불가리아 주요 경제뉴스 ( 24 – 31 JULY 2009 )

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT ( 24 – 31 JULY 2009 )

 

 

 

Sections/headline briefs:

 

 

 

MACROECONOMY:

 

·        Bulgaria to participate in construction of Black Sea highway

·        Two photovoltaic projects approved

·        Bourgas district holds 6% of GDP

·        Bulgaria’s new energy ministry to probe into big projects

·        New Financial Minister: Bulgaria to stop funding of second NPP project

·        Interests in Bulgaria hit five-year high

·        Condition of roads in the country, bridges, tunnels

·        EBRD provide EUR 150 M loan to Kaufland for Bulgaria expansion

·        New three-masted topsail soon launched

·        Bulgaria's trade with Belgium exceeds EUR 1.3 billion

·        Bulgaria ranks at the rearmost position among EU countries on almost all indicators of progress in ICT

·        Black Sea city Burgas set to become Barcelona of the Balkans

·        Bulgaria export up by 12,5% in 2008 Y/Y

 

 

 

 

 

 

 

 

 

 

 

INVESTMENTS:

 

·        Europea to invest another €300 M in Bulgaria

·        €100 M casino to be built near Sofia Airport

·        Balmoral plans 144-MW of solar PV in Bulgaria

 

 

COMPANIES:

·        Bulgaria's H1 financial reports show companies suffering

·        Bulgarian firms take short-term loans for operating cash

·        Net sales of car batteries producer Monbat fall 21.7% y/y in June

·        CVC sole bidder for Bulgaria Kamenitza, AB InBev breweries

·        Bulgaria business newspaper Pari becomes swedish

 

 

ANALYSIS:

·        Crisis: characteristics and living standards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Articles:

 

 

MACROECONOMY:

 

Bulgaria to participate in construction of Black Sea highway

Russia approved Friday the project to build highway around the entire coastal line of the Black Sea for the amount of USD 1 B.The news was reported by the Bulgarian Information Agency, BTA.The highway will be 7,140 kilometers long and will pass through 12 countries. It will connect Turkey, Georgia, Russia, the Ukraine, Moldova, Romania, Bulgaria and Greece.The highway will have at least four lanes while construction works will include the expansion and connection of already existing roads.The project's deadline is yet to be set.

Two photovoltaic projects approved

The first two projects for subsidy of photovoltaic modules were approved last week. They will be near Yambol and were designed by Hedge Consult OOD company under Project 100, whose aim is creating competitive new private companies under JOBS programme. The installation capacity of the projects is 5 kW/p. The beneficiaries will receive BGN 20,000 non-repayable aid on condition the private capital is minimum 20% of the price.

Bourgas district holds 6% of GDP

 

Bourgas region is the leader in the private sector investments with EUR 1 billion for the last four years. The investments are mainly in the construction sector. Bourgas region attends to some 2 million tourists per year, which is 40% of all coming to the country. In 2008, the region gave 6% of Bulgaria's gross domestic product (GDP). 74% of the annual volume of sea import and export is through Bourgas port.

 

Bulgaria’s new energy ministry to probe into big projects

The Ministry of Economy, Energy and Tourism will launch an investigation into the large-scale energy projects such as the Belene nuke plant and the Burgas-Alexandroupolis oil pipeline, said the new minister, Traycho Traykov, who took over from Petar Dimitrov on Monday. Traykov assured the new ministry would not put a single project on standby before it studies its economics and the legislative provisions. “Unfortunately, one could work effectively only for 20 hours and therefore I could not provide a concrete timeframe for checking the large-scale infrastructure projects,” Traykov explained, adding that most importantly they should be profitable for Bulgaria and benefit the Bulgarian citizens. The new minister said he has already proposed the members of his team but the candidacies are still pending approval and his deputies are most likely to be announced by the end of the week. “My colleague definitely takes up the toughest ministry at a very tough time,” said Petar Dimitrov. Excluding the effects of the economic turmoil, Bulgaria boasts some of the most favourable economic climate, he stated. Traykov turned out to hold a different view, saying one of the top priorities of his ministry will be polishing the country’s reputation as a symbol of corruption, which is seriously undermining business climate. Petar Dimitrov expressed hopes the new administration will preserve the structure of the Bulgarian Energy Holding (BEH), which now lumps together the country’s main energy assets, saying it “very much facilitates energy management in the country.”“BEH should be listed on the stock exchange and there is no question about it; the problem is that this cannot happen immediately,” Traykov said. He was adamant that the Sofia heating utility should go private but provided neither timescales, nor possible methods.

New Financial Minister: Bulgaria to stop funding of second NPP project

The project for the construction of the Belene Nuclear Power Plant is not lucrative and especially in a time of crisis the State should not give guarantees or budget funding for it, future Bulgarian Minister of Finance, Simeon Dyankov told Novinite Dnes d According to him, is a private investor wants to build the NPP and thinks it is a profitable project, the government should not interfere, but only set the clear rules and regulations in order to make the project successful. Dyankov points out that the outgoing government has put aside some BGN45 million (EUR225 million) for the project but it is not clear what the money is intended for. So far over EUR550 million have been invested in the project, before construction work at the site had even begun. According to Dyankov only EUR180 million of them have been used for actual construction works, while the rest went to consultants. Sergei Stanishev’s government has opened a EUR1 billion hole in the budget, Dyankov says. The future minister expects another hole of the same volume to appear in weeks. ‘We have entered a deficit that is dictated by irresponsible spending in the last three to four months by the government. In a time of crisis it is good to spend, but for things that keep high wages and jobs’, he said. According to him these EUR2 billion that the government has spent have not had a good impact in the fight against the crisis and the new government will be the first to start implementing anti-crisis measures.

Interests in Bulgaria hit five-year high

Consumer credit interest rates in June hit record-breaking heights. The average cost of newly-drawn lev (1 euro = 1.95 levs) loans has risen to 14.22 percent, Investor.bg reported citing Bulgarian National Bank data. This is the highest rate since February 2004 and, respectively, a record one in the past five years and four months. The average interest for consumer credits in euros was 11.64 percent. Altogether, 177 million levs were loaned in June 2009, which represents a 66-percent slide compared to the previous June’s figures. Out of this year’s June credits, 83 percent were loaned in levs; the rest were in euros and US dollars, and the interest rates for the latter currencies were below the skyrocketing rates of the last few months. The overall volume of June’s household and company credits decreased by 53 percent on an annual basis to reach a value 1,11 billion levs, Investor.bg figures point out. In the last eight months, the credit downturn on an annual basis vacillates between 36 and 62 percent. The volume of company crediting went down to 796 millions levs - or by 44 percent - in June 2009. Out of this figure, 84 percent were lent in euros at an average interest of 8.7 percent, which is close to April and May 2009 and June 2008 figures, and less than the 9.25-9.34 percent of last year’s October and November. The June business credits in levs, represented 15 percent of the overall volume and were at interest of 10.87 percent, or nearly record-breaking in terms of cost.  

Condition of roads in the country, bridges, tunnels

Some 45 per cent of bridges which are less than 20 metres in length should be repaired over the short and medium term, and some bridges need urgent repairs, Lazar Lazarov, Director of the Central Laboratory for Roads and Bridges with the Road Infrastructure National Agency (RINA) told BTA.Over 80 per cent of bridges were built after World War II. According to 1993 Technical Supervision and Maintenance Guidelines of RINA, bridges are subject to general reviews every five years after launch into operation. Between 2003 and 2006, in the framework of a national campaign, all bridges were examined and assessed. According to Lazarov, however, the examination did not cover 1,800 bridges from the local roads network, which are not managed by RINA but by municipalities.Lazarov recalled that a permanent commission for bridges along national roads was set up in the middle of July. By the end of August, the commission is to prepare a comprehensive analysis on the condition of bridges in the country and to propose to the leadership measures to improve their operational condition.Safety requirements for road tunnels have been introduced by Directive 2004/54/EC of the European Parliament and of the Council of April 29, 2004, Lazarov recalled. A compliance check has found that there are certain discrepancies with the Directive, and they are to be removed by 2014.Lazarov also said that new agreements on current and winter-time maintenance of national roads will be valid for four years. The RINA Supervisory Board is in a process of establishing of type documentation for participation in an open procedure for assigning a public procurement contract, Lazarov said. Currently, the approved budget of the Operation and Maintenance of the National Road Network Directorate is some 130 million leva. A proposal has been made to increase the directorate's budget to some 160 million leva. Lazarov could not say whether the increase would happen in practice.

EBRD provide EUR 150 M loan to Kaufland for Bulgaria expansion

The European Bank for Reconstruction and Development (EBRD) will provide a loan of EUR 15O M to finance the expansion of hypermarket chain Kaufland into Bulgaria and Romania.Kaufland, owned by Germany's Schwarz Group, is one of the leading German hypermarket operators and the number two discount retailer in Europe, operating discount stores such as Lidl and Kaufland in 25 countries.The proceeds of the EBRD loan will be used to finance the construction and operation of 20 stores in Romania and 13 stores in Bulgaria, which will be located particularly in smaller disadvantaged towns with lower purchasing power.The project will benefit consumers in smaller urban centres of Romania and Bulgaria by offering a wider variety of choice at competitive prices. It will also benefit local producers by supporting strong links with suppliers in Romania and Bulgaria."This loan is especially relevant in the current economic times. The benefits of expanding a state-of-the-art discount retail operator such as Kaufland to some of the more remote regions will result in increased competition, greater choice and more value for money," said Gilles Mettetal, EBRD Director for Agribusiness.In the agribusiness sector, the EBRD has directly committed more than EUR 5 B in over 340 projects across central and eastern Europe and the Commonwealth of Independent States.

 

 

New three-masted topsail soon launched

A new Bulgarian three-masted topsail schooner will be launched within ten days, reported from MTG Dolphin PLC, the second largest Bulgarian shipyard after BulYard. So far Bulgaria possessed only one three-masted sailing ship the legendary Kaliakra built in Gdansk in 1981.  The new sailing ship will most probably be named Varna and it will be christened in an official ceremony conducted by Ivo Lazarov long-distance sailing commander and manager of the Varna owner Topsail OOD. The new marine beauty will avail of 11 deluxe berths, each of them with a separate bathroom capable of holding 15 crew. She will be 54.4 metres long, for comparison the Kaliakra is 52 metres and will have 4 metres draft. The Varna will move at top speed of 16 knots. The Kaliakra used to win races with maximum speed of 10 knots in her sails. The Varna will have a special teak-covered deck. She will be equipped with air-conditioning system and a water-maker.

 

Bulgaria's trade with Belgium exceeds EUR 1.3 billion

 

Trade between Bulgaria and Belgium exceeds 1.300 million euro, Belgian Ambassador to Bulgaria Mark Michelsen said on Monday, taking a question by BTA. Currently, exports from Bulgaria to Belgium predominates in two-way commodity exchange, the diplomat specified. The same amount, 1,300 million euro, is Belgian investment in Bulgaria. This amount gives Belgium the seventh place among foreign investors in Bulgaria, the Ambassador said. Belgian investors have created some 15,000 jobs in Bulgaria.Ambassador Michelsen, accompanied by the Belgian owners of the Belogradchik Mining Company, is paying an official two-day visit to Belogradchik and Vidin. The Ambassador said that the mining company is a typical example of cross-border cooperation as it will operate on both sides of the Bulgarian-Serbian border, in Belogradchik and Zajecar. The company will operate in the field of new technologies for coal recycling.Some 170 people currently work in the Serbian coal mine of Vrska Cuka. Plans are also to reopen the mine in the vicinity of Kiryaevo in Bulgaria, said Belogradchik Mayor Emil Tsankov. Some 150 jobs will be created in the Bulgarian mine. The Belogradchik Mining Company will be the largest Belgian investor in Northwestern Bulgaria and Eastern Serbia, where it will develop coal-mining, Tsankov also said.Ambassador Michelsen is to meet with local leaders. on Monday afternoon, he will attend the signing of a clean technology agreement between the Belogradchik Mining Company and the Vidachim chemical plant in Vidin. The two enterprises have agreed on the supply of 10,000 tonnes of coal to the thermal power plant at Vidachim in the space of 7-8 months. The coal will be extracted from the Serbian mine of Vrska Cuka.

 

Bulgaria ranks at the rearmost position among EU countries on almost all indicators of progress in ICT

 

Bulgaria is the last place among all 27 EU countries according to almost all indicators in the European Commission (EC) for evaluation of progress of Member States in the Information and Communication Technology (ICT). Prof. Rumen Nikolov, lecturer in the Faculty of Mathematics and Informatics at Sofia University St. Kliment Ohridski said in an interview with FOCUS News Agency As an example one of these indexes is the penetration of broadband internet access. This is a new, electronic "highway" of Bulgaria to Europe and the world. It can open a shortcut of the Bulgarian IT business to over 107 million subscribers in the European Union and to allow the Bulgarian authorities to work more closely with the administration of the European Union, and the Bulgarians in the country and abroad - to involve actively in social and economic life of the country. Opportunities and access to education, administrative and health services, researches, etc., will increase Prof. Rumen Nikolov said. In his words the development of broadband in rural areas was one of the European Commission measures for overcoming the effects of economic crisis and the EC allocated the amount of over EUR 1 billion of which about EUR 29 million were destined for Bulgaria.

Black Sea city Burgas set to become Barcelona of the Balkans

Bulgaria's Black Sea city Burgas is going to have a new urban development plan that will make it look similar to the Catalan city of Barcelona.The plan is authored by a group of architects from the Geostrich civil organization, and includes extensive forestry and greenery projects.It provides for moving the industrial zones to the north and west of the city, and turning the Southern Industrial Zone into a huge park similar to the sea garden in the other Bulgarian Black Sea city of Varna.Several more new parks, bicycle alleys, and green zones are also planned, as is a new pedestrian and administrative zone called Super Burgas.The oil depositions of the nearby huge oil refinery Lukoil Neftohim are to covered with soil and plants, and also turned into a new park.The project provides for the construction of a new golf course and tourist zones, as well as of three beltway roads to divert the heavy traffic from the central parts of the city. A city railway is going to connect the downtown to the Burgas Airport.The urban development plan also envisages spots for photovoltaic energy parks, and extending the natural gas distribution network in Burgas.

Bulgaria export up by 12,5% in 2008 Y/Y

The Bulgarian export rate increased by 12,5% in 2008 year-on-year, while the import went up by 14,8% for the same period.According to conclusive information of the National Statistical Institute (NSI), Bulgaria's trade balance for 2008, compared to 2007 is negative and amounts BGN 16,814 B.The most significant increase in export rate in 2008 is with Cyprus (by 87,7%), Romania (66,9%), the Czech Republic (40,2%), Holland (32,6%), and Poland (30,6%).On the other hand, the biggest increase of import from the EU is from the following countries - Finland (74,6%), Latvia (30,9%), Romania (42,3%), Poland (24,5%), and the Czech Republic (22,8%). Import from countries outside the EU most significantly increased from Canada (94,4%), and Japan (66,1%).Bulgaria exports mainly foods, fats, oils and wax, machines and equipment, while the import consists mostly of soft-drinks, spirits, tobacco, fats, oils and wax, and mineral fuels.

 

 

 

 

 

 

 

 

 

INVESTMENTS:

 

 

Europea to invest another €300 M in Bulgaria

The owner of the Spanish Europea Pablo Garido and the mayor of Polski Trambesh municipality Georgi Chakarov signed a memorandum for the construction of a logistic park near the town in northern Bulgaria. It will be located on 300 decars owned by the municipality. The plans have been discussed since the end of last year. The project is to build 720 warehouses on minimum 500 sq. m each, a parking lot for 4,000 cars, a bank hall, offices, a hotel, catering establishments. The investment is worth EUR 300 million.
This is the third logistic park the company is building in Bulgaria, the other two being in Elin Pelin and Bobov Dol. Europea is a subsidiary of Hestitram Group, which ranks second in Europe concerning realisation of infrastructural projects. So far, the company has invested EUR 200 million in Bulgaria. The location is chosen because of its strategic position: on the way from Rousse to Svillengrad, which is part of the international corridor No 9, and close to the future Hemus highway. This will make it a distribution and administrative centre for the region, Pablo Gariba pointed out. The construction of this logistic park results from the active work of the municipality in attracting foreign investments, mayor Chakarov said. The Spanish project has great importance for the country and with the help of Bulgarian-Catalunian Chamber we hope to attract more investments, he added.

€100 M casino to be built near Sofia Airport

The construction of a big casino near Bulgaria`s Sofia Airport may start in a few months, said Boyan Mihaylov, chairman of the Bulgarian-Russian investment forum. To his words, three big Russian companies have already shown interest in the project, which costs 100-120 million euros. This project is very attractive to the Russian investors, especially after the July 1st gambling ban introduced in their country, Mihaylov added.

Balmoral plans 144-MW of solar PV in Bulgaria

Balmoral Capital Holdings Inc., the financing arm of Balmoral Bulgaria SPV, an integrated solar power plant development company has signed a 25 year agreement with Apex Solar to organize approvals for 18 photovoltaic power plants in Bulgaria. The solar farms are currently in the early stages of the development process and panel delivery is scheduled for early 2010, the online edition Renewable Energy World reported.Plants will range in size from 1-5 megawatts (MW), with a total expected capacity of 144 MW.Each plant designed will be organized by Apex Solar. The company plans to build 130-144 PV plants in Bulgaria and move to other European markets by 2011."We are looking for competitive bids on state-of-the-art high performance PV panels and the results of the winning bid will be given in the next 30 days. There are so many high technically performing panels with great financial returns. It is hard to settle to one manufacturer," said Rodney Kincaid, managing partner of Balmoral Capital and CEO of Balmoral Financial.

 

COMPANIES:

 

Bulgaria's H1 financial reports show companies suffering

The latest round of first-half financial reports released by Bulgarian listed companies revealed battered sales, losses or plunging profits.Car battery maker Monbat saw a 50 per cent drop in sales, matching a decrease in its profit. Sales in the second quarter are expected at 21.7 million leva and the pre-tax profit is seen at 3.9 million leva.Machine builders fared even worse. Order intakes for the period plummeted by 50 per cent to 60 per cent from the first six months of last year, and efforts to streamline costs to counter the crisis have failed to prevent losses.Farm machines maker Sparky and power tools maker Sparky Eltos waded in red despite the sweeping cuts in expenses.The two companies have cut working hours and have saved on heating bills following the production halt in December and January.Moreover, they have put on ice all costs that are not linked to direct production operations. Sparky Eltos is expected to benefit from the lower fuel prices introduced by local distributor Lukoil Bulgaria. Sparky has slashed paychecks by 25 per cent and downsized 37 per cent of its workforce. It now has 509 people on the payroll, having moved about 60 staff to one of its subsidiaries, real estate company Prista Park.The two companies have also scrapped supervisory boards’ pay for this year.The companies within Stara Planina Hold are also bracing themselves for a sharp decline in sales but profits for the first half are expected at the holding company, hydraulic motors manufacturers M+S Hydraulic and Hydraulic Elements and Systems, and Elchim Iskra.The companies’ consolidated sales have tumbled 61 per cent year-on-year in the six months, a trend that is expected to spill into July as well.

 

Bulgarian firms take short-term loans for operating cash

The new corporate loans handed out by Bulgarian banks in June are short-term, for operating purposes and denominated in euro, according to central bank figures. The total volume of business loans was BGN 788.6 million, a sharp decline from BGN 1.401 billion at the same time of 2008 prompted by stronger economic headwinds showing no signs of abating any time soon. Ninety-eight percent of the new business loans given in June are due back within one year, a sign they are drawn to secure short-term operating funding. The rickety economy is forcing companies to postpone investments while banks have grown increasingly cautious about projects to fund. Bankers say there is enough liquidity but demand for financing is soft. This adds to small numbers of projects judged sufficiently reliable and low-risk to bankroll. In fact there are now investment loans flowing at the moment and cash is being lent only for operating needs as companies are putting off investments for better times, experts explain.Banks are tapping credit lines to make business loans -- mostly to small and medium-sized enterprises -- from international institutions such as the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB) as well as the Bulgarian Development Bank (BDB), which got a BGN 500 million capital injection by the former government to extend dedicated lines of credits to commercial banks. on Monday, the EIB said it has a agreed a EUR 1.2 billion credit line to UniCredit Group to finance SMEs in Central and Eastern Europe. The money will be divvied up between the group’s divisions in Bosnia and Herzegovina, Bulgaria, the Czech Republic, Croatia, Latvia, Hungary, Poland, Serbia, Romania, Slovakia, Slovenia and Turkey.

Net sales of car batteries producer Monbat fall 21.7% y/y in June

 

The net sales of the country’s largest car battery producer Monbat fell by 21.7% y/y to BGN 8.1mn (EUR 4.2mn) in June, according to a note posted on the local stock exchange. Thus, the pace of decline of the company’s sales continued slowing down after the 52.3% y/y drop in May, 55.1% y/y decrease in April and 60.3% y/y slump in March. The company’s net sales halved y/y to BGN 46.7mn in H1, of which 88.1% (BGN 41.2mn) from sale of final production. The H1 sales appeared 1.6% below earlier announced plans. The pre-tax profit of the producer fell by 14.1% y/y to BGN 1.4mn in June and by 50.5% y/y to BGN 7.6mn in H1 (being in line with projections). Monbat management has few days ago decided to provide EUR 0.7mn for raising the capital of its Romanian subsidiary Monbat Recycling by 38.7% to EUR 2.51mn.

CVC sole bidder for Bulgaria Kamenitza, AB InBev breweries

Anheuser-Busch InBev, the world's largest brewer, which owns two units in Bulgaria, has received only one bid for its central and eastern European operations from CVC Capital Partners, a London-based private equity group, according to reports. Kohlberg Kravis Roberts and TPG, the US private equity groups, had expressed interest in the assets, which include 11 breweries in seven countries, including Bulgaria.But only CVC submitted a bid, worth about EUR 1 B - EUR 1.5 B by this week's deadline, the Financial Times reported.Bulgaria is one of seven countries in Eastern and Central Europe, where the world's largest brewer Anheuser-Busch InBev (ABI.BR) is considering divesting its operations.Eleven breweries producing a total of 15 million hectoliters of beer a year in Bulgaria, Romania, Hungary, Croatia, Czech Republic, Serbia and Montenegro, are part of what has been called a "packaged" deal to be sold as a whole.Kamenitza AD, part of Interbrew, which was renamed to InBev after the merger of Interbrew and AmBev. is the second biggest brewery in Bulgaria.Its diverse brand portfolio includes international Stella Artois and Becks and local Kamenitza, AstikA, Burgasko , Pleven, Slavena.AB InBev was created by the merger of Belgium's InBev and the iconic American brewer Anheuser Busch last fall. The combined entity now has a market capitalization of EUR 44.6 B, according to the company's Web site.A company representative for AB InBEv has declined to comment.

Bulgaria business newspaper Pari becomes swedish

The Bulgarian business newspaper "Pari" has been sold to the Swedish Bonnier Business Press.Valentin Panayotov, owner of Business Media Group, which publishes the Pari Daily, sold the last 50% of the group to the Swedish company.Bonnier Business Press bought 50% of Business Media Group in 2005, and now it acquired the rest of the shares.The Swedish company publishes newspapers, magazines, and books in Sweden, Denmark, Poland, Slovenia, Russia, Austria, Lithuania, Latvia, and Estonia.

 

 

 

 

 

ANALYSIS:

 

Crisis: characteristics and living standards

Positive results in the Bulgarian economy will occur in 2012-2013 at the earliest, and the labour market will begin to stir a year after the end of the financial and economic crisis, according to Mika Zaikova, economic adviser of the Podkrepa Confederation of Labour.Industrial production has declined by over 50 per cent, and the decline in construction is 56 per cent. The expected most optimistic scenario is for GDP growth to be zero, and the most pessimistic scenario is for 2.5 per cent to 3.6 per cent deficit, which is quite dangerous, Zaikova said.Bulgaria possesses a considerable fiscal and foreign currency reserve, but it is melting at a high speed. "We are still far from the critical values for the foundations of the currency board arrangement, but in half a year the foreign currency reserve has melted by some 6,500 million and urgent measures need to be taken, Zaikova commented.By the end of this year, unemployment will probably reach 14-15 per cent. Between 100 and 150 companies go bankrupt monthly on average.The proceeds of foreign investors are "at a catastrophic level and they are not likely to improve." Bulgaria is not attractive for foreign investment due to the lack of high technologies and qualified experts, and the reason is that employers do not invest in the qualifications of their employees, the expert believes.The monthly cost of living of a member of a household of four members (two adults and two children) in the end of June reached 480.70 leva, which means that a household should have 1,923 leva a month in order to maintain a healthy diet according to the norms of calorie content of food, to maintain its expenses for the home, to buy clothes and pay for education, Lyuben Tomev, Director of the Institute of Social and Trade Unionist Studies (ISTUS) with the Confederation of Independent Trade Unions in Bulgaria (CITUB), told a news conference. Sales of foods and nonfoods are declining, employment is also declining and incomes are kept unchanged, and a policy is followed of freezing wages, Tomev said. According to him, these indices increase the fears of Bulgarians about what will happen until the end of this year. In the first four months of this year, insured persons decreased by 140,000 people at the National Social Security Institute and at the National Revenue Agency compared to the like period of 2008, Tomev added. In his words, the decrease of insured persons means that unemployment is increasing. Since the end of last year, some 100,000 people have been laid off according to CITUB data, and how many of them have started work again is impossible to say, Tomev said. According to the ISTUS analysis, in terms of unemployment in May Bulgaria remained below the average level in the EU. In the 27 countries of the EU, unemployment in May averaged 8.9 per cent, and in Bulgaria it stood at 6.5 per cent. In the first five months of 2009 there were no clear changes in the dynamics and structure of household incomes which would serve as an indication of the approaching crisis, ISTUS said. A similar trend was observed with the average wage in Bulgaria. After the record large nominal increases of wages by 19.7 per cent in 2007 and 21.7 per cent in 2008, in the first quarter of 2009 the increase compared to the first quarter of 2008 was 16.3 per cent. In a comment on Friday, the Economic and Social Council (ESC) outlined the following measures: building of modern transport infrastructure, separation of the State from the direct management of commercial corporations, particularly monopolies, and liberalization of the energy market according to the requirements of EU regulations.The groups on which future government policies and measures should focus, according to ESC, are real sector business, consumers and their households, as well as social security, public health and education. ESC experts note that employers should not adhere to a policy of freezing or containment of wages as an unconditional anticrisis measure. According to ESC, the link between productivity and wages has been practically broken and the share of the shadow economy is increasing. Therefore ESC recommends preparation and working out of scenarios for a deficit national budget in 2010."Our main message is a new integrated anticrisis programme," said Plamen Dimitrov, Deputy Chairman of ESC and Vice President of CITUB. According to him, some 500,000 people should go through urgent measures of training and retraining. He recommended special treatment of people who return from abroad - tens of thousands of the 180,000 Bulgarians working in Spain have already returned to Bulgaria. These are people with acquired qualifications, and employers can provide work for them in this country.ESC experts assess the decrease of social security contributions as risky for the social security system. Dimitrov recommended that ESC propose setting the minimum monthly wage at 60 per cent of the average monthly wage, which is currently 560 leva. Such is also the recommendation of the EU, Dimitrov added.