Bulgarian Telegraph Agency (BTA), 97-02-05

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From: Embassy of Bulgaria <[email protected]>

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

5 February, 1997

CONTENTS

[01] EARLY ELECTIONS SCHEDULED FOR APRIL

[02] POLITICAL FORCES AGREE ON EARLY ELECTIONS

[03] PRESIDENT STOYANOV ON DECISION FOR EARLY GENERAL ELECTION

[04] DETAILS ON THE AGREEMENT

[05] SOCIALISTS HOPE COMPROMISE WILL BE UNDERSTOOD BY MEMBERS AND SYMPATHIZERS

[06] OPPOSITION WANT GOVERNMENT TO NEGOTIATE WITH INTERNATIONAL FINANCIAL INSTITUTIONS

[07] OPPOSITION EXPERT ON BULGARIAN ECONOMY PROSPECTS

[08] BULGARIA: PRICES SOAR, SHORTAGE OF STAPLE GOODS

[09] FOREIGN CURRENCY RESERVE IS USD 415 MILLION IN LATE JANUARY

[10] BUNDESTAG MP SCHMIDT ON HIS VISIT TO SOFIA

[11] PRESIDENT STOYANOV RECEIVES RUSSIAN PARLIAMENTARY DELEGATION

[01] EARLY ELECTIONS SCHEDULED FOR APRIL

[02] POLITICAL FORCES AGREE ON EARLY ELECTIONS

President Peter Stoyanov expressed to the media his satisfaction with the decision, describing it as "historic". "We have never been closer to civil conflict," Stoyanov said. He thanked all parliamentary forces for "reaching the only decision that can alleviate tension in the country."

Thousands of opposition sympathizers rallying for the 30th day Tuesday in support of early elections and against a second cabinet of the Left welcomed the news, chanting "Victory" and "Stoyanov". Some chanted "Dobrev, We'll Miss You". Opposition leaders were hugging, some were crying. The bells of the St. Alexander Nevski cathedral, site of the opposition rallies in the last month, were ringing; a bottle of champagne was popped open. "You should be here to see people celebrate," said a national radio reporter from the scene.

The barricades should be removed and the protests discontinued, said Union of Democratic Forces (UDF) floor leader Yordan Sokolov. UDF leader Ivan Kostov informed the multitude about the Council decisions. He expressed gratitude, first to President Peter Stoyanov, and then to all participants in the protests and the national strike, to the students and the young people.

The rally was also addressed by President Stoyanov, with the multitude chanting his name. "There are many difficult days ahead. I cannot promise that you'll be richer and live better during the life of the caretaker cabinet I will appoint. I can only promise to be honest and always tell the truth. Thank you," Stoyanov said.

[03] PRESIDENT STOYANOV ON DECISION FOR EARLY GENERAL ELECTION

"My optimism stems from the fact that as a result of the elections and the firm belief that only implementing structural reforms, rehabilitating the financial system, introducing a currency board and reaching a minimum consensus among the political forces, will Bulgaria embark on the right way, " Stoyanov told the media after the meeting of the Consultative Council on National Security during which the parties reached the agreement.

Stoyanov said that "the factory for illusions in Bulgaria must be closed". "We cannot expect that the deep economic crisis in Bulgaria can be resolved in two, three or five months. I cannot and have never promised that living conditions in Bulgaria will improve in the short term. We are faced with many, many difficulties created by the governance so far", Stoyanov said.

The President said he feared that growing tension in the country over the past few days could have had unpredictable consequences, "which would have left a strong imprint on the Bulgarian society and hinder the implementation of measures to lead Bulgaria out of the economic and political crisis and discredit this country". "This is why I offer my gratitude to the parliamentary forces for agreeing on the most important thing to hold early general election in the second week of April, and that all agreed not to form a cabinet," Stoyanov said. He added that he insisted before the politicians to make such a decision "as the only possible option so as to avoid civil conflict and defuse public tension".

"I am aware of the responsibility I have to assume as the person who must appoint a caretaker cabinet," Stoyanov said. "We can be assured of one thing only - that this is the right path and, once we have embarked on it, making much effort and maybe more sacrifices, we will at last reach the model which we call a model of European civilization, will implement Bulgaria's key priority, namely politically independent and economically strong Bulgaria, integrated into united Europe," Stoyanov concluded.

[04] DETAILS ON THE AGREEMENT

At the beginning of the meeting, participants heard a report on the social tension in the country and on the necessity to sustain the civil order. It was recognized that in some areas the tension has seriously escalated.

The parliamentary political forces taking part in the meeting of the National Security Consultative Council decided that President Peter Stoyanov should fix a date for early parliamentary elections some time in the second week of April. Under the law, regular elections were to be held in two years' time. In the agreement each parliamentary force agreed to give up its mandate to form a government in this National Assembly. According to the constitutional procedure, should the party holding the highest number of seats in the Parliament fail to form a government, the President shall entrust this task to the second largest parliamentary group and if it also fails, the President is to entrust the task to one of the minor parliamentary group. Absent an agreement on the formation of a government, the President appoints a caretaker government, dissolves the National Assembly and schedules new elections.

Under the law, the National Security Consultative Council may only give recommendations. Its Tuesday declaration will become a decision after it has been voted by the National Assembly. The agreement reached envisages that before the current Parliament is dissolved, the parliamentary forces will adopt a declaration on key principles of solving the economic crisis in the country. We shall return to Parliament already on Wednesday to pass important for the country laws, Yordan Sokolov, floor leader of the Union of Democratic Forces, the largest opposition force, said.

National Assembly Chairman Sendov will hold a meeting with the floor leaders and deputy floor leaders of the parliamentary forces on Wednesday morning. The meeting is to coordinate what the 36th National Assembly will do before it dissolves, Sokolov said. He also told reporters that the caretaker government will be given powers to negotiate with the international financial institutions on the introduction of a currency board in Bulgaria in order to stop hyperinflation and to achieve macroeconomic stabilization.

The early parliamentary elections will be held on April 12 or 19 this year, Deputy Chairman of the Democratic Party (a member of the opposition Popular Union coalition) Vesselin Metodiev said.

[05] SOCIALISTS HOPE COMPROMISE WILL BE UNDERSTOOD BY MEMBERS AND SYMPATHIZERS

In Purvanov's words the decision of the Consultative Council on National Security ensures the preservation of civil peace. "For over 20 days we've seen a series of unlawful actions that posed a real threat to social and political peace," Purvanov said. He said the situation was not only dramatic, it was explosive. "I sincerely hope Bulgarian society will appreciate the position of the Bulgarian Socialist Party," Purvanov said. "What we did today was not only a step necessary for the preservation of the party, a step toward regrouping our forces, toward the preservation and advancement of our positions, but also one that shows again that the BSP is a national party, a party of national responsibility," Purvanov stressed.

The Left's former prime-minister designate Dobrev said it would be not be correct to speak of a capitulation of the party. "Nobody can humiliate the BSP, reduce its electoral potential or make it a third-rate political force, " Dobrev said. He agreed with the declaration of the Consultative Council, because "as a Bulgarian, I understand well the need for agreement among politicians, understanding among citizens and stability in society." He stressed that from the first day of the seven-day term he was constitutionally given to suggest a cabinet, he made a lot of efforts for a dialogue and understanding. Dobrev also stressed his desire to preserve civil peace, "this serious achievement of the very difficult Bulgarian transition."

[06] OPPOSITION WANT GOVERNMENT TO NEGOTIATE WITH INTERNATIONAL FINANCIAL INSTITUTIONS

Vesselin Metodiev MP of the opposition Popular Union said Parliament should continue to hold sittings over the coming days to adopt relevant legal amendments to guarantee the conduct of fair and democratic elections.

The coordinator of the opposition protests, Evgeni Bakurdjiev said in a televised statement the demands that prompted the protests 30 days ago and a general strike a week ago have been met: early parliamentary elections and no mandate for a second socialist government. Bakurdjiev called for immediately lifting all barricades blocking traffic along city thoroughfares and major rail and road links and the approaches to border crossings. He also said public transport in Sofia should start operating this same night. "Tension has subsided and things in the country are getting back to the normal rhythm," said Bakurdjiev.

[07] OPPOSITION EXPERT ON BULGARIAN ECONOMY PROSPECTS

The holders of dollars here or abroad would stand to gain from the current situation, provided that they stay in power and become intermediaries in the privatization so as to be able to buy cheap Bulgarian fixed assets like land and enterprises, Mr. Stanchev assumes. "Theoretically, foreign investors could also buy cheap in Bulgaria. The trouble is that the foreign participation in the Bulgarian privatization has been blocked for two years now. And this is the whole point of clinging to power," he explains.

Mr. Stanchev suggests legalization of all transactions in hard currency and translation of all lev-denominated debts, as well as launch of quick privatization and closure of enterprises or negotiations on debt rescheduling, specifically with the Paris Club of official creditors.

The expert also suggests the contracting of a bridge loan against sale or pledge of property so as to meet payments to the Paris and London clubs. "Nobody, however, is going to negotiate with a government of Socialists," the IME Executive Director adds. All measures to stabilize the economy must be taken until March (when payments to the Paris Club fall due) or July (when the London Club debt service will be outstanding), Mr. Stanchev also says.

Before its is dissolved, Parliament should ratify the World Bank's Structural Adjustment Loan, says the IME Director. This would provide some relief for Bulgaria, because 120-130 million US dollars would cushion the blow to people who will lose their jobs with unprofitable companies.

[08] BULGARIA: PRICES SOAR, SHORTAGE OF STAPLE GOODS

The price of a loaf of bread will increase by several leva only, the municipally-owned Bread and Bakery Products company in Sofia said. The hike was prompted by the increase of the price of salt, yeast and other inputs used in the bread-making process. There are no reasons to panic - the price of flour will not be raised soon, so is the bread one, said CEOs of the Sofia Mill. However, there is shortage of bread in Sofia, although problems with supply were partly due to blockades of key intersections in the capital. Bakers and shopkeepers stock up flour, millers say. Orders for flour rose to 900 t over the past few days, from normal daily demand of 500 t to 520 t. The mills, however, are working according to schedules from previous months and have not increased flour output.

The price of bread made from Bulgarian-grown wheat continues its gradual increase due to the interest payments on loans used to buy it. The bread shortage is turning into a big problem for the elderly people as they have to spend hours waiting to buy a loaf of bread in freezing temperatures. "It has become clear that pensions and wages can buy nothing. Other goods like foods, clothes, shoes have become unaffordable," an elderly woman told BTA.

Panic-stricken by the shortage of staple foods and the soaring prices, the citizens stocked up buying all sorts of goods. They patiently lined up before the few shops that were open. At present there is a shortage of cheese and yellow cheese, which are staples in the Bulgarian diet. Experts say that merchants have hidden them awaiting new, much higher prices. Some shopkeepers in Sofia have closed their shops for the time being.

Long queues for bread were formed in Vratsa, Northwestern Bulgaria, already early in the morning. Pensioners waited for hours for bread that is cheaper than the one sold by private bakeries. Bread supplies arrived in the afternoon but with new prices. Flour is rationed in the district of Lovech, Northern Bulgaria, under an order by the outgoing agriculture minister Trendafilov. The spreading panic over bread shortages sent prices of other bakery products soaring.

[09] FOREIGN CURRENCY RESERVE IS USD 415 MILLION IN LATE JANUARY

The reserves added up to 520.831 million in late October. In late January Bulgaria made payments on its foreign debt.

At its meeting on Tuesday the BNB's Governing Board decided to grant to the Finance Ministry a loan of 24,000 million leva which is to be repaid within three months and will be subject to the currently valid base interest rate.

[10] BUNDESTAG MP SCHMIDT ON HIS VISIT TO SOFIA

"Following my talks with President Peter Stoyanov, united opposition leaders Ivan Kostov (UDF), Ahmed Dogan (ethic Turks' Movement for Rights and Freedoms), Stefan Savov, whom I visited in the hospital and Anastasia Moser (the co-chairmen of the Popular Union coalition) and my meeting with outgoing Interior Minister Nikolai Dobrev and leaders of the ruling Socialist Party, I was convinced that President Stoyanov's proposals are the most constructive and efficient way for overcoming the catastrophic situation Bulgaria is in," said the German MP. These proposals involve fast adoption of the laws on the introduction of a currency board and on the containing of inflation, he recalled. The adoption of these laws should be followed by early parliamentary elections which can no longer be postponed, Schmidt stated. "I do not see any chance for a coalition government in the next two years. The crisis is too deep and the public reaction - too angry to tolerate whatever delay of the adoption of the urgent measures, set in President Stoyanov's program," he added.

The visit of the Bulgarian President to Brussels was decisive, prompting a new understanding of the situation in Bulgaria by the EU. "The support which Peter Stoyanov received from European Commission President Jacques Santer and External Relations Commissioner Van den Broek clearly outlines the way to overcoming the crisis. That is why the programme of the Bulgarian president is supported by the leadership of the Christian Social Union. On the other hand, I believe it is necessary to adopt a stringent programme for reorganizing the future government of the country not only in view of introducing a currency board but also for launching energetic privatization and the laying of the foundations of market economy. Such a programme would restore confidence in Bulgaria on the part of the EU and foreign investors. There is no such confidence at present and the only way to win it is the quick holding of early parliamentary elections. All other attempts at circumventing these measures would lead to a dead end which would only deepen Bulgaria's tragedy," Mr. Schmidt said.

[11] PRESIDENT STOYANOV RECEIVES RUSSIAN PARLIAMENTARY DELEGATION

Baburin hailed Stoyanov's view that prospects are good for the Bulgarian- Russian ties. The Russian guest expressed a hope that the political crisis in Bulgaria will be resolved in compliance with the law. Moscow believes that the best option to resolve the situation in Bulgaria is restoration of stability and formation of a cabinet supported by a Parliament which should solve all issues, Baburin said.

Earlier on Tuesday the Russian parliamentarians met with MPs of the ethnic Turks' Movement for Rights and Freedoms and of the Bulgarian Business Bloc. The Duma parliamentarians reiterated their positions, that Bulgaria�s wish for a NATO membership should not be an impediment in developing bilateral relations.

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