamentary group of movement "Napred" and separate representatives of BND, NDSV and "Ataka", as well as BSP and DPS.Before the voting Olimpi Katev warned his colleagues from the parliamentary tribune that the support of this decision will be a "placing of a banana peeling" and blamed the supporters of the idea for restart of blocks 3 and 4 that they are practically withdrawing their signatures from Bulgaria's EU accession contract."Obviously the atomic lobby of the President prevailed", Katev commented.The ruling coalition and those that supported the decision received reproach from SDS and DSB as well.

EC: We respect the decision of the Bulgarian parliament

We learned a lesson from the voting in the Bulgarian parliament, we respect it and now the government must decide what to do next. This was announced by the spokesman of the European Commission Mark Gray in connection to the voting of the National Assembly, calling upon the government to assess the opportunity for restart of blocks 3 and 4 of atomic plant "Kozloduy", stopped according to the Contract for Bulgaria's accession to the EU."The European Commission respects the decision of the Bulgarian government for opening of 3^rd and 4^th block of "Kozloduy", he added, cited by BNR.It is up to the Bulgarian government to decide what it will do next and how it will argument a possible demand in this direction, he said. If we receive such a demand, we will investigate it and come up with an answer, Gray clarified. He added that the gas crisis is over.

Paris cuts Bulgaria off on Kozloduy nuke reactivation

 

"All 27 EU members have to give their assent to restart units 3 and 4 of the Kozloduy nuclear power plant," France's ambassador to Bulgaria Etienne de Poncins said at a conference "Monitoring of the government priorities of the EU member states" held at the Bulgarian Council of Ministers. In His Excellency's opinion, all EU member states have to be in favour of the reactors' reactivation. only then can Bulgaria take any steps towards reopening them.De Poncins was categorical that "such unanimity is nearly impossible". "Let's not forget that Bulgaria received compensations for closing the reactors, and now takes advantage of financial credits for compensating the possible losses of closing the reactors, the diplomat reminded.

PM Stanishev: Bulgaria needs a clever plan for NPP Kozloduy

"Our arguments in favour of the restart of NPP Kozloduy power units 3 and 4 should be presented before the European Commission very cautiously and cleverly," Bulgaria'0s PM Sergey Stanishev said in the town of Rousse on the Danube.To his words, Bulgaria should not leave the EU with the impression that it acting out of spite. Rather, we should take into consideration the clauses and conditions provided in the EU accession treaty.
"The analysis of our experts should be very precise, as the European Commissions chief argument is that the gas crisis is over. However, it is equally true that the Russia-Ukraine relations are quite unstable, despite the agreement that the two countries signed," Mr. Stanishev said."And it is this instability that gives the Bulgarian government a reason to request a temporary restart of Kozloduy nuke's decommissioned power units," he went on.

President Purvanov: Bulgaria will have a say in EU energy policy

"Bulgaria used to be and will be an active factor in the laying out of a modern and effective EU energy policy," Bulgarian President Georgi Purvanov said Friday in his address at the reception he hosts every year for ambassadors accredited to Bulgaria.Bulgaria believes that sustainable energy security in Europe can be achieved only through an active dialogue on equal terms and beneficial to all parties with the countries from the Black Sea Region, Central Asia and the Middle East, which could provide new energy sources and will be part of the routes under the new energy projects, Purvanov said.Bulgarian President said that for the past year Bulgaria was consistent in its foreign affairs priorities and proved itself to be a stable, secure and predictable ally within the structures of EU and NATO.Purvanov said that as a new EU member, Bulgaria was determined to implement the EU agenda through its activities, initiatives and overall policy. Bulgaria participated actively in the preparation and adoption of the Lisbon Treaty and ratified it very quickly. He added that Bulgaria was and will continue to be an active participant in the EU policy on enlargement and new neighbours.Purvanov spoke of the pull out of the Bulgarian forces from Iraq, whose mission there he described as "successful" and confirmed Bulgaria's willingness to take part in peace keeping operations in the future.Purvanov said that Bulgaria continues to be a factor of stability and security on the Balkans, noting the numerous bilateral relations and the active multipartite dialogue on all questions in the region.Bulgarian President also noted Bulgaria's relations and participation in a number of initiatives concerning Asia, Africa and Latin America in search of new partners and a desire to restore good relations with old friends.As regards the domestic political and economic situation, Bulgaria is successfully tackling challenges and is stable, Purvanov said. He added that the presidency will contribute to the keeping of stability in the years ahead. He expressed his assurance that in 2009 there will be a heightened sensitivity to social issues and the expectations of the various social groups will be considered more carefully.Lebanon's Ambassador to Bulgaria and doyen among foreign diplomats Micheline Abi Samra noted that within two years of its accession Bulgaria proved it could be a factor of stability on the Balkans and is committed to actively participate in the strengthening of ties between the EU and the Euro-Mediterranean space. Ambassador Samra said that with its tolerant culture and ability to tackle problems in a humane and tactful way, Bulgaria plays an important role in the dialogue between cultures.Among those who attended the reception were Vice President Angel  Marin, Prime Minister Sergei Stanishev, Ministers Gergana Grancharova, Mihail Mikov and Assen Gagaouzov, Deputy Ministers Milen Keremedchiev and Yavor Miloushev, Parliamentary Deputy Chairs Lyuben Kornezov, Kamelia Kassabova, Younal Loutfu and Petar Beron, MPs, and President's advisers.

 

 

 

 

Borissov advises: Argument "Kozloduy" with the financial crisis

According to the Sofia mayor Boyko Borissov the opening of 3^rd and 4^th block of "Kozloduy" must be used by the government for a motivated defense in front of the EU to the thesis that the restart of the reactors could compensate to a great degree the problems, expected as a result of the financial crisis. According to him, the arguments in front of the EU must be connected not with gas, but namely with the financial crisis.One day justice will be sought from the current governing coalition for our inability to seek compensations for the gas crisis, he added, cited by BNR. This is a criminal government, the leader of GERB is emphatic. He posed the question why the contract for gas delivery has not been signed directly with GAZPROM, but with firms-mediators.

"Kozloduy" reactors meet the safety standards

Several years ago the International agency on atomic energy has expressed an opinion that the Bulgarian reactors in atomic plant "Kozloduy" meet the safety standards. This was announced by the manager of the Department of atomic knowledge management in the International agency on atomic energy Yanko Yanev.Block 3 and 4 of "Kozloduy" must be restarted, because Bulgaria needs them, Yanev pointed out.He added that technically and technologically this is possible, but it is necessary for them to reclaim their license.

 

Minister Grancharova to lead the negotiations for units 3 and 4

 

Minister of European Affairs Gergana Grancharova will maintain communications with Brussels and will inform EC about the steps Bulgarian government is taking for the re-commissioning of the dormant Kozloduy units, the Monitor Daily informed.The Energy and Economy Ministry is working on the arguments that will be used for negotiating the re-opening, Grancharova said.Re-commissioning the units is a short-term goal, Grancharova added. The society should not be misled with empty causes, she concluded.

Bulgaria to start imports of 1.0 BCM of Azeri gas annually next year

 

Bulgaria will start importing from Azerbaijan 1.0 billion cubic metres (BCM) of gas annually next year, Bulgaria's government said late on Monday. Bulgaria's state-owned company Bulgargaz and Azeri gas company SOCAR will start next week technical talks on the parametres of the future deal, the Bulgarian government said in a statement after Bulgaria's Prime Minister Sergei Stanishev and Azeri President Ilham Aliyev agreed on the gas deliveries in Budapest where they attended a conference on the European Union-backed Nabucco pipeline project.The agreement comes only days after the end of a dispute between Russia and Ukraine which left Europe without gas supplies for two weeks.Gas from Azerbaijan is planned to feed the Nabucco pipeline worth 7.9 billion euro ($10.5 billion) and designed to carry 31 billion cubic metres of Caspian natural gas to Europe. Bulgaria together with five other states is a shareholder in the planned key gas pipeline that is to diversify gas deliveries and to reduce Europe's gas dependence on Russia. Bulgaria, whose gas supplies come almost solely from Russia, is also a shareholder in a 10 billion euro Russian-led South Stream project. The joint project of Russia's gas giant Gazprom and Italian oil and gas company Eni is designed to carry 30 billion cubic metres of Russian gas yearly to Austria and Italy under the Black Sea and via Bulgarian territory.

Gas axe for the industry in Bulgaria

 

Bulgaria wants to buy gas without intermediate parties, this is the idea Bulgarian government threw in the face of Gasprom vice-president Alexander Medvedev during his visit in the country. Shortly before the crisis, however, the cabinet had quite different understanding of the place of gas mediators. According to Pari daily’s sources that want to remain anonymous the ministry of economy and energy was preparing questionable amendment in the Act of power industry according to which privileged gas consumers connected directly to Bulgartransgas had to join the gas distributing companies thus having to pay distribution tax plus the transportation tax they are paying at present. The result would be higher price of the blue fuel, which will not be beneficial for the industry.
This is yet another blow at the economy, Kiril Domuschiev, president of Supervisory Board (SB) of Biovet pharmaceutical manufacturer, commented the changes. We don’t want to joint the gas distribution companies as their prices will be very high. We want no mediators but opportunities to choose where to buy the gas from. The amendment in question was discussed in the ministry before the end of 2008. Representatives of the industry however were not allowed to attend on grounds that the meeting had been cancelled. This secrecy raises the question who initiates such amendments in the law. Representatives of the branch put another question: Why the power industry is governed by offshore companies with unclear ownership? This lack of transparency is against the requirements of European Union. The gas suppliers should also declare the prices and conditions under which they sell the fuel to consumers as well as what price system they use for determining the tariffs.

Gas crisis makes Nabucco project popular

The gas crisis has made the Nabucco pipeline project extremely popular. The row between Ukraine and Russia left half of Europe without natural gas and the interest in the project that is meant to make the European citizens less dependent on Gazprom's mercy has grown. Representatives of all countries through which the pipeline is planned to pass - Bulgaria, Turkey, Romania, Hungary and Germany, which joined last, as well as representatives of the companies that are partners in the Nabucco Gas Pipeline International GmbH Consortium - Bulgargaz, BOTAS, Transgaz, MOL, OMW and RWE - have gathered in Budapest. Today they will discuss options to speed up the implementation of the pipeline project, which is expected to cost about ten billion euro and will have an annual throughput capacity of up to 31 billion cubic meters of natural gas. The pipeline will be three thousand kilometers long, four hundred of which will be in the territory of Bulgaria, and will supply natural gas to Southeast and Central Europe.

 

 

 

 

EU says 'No' to Nabucco financing

The European Union does not consider financing the Nabucco pipeline project. Reuters quotes European Energy Commissioner Andris Piebalgs saying that the European Union should not consider providing the Nabucco gas pipeline capital financing but it could provide loans and guarantees. Reportedly, this became clear at the conference in Budapest, attended by Bulgarias PM Sergey Stanishev. According to a publication of the Bulgarian News Agency BTA, the European Investment Bank is ready to consider a financial contribution to the Nabucco project in the size of a quarter of its total cost. The author quotes a statement that EIB Director Philippe Maystadt made at the forum in Budapest. To be granted a loan, however, the project should meet all technological, political and economic criteria, and Mr. Maystadt also requires an intergovernmental agreement. Reportedly, EBRD has also shown interest in financing Nabucco. 'Nabucco gained considerable importance after the gas crisis. It will provide an alternative to the gas supplies from Russia, connecting Europe to the natural gas producers in the Caspian region and the Middle East,' PM Stanishev said at the forum.

Bulgaria's President: Bulgaria relies on natural gas supplies from Cairo and Baku

Supplies of natural gas from Egypt, Azerbaijan and Turkmenistan can fully meet Bulgaria's demands for this fuel. Last year, Bulgaria's government signed principle agreements with these countries for the supply of about four billion cubic meters of natural gas a year. "This quantity of natural gas will be more than enough to meet Bulgaria's demands," Bulgaria's President Georgi Parvanov told the Japanese newspaper Nikkei. "Bulgaria plans to expand the list of its suppliers of energy resources," he went on.According to Mr. Parvanov, the Nabucco pipeline supplying natural gas to Europe from the Caspian region is a good alternative. The project provides that the pipeline will not pass through the territory of Russia."Although the Nabucco pipeline will be transiting natural gas through the territory of Bulgaria, we want to take precautions against possible supply halts, which caught us off-guard not long ago. For this reason we are looking to widen our choice of suppliers of natural gas. Also we hope that the Nabucco pipeline will start functioning in 2014," President Parvanov said. He added that Sofia might consider to restart NPP Kozloduy's shut down reactors in an attempt to make the country's energy sector less dependent on natural gas."The technical condition of NPP Kozloduy meets all standards of the International Atomic Energy Agency (IAEA) and we hope that the European Commission will support our initiative," Mr. Parvanov went on.

Bulgaria launches new home-buying programs

Building companies in Bulgaria have come out with a new way to sell homes in the current situation of tight crediting, provoked by the world financial crisis.  The latest option they invented for customers is buying via mortgage coupled with leasing: the bank loans 40 percent of the price, the customer provides another 20 and pays the rest in instalments according to a payment plan the seller has offered. In case of inability to cope with the repayment, the bank sells the property, recovers the loan, and gives what's left to the builder. "This practice has long been a success across Europe," RE/MAX Real Estate Bulgaria CEO Ilian Nikolov said. "Unfortunately, it has never been applied under the conditions of our economy because of the recent mortgage boom."

Apartment prices in Sofia suburbs down to € 500 per square meter

 

For the first time in several years apartments in Sofia are listed for sale for about or even under EUR 500, the 24 Chasa Daily reported on Wednesday.One-, two-, or three-room apartments in residential buildings under construction can now be purchased for EUR 495. These are located in outer residential quarters such as Obelya, Druzhba, and Lyulin but the paper reminds that even there the prices had reached EUR 700 just about a year ago.Thus, a 65-square-meter apartment can be bought there for EUR 32 000, and a three-room apartment of 100 square meters costs about EUR 50 000.The customers are not willing to pay more than EUR 900-1 000 per square meter at the present moment, the article says citing real estate brokers.The reduction in the apartment prices can be traced to the effects of the global financial crisis.

25 000 new homes for sale in Sofia

About 25000 new homes in Sofia are waiting for a buyer, shows the yearly analysis of Forton - a realty consultative company. These apartments are now under construction and their total area is around 2,2 million sqm. Fierce competition among investors and tightening accession to bank loans are the reasons for the drop in prices of projects with bad location and no infrastructure, reads the report.Forton's prognosis is that in 2009 the market would offer more attractive prices and new flexible payment plans. Foreign investors inclined to risk would withdraw from the Bulgarian realty market. More conservative German and Austrian companies and funds would replace them, the analysis reveals. US companies are also interested in making business in the region.Forton experts maintain that the interest of Greek investment companies is still high too.

Bulgaria's tourism braces for hard summer

The Head of the Bulgarian State Tourism Agency Aneliya Krushkova predicted Friday in the city of Ruse that Bulgaria's tourism enterprises would have a poor season in the coming summer, as quoted by the Pari Daily. Krushkova said the main problem for the tourism agencies would be the late bookings for their services as more and more foreign tourists would try to wait until the last minute in order to get discounted packages because of the effects of the global financial crisis.In her words, this would be especially valid for the Russian market, which is one of the main sources of summer tourists for Bulgaria.Krushkova also stated she hoped that Bulgaria's tourism won't register a negative growth in 2009 because of the global financial crisis, and that the sector would manage to maintain at least the same levels as in 2008.At the same time, however, Bulgaria's mountain resorts would be boasting good results from the current winter season, Krushkova predicted.

Soaring prices eat up Bulgarians' wealth

Soaring prices are eating up the wealth of the Bulgarian people. Last year the savings of the Bulgarian citizens increased only by six percent, compared to 38% in 2007, says a report of UniCredit Group on the wealth of the households in Central and Eastern Europe. Given 7.8% inflation for last year, the soaring prices have eaten up the wealth of the Bulgarians. The poor performance of the Bulgarian companies on the international financial market is the main reason for the high inflation rate in the country, the analysis reads. As a result, the wealth of the Bulgarian households is expected to shrink to 20% of the country's GDP, compared to 34% in 2007.Having in mind the low money-saving rates, the not so favorable economic climate and the credit crunch, this year the Bulgarian households may experience certain financial difficulties, says Debora Revoltella, UniCredit Group Chief CEE economist.According to her, this year the Bulgarian households will bet on more traditional forms of money-saving like bank deposits.

BGN 2 billion losses for the economy because of unpaid VAT

Two billion levs are the losses, which the Bulgarian economy has incurred because of unpaid VAT. This was announced by Georgi Kadiev, deputy chair of the economic commission in the Sofia Municipal Council during the conference on the yearly report of the press center for Democracy Research.According to his forecasts, the economic crisis might further develop the tendency of hiding and non-payment of taxes, especially of excise duty.As a conclusion to the meeting the participants announced that corruption in Bulgaria is spread from tax and customs inspectors to the highest levels of authority.According to the municipal advisor Dimitar Bachvarov, this year's report is the most analytical and gives the most precise data of all, presented up to now.Bachvarov sharply criticized the absence of most representatives of the cabinet and in particular the Justice Minister, as well as representatives of the Presidency.Why are the most important ministers from the cabinet, responsible for the suspension of the EU funds, absent, he asked rhetorically.Crime without punishment, which means that all Bulgarians, who follow the law and pay their taxes, are being punished. That is why our children leave Bulgaria, the municipal advisor was emphatic.

456 million levs direct losses for Bulgarian firms from the gas crisis

456 million levs are the generalized direct losses for firms in Bulgaria as a result of the gas crisis. The number of economic subjects included in the analysis of the Economy Ministry is 386, the press center of the ministry announces.325 of these have reported direct losses, while indirect - 252. The analysis shows that the firms have accrued direct losses for the amount of 213 million levs and indirect losses of 243 million levs.The reported losses of 456 million levs have been declared by the directly affected by the crisis economic subjects and do not include the loss for the state budget from the suspension and reduction of their activity.Having in mind that the decrease of the production of firms will lead to a negative effect regarding the tax income in the current and next year, the experts' evaluations of the Economy Ministry point out that the total loss for the economy significantly exceeds 500 million levs.Losses for the budget are to be assessed. Some of the firms also finalize the exact amount of the losses.

Sofia metro turns 11, bound to expand in 2009

The first part of the first (and still only) line of the metro in the Bulgarian capital Sofia was opened on January 28, 1998, the Pari Daily reminds in a retrospective article. At its opening the Sofia metro's only line was long 6,4 km, and had five stations. By 2001, two kilometers were added linking Sofia's largest residential quarter Lyulin to the downtown Serdika Station.In April 2003, another extension by 1,95 km of the subway line was completed extending it past the Lyulin Quarter into the Obelya Quarter in the suburbs, bringing its total lenth to over ten kilometers.The same metro line is supposed to be extended from the downtown of Sofia to the Mladost Quarter in the southeast by the fall of 2009. According to the last report of the Mayor Borisov, by May 2009 another part of the metro line between Mladost and the Dragan Tsankov Blvd will be opened, and it will then be connected to the Serdika Station.Thirteen new metro stations are to be opened in Sofia by 2012, the report states. The Lyulin-Mladost railway is going to be completed, and second line connected the Nadezhda and the Lozenetz Quarters is to be started.

AmCham in Bulgaria elects banker Anthony Hassiotis as its president

The American Chamber of Commerce in Bulgarian (AmCham) has elected Anthony Hassiotis, head CEO of Bulgaria's Post Bank, as its new President. In his inauguration address, Hassiotis stated that the representatives of the business sector were obliged to help the society and the country where they worked."We are going to contribute to the improvement of the connections between the Bulgarian bussiness and the international business community", the new President of AmCham in Bulgaria promised. Prior to his election as President, Anthony Hassiotis has been a member of the Board of the Directors and first Vice-President of AmCham in Bulgaria. He has also been the financial manager of AmCham in Costa Rica, and a member of AmCham in Greece.Hassiotis is currently in charge of the eight subsidiaries of Eurobank EFG Group in Bulgaria, including of Post Bank, which is legally registered as Eurobank EFG Bulgaria Jsc.Starting in 1982, Anthony Hassiotis has occupied top-level management positions in international banks in the USA, Saudi Arabia, Venezuela, Costa Rica, and Greece.

Awards of German economy in Bulgaria for 2008 presented

 

The German-Bulgarian Chamber of Industry and Commerce announced the companies which receive the Awards of the German Economy in Bulgaria for 2008. The Newspaper Group Bulgaria is the award winner in the category of company member of the chamber, a large enterprise. It is a daughter company of the German WAZ Media Group.In the category of company member of the chamber, small or medium-sized enterprise, the award went to Filkab. The company engages in supply, distribution and trade in cables, conductors and accessories.The award of the German economy in Bulgaria for a company which is not a member of the chamber was conferred on Sun Service, which specializes in the design, building and maintenance of photovoltaic systems and passive houses, among others.The awards are conferred on companies and institutions for projects or activities assisting business contacts between Bulgaria and Germany.

Agrosector boosts economy

Agrarian branch grew by 40% in 2008, deputy minister of agriculture Bachvarova said. Bulgaria is third in EU in grain crops export in 2008. By the beginning of December wheat, barley and corn for nearly BGN 700 million were exported. Wheat crop was over 8 million tonnes, grapes and tobacco crops were very good too, agrarian minister Valeri Tsvetanov said. In 2008 subsidies in the branch exceeded BGN 800 million.

 

 

 

INVESTMENTS:

 

Invest in Bulgaria 2009 Summit features 25 top government and business leaders

The Invest in Bulgaria 2009 Summit, which is to take place at the Sheraton Hotel in Sofia on March 5-6 is going to feature more than twenty-five top business leaders and Bulgarian government officials. The Bulgaria Business and Investment Summit is organized by the European Finance Convention - a private company headquartered in Brussels, Belgium, with a second office in London. Bulgaria's largest English-language news provider Novinite.com (Sofia News Agency) is an official media partner of the event.The organizers are confident the Summit would be beneficial for all those interested in attending it as despite the global economic slowdown the even will allow its participants to see in situ the long-term investment potential in Bulgaria.The Summit aims to provide a platform for a comprehensive presentation on the opportunities available in many sectors of the Bulgarian economy.The more than twenty five speakers from both the public and private sector will contribute their views and expertise on timely and relevant topics such as the top government priorities to attract long-term investments, the banking and financial services in Bulgaria, the role of the international financial institutions in supporting strategic investments in the Bulgarian market, the perspectives of the Bulgarian energy sector, infrastructure projects development in Bulgaria, the potential for public-private partnerships in Bulgaria. The organizers are offering a 10% early-bird discount for registration and payment received by January 31, 2009, for all who would like to attend.

Sultan of Oman acquires stake in Bulgarian bank

The Sultan of Oman Qaboos ibn Sa'id bought a 30-percent stake in a Bulgarian bank. Oman's State General Reserve Fund acquired 30 percent of Corporate Commercial Bank, Bulgarian Stock Exchange officials announced. Bromak - CBB's majority owner - sold 1,8 million stock to the Luxemburg-based Bulgarian Acquisition Company II owned by the Fund. Among the Fund's acquisitions is a 33,5 percent stake in the Super Borovetz winter resort project. The deal for CCB will be sealed following the approval by the Bulgarian National Bank and the Commission for the Protection of Competition.   

Bulgaria's biggest wind generator commissioned at Somovit

 

Bulgaria's biggest wind generator was commissioned Sunday near the Northern village of Somovit. It is a German-made machine weighing 360 t with a height of 80 m and blade length of 45 m, said owner Lazarin Dochev. With a wind of 15 mps, it generates 2.5 MWh. It cost 3.2 million euro. The generator is part of a wind farm with a total of 48 generators that will be built here over the next four years, said Dochev. It will have a total capacity of 120 MW and the electricity it will produce will cost 0.186 leva/kW. The project is worth 171 million euro. The project of Dochev's company is supported by banks, the national programme for energy efficiency and an Irish government programme for reducing CO2 emissions.Three smaller wind generators are already operational at the site. A water-blessing ceremony at the site of the new facility was attended by local VIPs, including MP Roumen Petkov and Regional Governor Tsvetko Tsvetkov. In a brief address at the ceremony, Roumen Petkov said that the Bulgarian government has a will to develop geen energy and promised to lobby the government to provide the requisite infrastructure in the area of the future wind farm.

 

Power utility’s Greek unit to build wind farm

Greece-registered company NECO S.A., majority-owned by Bulgaria’s national power grid operator NEK, will build a 72 MW wind farm near the southern town of Krumovgrad. one of the company’s shareholders, Damco Energy S.A., develop a 236 MW wind power project in the same area. Both companies have applied for 15-year energy production licences with the local regulatory authorities. The State Energy and Water Regulatory Commission (SEWRC) is due to come out with a decision next week. NECO plans to have 36 wind generators up and running by early 2010. The company will seek to attract 70% of the project’s EUR 350 million price tag. Damco Energy will install 118 wind power generators close to the Bulgarian-Turkish frontier. The farm should go online by early 2010. NECO was established seven years ago to sell electricity to Greek consumers and reinvest in NEK’s transmission grid and in power plant upgrades. The utility holds half of the company’s capital, with the remainder is equally split between Prometheus Gas S.A. and Damco Energy, a unit of Greek Copelouzos Group.

Sofia waste treatment plant to stomach € 170 M

Sofia’s waste treatment project will cost EUR 17 million, under latest estimates of the municipality, said deputy mayor Maria Boyadjiiska. The cost includes installations and depots design and construction, power lines relocation, electricity and water supply and building a road to the platforms. The price tag rose to EUR 175 million from the initial EUR 131 million and was then cut by EUR 5 million after the project was reworked. The municipal authorities wanted the EU to pay 80% of the project’s cost whereas the Government was pushing for EUR 80 million to EUR 100 million of EU funding. The Cabinet’s previous idea was to build the facility on a public-private partnership.Environment Minister Djevdet Chakarov said earlier this month there would be enough money for both the installations and the depots.The ministry explained it cannot calculate the funding it will seek from Brussels before it has received the municipality’s final financial analysis.On November 27 the European Commission gave Bulgaria two months to kick off the project or else face charges at the European Court of Justice for noncompliance with the waste treatment directive.The Environment Ministry explained the Commission had in fact been asking Bulgaria to provide time limits for the project launch, adding the answer has already been prepared.

3 purification centers constructed in a Black sea municipality

Municipality Dolni Chiflik will receive 7,5 million levs from the Environment Ministry.The funds are technical help for the realization of the projects for the construction of 3 purification stations on the territory of the Black sea municipality, radio Varna reported.The facilities will be constructed in the land of Shkorpilovci and Grozdiovo villages and the municipal center.The sum of 7,5 million levs will be spent for the project of the three purification centers and choice of executors, for the project and the construction and control.The funds must be acquired for a period of 18 months.The total project - construction of purification facilities in Shkorpilovci, Dolni Chiflik and Grozdiovo amounts to 280 million levs.The sum has been given not only for facilities, but also for the realization of the so called water project, which includes the construction of a water and canalization network in the populated locations and placement of asphalt on the ditches, in which the pipes will be placed.

Glavbolgarstroy invests BGN 30 M in Borovets

Crisis doesn't stop Glavbolgarstroy Invest to continue with its apartment complex Borovets Gardens located on 30,000 sq. m, Svetoslav Liubomirov, executive director of the company, said in an interview for Pari daily. Investment in the projects amounts to BGN 30 million and plans are to be ready by the end of 2009. It will have 300 apartments, SPA centre, swimming pool, restaurant etc. Some 35% of the apartments have already been sold.

Japanese investors are looking your way

Atsushi Kaifu, Director, Central and South Eastern Europe Division, Ministry of Foreign Affairs of Japan

Mr. Kaifu, how would you comment President Georgi Parvanov's state visit to Japan?
- Planning and making this visit during the year when we mark the 50th anniversary since the establishment of diplomatic relations between Japan and Bulgaria can only emphasize our good relations. During this high-level visit we are about to review the accomplishments of our cooperation and set some goals for the future.
What are your expectations from this visit?
- I expect strengthened economic, human and cultural ties between our countries.
Will the global financial crisis have any impact on these ties?
- Bulgaria is smaller compared to the rest Eastern European countries. Nevertheless, some of the well-established Japanese companies in the region are already looking your way, due to the increasing cost of labour and demand for experts in other Eastern Europe countries. They see Bulgaria as a place to expand their business in spite of the crisis. However, the Bulgarian authorities should try and facilitate foreign businesses' access to the local market as this will eliminate the crisis as a stumbling block for Japanese investments.

Japanese companies to build wind farms in Bulgaria

Several big Japanese energy companies declared their interest in building wind farms in Bulgaria during a Tokyo-held Bulgarian-Japanese business forum inaugurated by Bulgaria's President Georgi Parvanov yesterday. "Our current strategy involves investing into alternative energy sources," participant company reps explained. Some of them even said they were planning a visit to Bulgaria to probe the local business climate and energy market. It also transpired during the forum that there were plans for launching a direct Sofia-Tokyo air route. After the presentations of the Bulgarian delegation, part of the Japanese companies also presented their business profile.      

 

 

UK fund plans 2nd logistic project in Bulgaria

Real estate investment firm Bulgarian Property Developments, which is listed on the alternative segment of the London Stock Exchange, unveiled plans to build a second logistic park in Bulgaria. The company has been granted construction permit for the scheme planned for the Danube town of Rousse.The project has so far cost EUR 2 million, and the total investment is seen at EUR 12.5 million, the company said in a statement.The logistic park will rise close to a car parts factory of French auto maker Montupet and a plant of Spanish manufacturer of wall and floor tiles Keros Ceramica, which should open in the spring.Construction works on the park will begin the April, with the first stage scheduled for completion by the year’s end.International company King Sturge is exlcusive advisor on the project, which was designed by Fletcher Architects and Bulgarian company ProConsult.

Rollplast to receive top investment certificate for window plant

 

The state investment agency will grant a first-class investment certificate to the local company Rollplast for its plan to construct a plant for production of windows in the western town of Kostinbrod , some 15 kilometres away from the capital city Sofia . Rollplast has meanwhile upgraded its investment project to BGN 71.8mn (EUR 36.7mn) from initial estimate of BGN 60mn. The company will secure 40% of the financing with own resources and will seek bank loans and leasing contracts for the remaining part. The project is expected to open 700 permanent jobs. Production is expected to start in 2010. Rollplast runs another smaller production unit in Sofia and employs some 400 workers at present. Most of its production is sold on the domestic market but the company plans expansion to Ukraine , Austria , Belgium , Italy , Greece , and Romania .

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPANIES:

 

 

Toshiba, NEC in talks to integrate semiconductor business

 

Toshiba Corp. and NEC Corp. have begun talks to integrate their troubling semiconductor operations to combat plummeting chip prices and dwindling global demand, Xinhua News Agency informed. Fujitsu Ltd. may also participate in the deal in the future since it is also looking for a tie-up partner for its semiconductor unit, which was spun off in March last year, Kyodo News said, citing sources familiar with the matter. Industry insiders believe if the three-way integration realized, it is likely to trigger a major realignment in the semiconductor industry. The talks between Toshiba and NEC are also likely to involve integrating Toshiba's system LSI operations with NEC Electronics Corp., a major chip-making subsidiary of NEC, the sources said. Toshiba and NEC have already formed an alliance to jointly develop a cutting-edge system LSI. Toshiba, the world's No. 2 maker of NAND flash memory, and other major chip-making companies throughout the industry have been reeling under a global industry-wide slump caused mainly by the spreading global recession. on Thursday, Toshiba said it expects a group largest-ever net and operating loss of 280 billion yen (about 3.09764 billion U.S. dollars) for fiscal 2008, its first red-ink in seven years.

Bulgarian state railways company BDZ, Germany's Deutsche Bahn to set up JV

 

Bulgarian state railways company BDZ and German national rail operator Deutsche Bahn will set up a joint venture company for cargo transport, local daily Pari reported on Thursday.The agreement to establish the joint venture company was reached during a visit by Bulgaria's Transport Minister Petar Mutafchiev to Berlin, Pari reported without providing further details.Only one percent of the total cargo transported between Germany and Bulgaria is carried by railways, Pari said. The players competing on the local freight railway market are BDZ, privately-held Bulgarian Railway Company (BRC), Bulmarket, fuel trader Gastrade and Bulgarian-Romanian joint venture company Unitranscom.

Agra 2009 with 800 exhibitors

So far, a total of 800 companies from 37 countries have registered for participation on 18th issue of Agra 2009 International Agricultural Exhibition to take place on February 18-22 in Plovdiv. Foreign exhibitors with the same number of companies rent by 26% more space. Bulgarian participants expand their exposition by 5%. Agritrack machine trading company from Stara Zagora is renting a whole pavilion, which is happening for the first time in the history of the event.

 

 

 

Bulgarian companies in UK set up own business club

Bulgarian companies operating in the UK set up a business association in London. At this stage it brings together 15 companies but the association leadership said they expect the total number to reach 40 a month from now. Among the mambers are financial companies, consultancy firms and companies in the construction and cleaning business. Announcing the establishment of the Bulgarian Business Club, its Executive Director Elena Todorova said that the aim of the organization is to enhance the success of its members and to consolidate the Bulgarian community in the UK.The Club will work towards making popular Bulgarian art and culture by providing opportunities for Bulgarian artists to show their work in Britain. The Club will also encourage charitable giving among its members, to support child care homes in Bulgaria.

Debts of Bulgarian companies to reach BGN 200 B in 2009

"Some important indicators make finance experts think that a crisis in Bulgaria's economy may break out this year and it may continue over the next few years," said Bozhidar Danev, Chairman of the Bulgarian Industrial Association (BIA). An analysis of BIA shows that the debts of the Bulgarian company amounted to 116 billion levs (1euro=1.95levs) in 2007 and were likely to increase drastically in 2008 and 2009. "Many companies do not have enough capital to pay the installments on their debts, which impedes their output. Had it not been for the grey sector, we could expect a serious economic downturn in Bulgaria," Mr. Danev said. To his words, last year Bulgaria's business built up debts were in the size of 165 billion levs and this year they are expected to gross 200 billion. The companies with the biggest debts are in the sectors of commerce, repairing services, real estates and construction. It should also be noted that the companies in the sectors of real estate management and construction have registered the highest increase of debts. The condition of the companies listed at the stock exchange is also quite concerning, Danev said.These companies suffer additional losses as the prices of their shares go down.

Bulgarian construction companies run out of cash

"Give me some bricks and lime and I'll give you a one-bedroom apartment", such in-kind payments have become quite common in Bulgaria's construction sector. The companies have run out of fresh money and many projects have been frozen. Instead of cash, building entrepreneurs offer seafront apartments to the suppliers of construction materials.
The Standart has been informed that the providers of construction materials have been bombarded with such offers every day. The raging global financial crisis has hit hard on Bulgaria's building sector and unfinished constructions cost the entrepreneurs heaps of money every day. As the banks have turned off the loan tap, the construction entrepreneurs are running into serious snags. They see in kind payments as the only way out. Dairies have also started paying for the milk they need with white brine cheese and yellow cheese. Experts have calculated that inter-company debt rate has grown to 165 million levs.

 

 

 

 

 

GLOBAL FINANCIAL CRISIS ANALYSIS AND NEWS:

 

 

World Bank expert: Financial, gas crises to hit Bulgaria's exports

 

The Bulgarian economist from the World Bank Simeon Djankov said Saturday that the two crises - the global financial crisis and the gas shortage crisis - might lead to a very significant retreat of foreign investors from Bulgaria.In an interview for the Bulgarian National Radio, Djankov explained it would not be the largest economies where the financial crisis started that would suffer the most from it but rather those with export-oriented economies like Bulgaria's would bear the brunt of it.In his words, the global financial crisis would reduce Bulgaria's exports by 25-30%, and the insecurity of gas supplies, which was demonstrated in the recent Russia- Ukraine pricing dispute, was in fact placing Bulgaria on the list of countries where investors would be unwilling to go. Djankov stated that the Bulgarian government should try to cut the expenditures in 2009 even though it was an elections year. He was positive that the next government of the country would be in a really tough situation, and that the crisis might continue three years instead of one or one-and-a-half unless the right policies were applied.Simeon Djankov is currently heading a World Bank team for tracking the consequences of the global financial crisis on the various economies. He is the chief economist for Finance and Private Sector in the World Bank group, and has a 13-year experience in the international institution. Djankov is best known as the creator of the Doing Business series. He has published over 70 articles in academic journals.

 

Bulgarian business climate continues decline in January 2009

The slump in Bulgaria’s business climate eased to minus 0.6 points in January from double-digit plunges in the final months of 2008, showed data of the National Statistical Institute. The institute polled managers and entrepreneurs in four key sectors including industry, construction, retail trade and services. The alarming trends highlighted by industry chiefs last year are now worrying building companies as well. As delayed payments rose from December’s levels and orders continued to decline, construction lay-offs loomed larger and more businesses ran into financial difficulties. The consensus among firms is that the price fall will continue in the short term. The index gauging retailers’ fears fell by 1.3 points from 16.6 per cent in December. Although pessimism was prevalent about January, most retail companies predicted business prospects will brighten in the next six months. However, more retailers forecast sales will remain at their current levels in the next quarter. Industry bosses are also upbeat about the coming months saying sales and production activity might move up a bit in the short term although exports will be unable to revive. More than 70 per cent of firms in the services sector believe demand will be low in the next six months. Prices are expected to stay at their present levels.

 

 

 

PM: "Global Financial Crisis finds Bulgaria with relatively stable standing and guaranteed financial stability"

 

Prime Minister Sergei Stanishev commented here Sunday that the global financial crisis "finds Bulgaria with a relatively stable standing and guaranteed financial stability". The government pursues a policy for ensuring a predictable economic environment, has an investment policy for supporting the enterprise sector, measures for the labour market and a budgeted fiscal reserve, he added. Also, the Prime Minister expects "a stable inflow of foreign investment which will support the Bulgarian economy and social sector". He said inflation this year will be lower than last and recalled that inflation was 15 per cent in 2007 and 7.8 per cent in 2008.

Bulgaria's Finance Minister: Financial Crisis has spread to real economy

 

Bulgaria's Finance Minister Plamen Oresharski said on Wednesday that the effects of the global financial crisis had already affected Bulgaria's real economy.During a conference entitled "The Hieroglyph of the Crisis Could Be Read as an Opportunity", the Finance Minister pointed out the crisis could have a positive effect by removing the inefficient companies and aiding economic restructuring.In his words, the financial crisis is also going to lead to an improvement of the financial knowledge and interest among Bulgarian companies and households.Oresharski compared the present financial crisis to the crisis in Bulgaria's banking and financial sector in the 1990s stressing the overcoming of the latter had brought to the country enormous economic growth. He predicted the same would happen after the present crisis was gone.The Finance Minister did point out, however, that it was essential for Bulgaria to preserve its macroeconomic stability. In his words, European Commission's data showed, that unlike Bulgaria, several of the old EU member states are going to have large budget deficits because of the costly anti-crisis measures they have undertaken.

 

Bulgaria's Varna cuts down budget by 11% over Financial Crisis effects

 

The municipal administration of Bulgaria's Black Sea city of Varna is going to reduce its budget by 11% because of the effects of the global financial crisis. This was announced Monday by the Varna Deputy Mayor for Finance Borislav Borisov in an interview for the Darik Radio. Thus, the new budget of the municipality for 2009 will be about BGN 200 M instead of the planned BGN 225 M because the local authorities got smaller revenue in the last months of 2008 than they had envisaged. The Municipality saw its revenue from taxes on real estate deals and from the sale of municipality-owned properties plummet. So according to Borisov, the modifications in the municipal budget would be based primarily on the reduced income indicators from the last quarter of 2008, when the effects of the global financial crisis were felt strongly. The Deputy Mayor for Finance did say, however, that the Municipality was going to keep its infrastructure investments at 2008 level. In his words, the building of kindergartens would be a priority for the local administration because of the large inflow of young families from other parts of Bulgaria settling in the city.

Investors freeze 1 million sq. m of malls

Projects for malls and commercial centres on total area of 1.02 million sq. m were frozen or denied by construction companies in Bulgaria for indefinite time, analysis of Forton International real estate company showed. At present, 17 malls and 15 big commercial centres with total renting space of 10,000 sq. m are under construction. Renting prices dropped as a result of the crisis and leaseholders will benefit in the future.

Crunch freezes 1st Pazardjik mall scheme

Local company Litos-iBuild has halted for one year work on the first shopping mall in the southern town of Pazardjik, said mayor Todor Popov.The mall, whose construction began in June 2008, was scheduled to welcome first shoppers by this autumn. However, digging work has not started yet. The investor has only removed the road surfacing material from a municipal parking lot where the shopping centre should stand. Company owner Ivo Kolushev blamed the change of plans on the global financial meltdown. The EUR 6.5 million (USD 8.6m) project, which is financially-packaged by local Investbank, is expected to spread on a 1,661 sq m site in the western part of the town. Its four floors will accommodate 120 retail outlets.

Ideal Standard, Korado cut jobs

 

Bulgarian bathroom fixtures manufacturer Ideal Standard Vidima is screening its workforce as it seeks to slash 150 jobs by the end of the month, executive director Krasimir Kolchev said. The job cuts will hit all departments of the Sevlievo-based plant, with work quality, discipline and education among the selection criteria. The firm said that this was a very tough task to fulfil but said that it was responsible not only to staff but also to its business, which has to be adjusted to a deep cut in demand caused by the global economic crisis. In the meantime, Korado Bulgaria, the local unit of the Czech producer of flat and decorative radiators, announced 85 job cuts as it moved painting and packaging operations to the Czech Republic. Korado’s majority owner plans to retool the facility’s painting and packaging units and might hire back the workers after project completion, commercial director Petar Petrov said. As clouds over the world’s finance and economy thickened, workload at Korado fell by 15 to 20 per cent in January compared to the same month of 2007, Petrov said. He said that exports slumped to 70 per cent from 90 per cent in previous years.

Bulgaria's Blagoevgrad municipality companies slash jobs over Financial Crisis

 

Six companies have filed notices about mass reduction of the number of their workers with the Regional Employment Office in the city of Blagoevgrad, Pepi Takovska, expert at the Employment Office reported.The companies are located in the city of Blagoevgrad and the towns of Petrich and Gotse Delchev. They are going to slash 500 jobs, mostly in the construction and tailoring sectors.The Regional Employment Office further informed that the discharge of workers would happen in stages, all through February and March.

 

 

 

Bulgarian banks lay off 2 000 clerks over Financial Crisis

 

The Bulgarian banks are going to fire some 8-10% of their staff because of the effects of the global financial crisis, the Standart Daily reported on Wednesday citing prognoses by banking experts. About 25 000 people are employed in the banking sector in Bulgaria but cited unofficial statistics state that some 1 500 bank clerks have been made redundant in the recent months, and their number is expect to reach 2 000.The layoffs are mostly in bank branches in small towns where the banking business is not as profitable as in the larger cities. Some of the larger banks are also optimizing their staff because of recent mergers which left them with several branches in smaller towns. They are planning the closing down of whole branches and offering the property for sale.

 

UniCredit boss: The measure is very positive and completely necessary to Bulgarian economy

 

Bankers, as well as businessmen, appreciate the first step of PM Stanishev’s plan to stabilize the state of Bulgarian economy in the conditions of a global crisis. Andrea Casini, Deputy Chairman of the MB and Chief Operative Officer at the biggest financial institution operating in Bulgaria - UniCredit Bulbank, said in an interview with The Banker Weekly, cited by The 19 Minutes Daily:“The initiatives of the Bulgarian Government are correct. Especially regarding the increase of the Bulgarian Development Bank’s capital. With the resource provided by the state, it granted financing to credit institutions that, on their part, issued loans to Bulgarian companies precisely when they needed it the most. It is a measure that had a very positive effect over the stability of Bulgarian economy. ”Last night, on a refined ceremony, hosted by the Embassy of Italy in Sofia, UniCredit Bulbank was recognized for corporate social responsibility for establishing its long-term anti-cancer program.

Loans for new business projects in Bulgaria to drop in 2009

 

The number and amount of loans for new business projects is going to register significant reduction in 2009, according to data from a research conducted by "Creditex"."Creditex" is the first non-bank based company in Bulgaria offering business and loans and mortgages.In the mean time, the needs of companies for financing are going to increase, which will lead to an increase to inter-company debt.More and more companies are going to apply for loans in order to cover their day-to-day expenses. The most important factor for the granting of a new loan would be the project's purpose while the loan price would become a secondary factor.More and more companies, consequently, would try to invest in the optimization of their business, in well thought-out projects to help them stabilize their positions on the market and to reduce expenses. The companies most likely to succeed would be the larger ones with experience and good preparedness. Those companies will continue to enjoy slow, but stable growth.In 2009, non-bank based credit grantors would become more and more important on the market because they are likely to impose less restrictions when granting business loans.