Bulgarian Telegraph Agency (BTA), 96-11-27

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From: Embassy of Bulgaria <[email protected]>

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

27 November, 1996

CONTENTS

[01] CABINET WILL INFORM IMF THAT BULGARIA HAS NO OBJECTIONS TO THE INTRODUCTION OF A CURRENCY BOARD

[02] PM VIDENOV: THE ALTERNATIVE TO A CURRENCY BOARD IS HYPERINFLATION

[03] OPPOSITION COMMENTS P.M. VIDENOV'S STATEMENT ON CURRENCY BOARD

[04] DEPUTY P.M. ROUMEN GECHEV: CURRENCY BOARD NO RADICALLY NEW ECONOMIC PROGRAMME

[05] LAW TO PROTECT ANIMALS

[06] OPPOSITION MP ACCUSES TRANSPORT MINISTER OF CORRUPTION, BREACH OF LAW

[07] BULGARIAN MASTERPIECES AT NATIONAL ART GALLERY

[08] "MADE IN BULGARIA" EXHIBITION

[09] PRICE HIKES - MURDEROUS ?

[10] TWO MILLION BULGARIANS LIVE ABROAD

[11] TUESDAY NEWS BRIEFS

[01] CABINET WILL INFORM IMF THAT BULGARIA HAS NO OBJECTIONS TO THE INTRODUCTION OF A CURRENCY BOARD

In a letter to the IMF, the Government will explain that Parliament will probably decide on the introduction of a currency board in the first days of 1997. "We will also remind the IMF that in the interim Bulgaria will need help for its financial stabilization and will count on IMF support proceeding from the agreements reached between Bulgaria and the IMF this summer," the prime minister said.

Videnov said that at present there is no political force categorically against the introduction of a currency board. "For me it is enough that not a single political force declared itself for dissolving the board in future because it will have to exist for years to come," the prime minister explained. The opposition is wrong in its belief that currency boards cement cabinets, this mechanism costs central banks and cabinets a lot, often their terms in office, the prime minister said.

"I welcome and share the good will of president elect Peter Stoyanov to restore good relations between President and Government which deteriorated during the term of incumbent President Zhelyu Zhelev," Videnov also said.

President elect Peter Stoyanov told journalists after the meeting that a currency board should be introduced by a cabinet which enjoys the full support of its party, expresses the views of the major political forces and enjoys public confidence. The currency board will survive this and maybe the next cabinet as well, Stoyanov believes. The currency board will be successful only if accompanied by privatization, radical reform and strict tax discipline.

At the meeting Stoyanov inquired of the progress of the consultations and events related to the proposal to introduce a currency board in Bulgaria, of how the national budget will be balanced next year and the source of the foreign exchange funds needed for pegging the national currency to the US dollar or the German mark, and whether the funding of the army would be guaranteed. "I cannot say that I am fully satisfied with the talks but the answers I was given were in good faith. I understand the difficulties of the Cabinet which still needs to establish part of the parameters related to the introduction of a currency board and is seeking the best way to it," president elect Peter Stoyanov also said.

[02] PM VIDENOV: THE ALTERNATIVE TO A CURRENCY BOARD IS HYPERINFLATION

Videnov said that broad circles in the BSP were more inclined to accept a course towards encouraging production and export, restoring traditional eastern markets and even a moratorium on foreign debt payments. This, however, passes through hyperinflation, Videnov said. He added that at the extraordinary congress of the BSP due in December he would urge the Socialists "to come down to earth, to shed illusions and accept the realities." Videnov described the demands of 19 prominent Socialists of 20 days ago for "a new cabinet and a new policy" as being at "odds with the realities in this country". "As far as I can see some expected the banking system to act as a stabilizing factor in the ensuing political instability cabinet resignation and parliamentary crisis. This is absurd. The banking system has been a destabilizing factor for months," Videnov said. "No programmes for the development of agriculture, power engineering, telecommunications, etc (such programmes were demanded in the letter of the 19 Socialists) can be drafted before solving the basic problem - does this country have a currency, does it have simple banking stability or not."

[03] OPPOSITION COMMENTS P.M. VIDENOV'S STATEMENT ON CURRENCY BOARD

Videnov's statement on Monday is his latest cynical attempt to concede the obvious: that his failed policy has led to an extreme measure like the currency board, the document says. The united opposition claims this act is part of a pre-congress tactic which is lacking in responsibility and political ethics.

Without prior talks, without firm external support, without a national consensus and with an encroachment on the gold reserves, a currency board is doomed to failure. Zhan Videnov is trying to mislead the Bulgarian people and the multilaterals with an empty statement, only to settle intraparty accounts and remain party leader, says the declaration of the United Democratic Forces.

A nationally responsible decision on the issue can be made only after a broad, serious debate in Parliament, according to the opposition. If the parliamentary debate is to produce results, the United Democratic Forces should complete their consultations in and out of the country first, the declaration says.

The opposition argues the introduction and success of a currency board hinge on an admission of the utter failure of the Socialist Party's policy, the election of a new Governing Board of the central bank, and early parliamentary elections in the near future.

A currency board may be introduced while the present government is in office if early parliamentary elections are fully guaranteed, UDF floor leader Yordan Sokolov told the news conference. The IMF loan should be large enough to ensure the foreign exchange reserves will not be depleted after the debt service payments due in 1997, he said.

[04] DEPUTY P.M. ROUMEN GECHEV: CURRENCY BOARD NO RADICALLY NEW ECONOMIC PROGRAMME

The introduction of a currency board will mean a new monetary policy for which the responsibility will lie with a unit of the Bulgarian National Bank (BNB), he said. The Bulgarian lev will be pegged to a Western currency. The tradition in Bulgarian foreign trade calls for pegging the lev to the US dollar, Gechev said. According to him, however, the options of pegging the lev to the German mark or a basket of currencies (ECU) should also be carefully discussed with a view to joining the European Union in the future.

The projected annual inflation in 1997 under a currency board would be a maximum of 30% Gechev said. According to him, the interest rates will be at levels slightly above the market interest rates in Western Europe. Investments will pick up in as late as the second half in 1997, he said. The problem with the banking system will remain open after the adoption of a currency board, only the viable banks will survive under the new conditions and the end of refinancing on the part of the BNB.

[05] LAW TO PROTECT ANIMALS

An Animal Protection Bill sponsored by business party MP Orlin Draganov was submitted two years ago. It has not made its way through Parliament yet despite support by 13 members of the Bulgarian Academy of Sciences and the public. However, MPs of the medical profession object to a possible ban on experimenting on animals. The sponsor claims the Bill is in line with the UN Biodiversity Convention adopted by the 1992 Rio Summit.

[06] OPPOSITION MP ACCUSES TRANSPORT MINISTER OF CORRUPTION, BREACH OF LAW

Sougarev disclosed contracts not to charge interest on overdue payments, signed by Stamenov in November 1994, between the Bulgarian State Railways (BDZ) and the Yugoslav rail carrier, which are disadvantageous to Bulgaria. The contract defrauded the state by about USD 3 million. A contract on compensations for damaged grain carriers also proved to be a disadvantageous deal. Apart from Stamenov, these instances of defrauding the state also involved senior BDZ officials whom Sougarev described as "railway mafia". "I do not think that Minister Stamenov can remain at his post. He and the senior civil servants connected with him should be held legally responsible," Sougarev said.

Sougarev said also that he possesses data on corruption charges against the President of the Committee of Tourism Vassil Velev.

Sofia, November 26 (BTA) - Transport Minister Stamen Stamenov denied in a special statement on Tuesday evening allegations of corruption and wrongdoings made the same day and earlier by opposition MP Edvin Sougarev. He denied Sougarev's allegation that in November 1994 he forgave the Yugoslav railways interest payments. At the time the Yugoslav railways had not reviewed their obligations after the disintegration of the former Yugoslavia. The amount of the principal was not known, Stamenov said, adding that it was agreed to calculate interest only after the principal was computed.

Stamenov described as fully unsubstantiated Sougarev's allegation that as director of Control, Revenues and International Accounts with the BDZ he was instrumental in arranging the sale of grain wagons to the Yugoslav railways in April 1993. At that time the Control and Revenues Directorate had nothing to do with the signing of sales contracts, Stamenov said.

Stamenov denied as false and malign Sougarev's allegation that in the summers of 1993 and 1994 protocols, were implemented in violation of the international sanctions against Yugoslavia, causing serious damage to BDZ. The transport minister said BDZ had not lost a single dollar and had not been involved in any deals leading to sanctions- busting.

[07] BULGARIAN MASTERPIECES AT NATIONAL ART GALLERY

Private collectors gave the public a rare view of Vassil Stoilov's "Peasant with a Jug", shown for the first time in 70 years, Ivan Milev's "Portrait" of writer Anna Kamenova and several paintings of Papazoff's French period. National Art Gallery Director Rouzha Marinska said the exhibit shows the place of great Bulgarian painters in European art. The project is financed by the European Commission and, being part of international cultural exchange, the exhibition will tour Europe.

[08] "MADE IN BULGARIA" EXHIBITION

All sectors of Bulgarian industry are represented over an area of more than 1,000 sq m. Big state-owned companies like Neftochim of Bourgas, Chimko of Vratsa, Stomana of Pernik and a number of smaller private manufacturers are taking part. Foreign manufacturers in Bulgaria like Ytong, Kraft Jacobs Suschard, Danone, Nestle also have stands.

"The exhibition seeks to bring together the manufacturers in the country, so that they could make fruitful exchanges, both informational and business, as well as bring the consumers in the country closer to these manufacturers," NPC Director General Hristo Droumev said, commenting on the purposes of the exhibition. In his view, manufacture should be the key priority for both the state-owned institutions and for the politicians. "A country cannot cope with economic difficulties if it does not manufacture and unfortunately it seems this fact has not been given the due attention," says Droumev. "My heart aches when I look at the participants in the exhibition. They have to overcome dozens of difficulties, the system of taxation is after them, the customs duties are not favourable for the manufacturers, the advertising conditions are difficult too," Hristo Droumev said, interviewed for the National Radio.

The exhibition will offer also a number of seminars to discuss economic problems, problems of taxation, patents, finance and book- keeping, international quality requirements. The most original exhibits will be receive Golden and Silver Lion awards. According to preliminary figures, 65 per cent of the participants are private companies and 35 per cent are state-owned. The private sector accounts for 28 per cent of the total industrial production in the country.

[09] PRICE HIKES - MURDEROUS ?

NSI, however, says living standards have deteriorated three-fold since 1990. The difference in the CITUB and NSI figures are due to the different methods used, "Demokratsiya" writes.

According to CITUB figures, the population's real incomes dropped 40 percent in April-September 1996. At present the average working wage of 17, 879 leva equals some 50 US dollars at the current exchange rate. Since January 1996 the cost of living has risen 195.1 percent, NSI said in October.

A month ago "Continent" wrote that 86 to 87 percent of the people can be considered poor, 10-12 percent have average incomes and the rich account for 3-4 percent of the population. The average pension accounts for only 28.6 percent of the average salary. The consumption of staple foods has dropped since 1990: of bread by 10 percent, of meat and meat preparations by 20 percent, of fish by 33 percent, of yoghurt by 17 percent, of cheese by 22 percent and of fresh fruit by 46 percent. The tendency is towards an increased consumption of potatoes and bacon.

[10] TWO MILLION BULGARIANS LIVE ABROAD

Mr Ganev stressed the need of an explicit legislative basis in formulating the national policy on expatriate Bulgarians. The passage of important legislative acts such as an Expatriate Bulgarians Act, a new Nationality Act, a new Residence of Aliens in Bulgaria Act and its implementation regulations is forthcoming and will assist the repatriation of Bulgarians.

Projects for cross border cooperation with Serbia and Macedonia are currently being discussed at the Ministry of Regional Development and Construction, a representative of this Ministry said at the meeting. These projects attach new priorities to Bulgaria's contacts with the Western Outlands (a territory in Southeastern Serbia which Bulgaria lost to that country under the 1919 Treaty of Neuilly as a result of its defeat in World War II) and provide for the opening of the border and the setting up of a new border checkpoint at Belogradchik. An agreement on cross border economic cooperation with the Western Outlands is being discussed at the Ministry at expert level.

Mr Ganev said that the Bulgarian language is not being taught as a mother tongue in the Western Outlands and in many places the number of Bulgarian language classes is inadmissibly small. The Bulgarian side has addressed an official request for restoring this constitutional right of the Bulgarians in the Western Outlands.

[11] TUESDAY NEWS BRIEFS

The first shipments of US equipment from US hospitals in Germany will arrive December 7, reported the BTA correspondent in Rousse on the Danube, quoting mayor Dimiter Kalchev. The equipment will go the regional hospital in Rousse and will be presented by US Ambassador Avis Bohlen and other US diplomats.

A monk from Mount Athos has applied for Bulgarian citizenship, Vitan Georgiev of the Ministry of Regional Development and Construction today told a meeting at the Agency for Bulgarians Abroad. The authorities will do their best to issue the papers, Georgiev said. The monk left Bulgaria in the 60s.

A military delegation led by the Greek Chief of Staff Col. Gen. Atanasios Dzoganis will make an official visit to Bulgaria from December 2 to 4, the Defence Ministry press office said. The visit is at the invitation of the Chief of General Staff of the Bulgarian army Col. Gen. Tsvetan Totomirov. The programme includes talks at the Defence Ministry and the National Assembly Defence Committee and signing a plan for military cooperation in 1997.

National Assembly Chairman Blagovest Sendov and newly- appointed Greek Ambassador Panayotis Karakasis today discussed matters related to bilateral relations, the Parliament press office said. The Ambassador assured Sendov that he will work for the promotion of bilateral relations in the spirit of the good traditions.

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