Archive for February 20, 2009

Bulgaria government to save jobs, extends public holiday in May

The Bulgarian government will try to save 19,000 jobs by offering temporary wage compensation to companies which let their workers go part-time instead of firing them due to the global crisis, it said on Thursday.

The Socialist-led government also decided to freeze 5 percent of monthly expenses for public sector wages to free money for other planned spending, aimed at shoring up the economy from the economic downturn.

The cabinet also extended two public holidays and decided to give the Balkan country six days off on May 1-6 as it said businesses, hit by falling orders, insisted on it.

The European Union newcomer is already feeling the pinch with metals, mining, chemicals and textile companies cutting production and sending hundreds of workers on forced holidays.

Under the plan, the government will extend 7.0 million levs ($4.51 million) to back incomes of workers in manufacturing and services, it said in a statement.

Employees working part-time will receive 120 levs per month for a period of three months.

The move is aimed at preventing massive layoffs and unemployment from topping 8 percent in 2009, versus 6.31 percent in 2008.

But industry officials forecast a double digit jobless rate, saying at least 50,000 workers will be made redundant this year.

Bulgaria’s leading industrial association BIA praised the jobs idea but said the funds were too limited and would cover just one percent of the workforce in the two sectors.

‘The funds are ridiculously small. What is a three-month back-up for a suffering company?’ BIA chairman Bozhidar Danev said.

The government, worried about its plummeting support ahead of parliamentary elections due between June and August, has said it will pour billions of levs (dollars) into the real economy to protect it from the crisis and create new jobs.

But the central bank warned the ruling coalition on Wednesday that its spending spree could cause a budget deficit which Sofia could not afford.

Opposition parties have called the spending plans ‘populist’ and aimed at boosting support for the Socialists.

Some of the planned spending will come from cuts in administrative funds but the government is relying mainly on achieving another hefty fiscal windfall this year of 3 percent of GDP, the same as in 2008.

Economists and opposition parties, however, say the budget surplus could evaporate because declining economic activity and foreign investment mean tax revenues will be hit. Hundreds of companies have shut down production and some face bankruptcies.

(Reporting by Irina Ivanova and Tsvetelia Ilieva; Editing by Jason Neely) ($1=1.552 Leva) Keywords: BULGARIA JOBS/GOVERNMENT

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EC steps in on law firms row in Bulgaria

Three months after five foreign law firms lodged a complaint with the European Commission, claiming that Bulgarian legislation prevented them from practising law in Bulgaria on equal terms with local firms, the European Union’s executive arm started infringement proceedings against Sofia on the issue.

“The European Commission has decided to send a letter of formal notice to Bulgaria in connection with its legislation concerning lawyers,” the Commission said in a statement. The EC also asked Bulgaria to submit, within two months, its observations on a number of problems identified regarding the application of EU law.

The particular areas on which the Commission sought clarification were: the nationality requirement for obtaining the qualification of Bulgarian lawyer; the fact that lawyers from other EU countries and Bulgarian lawyers did not benefit from the same rights for the exercise of their activity; the fact that law firms from other EU countries were prevented from establishing themselves in Bulgaria; and the rule prohibiting lawyers and law firms from other EU countries to make use of their own law firms’ names in Bulgaria.

As previously reported by The Sofia Echo, foreign law firms claim that Bulgaria Bar Act, adopted in 2006, only partially complies with the EU regulations.

DLA Piper Weiss-Tessbach, CMS Cameron McKenna, CMS Reich-Rohrwig Hainz, Wolf Theiss and CHSH Cerha Hempel Spiegelfeld Hlawati asked the EC to step in after their attempts to resolve the problem with the Bulgarian Government, Justice Ministry, Parliament, Supreme Bar Council and Commission for Protection of Competition (CPC) yielded no results.

Moreover, four of those firms were the subject of a 150 000 leva fine from the CPC in July 2008 on the grounds of unfair competition after Bulgarian law firms lodged a complaint.

The Bar Act requires law firms to be registered specifically as such, rather than commercial enterprises, and also requires that names of law firms be composed only of the names of the partners registered in one of Bulgaria’s bar associations. The provision destroys any chance of name recognition, which is crucial for the success of law firms, foreign lawyers have argued.

Their local counterparts said there was nothing wrong with the law, with the head of the Supreme Bar Council, Daniela Dokovska, telling The Sofia Echo in November that “Bulgaria’s Bar Act is fully compliant with European standards and this has been established by the EC in a review of the Act.”

The EC disagreed: “The Commission considers that some provisions of the Bulgarian Bar Act could constitute a violation of the freedom of establishment of lawyers and law firms in Bulgaria as enshrined in Article 43 EC. Moreover some provisions also appear to be in violation of Directive 98/5/EC, which aims to facilitate practice of the profession of lawyer on a permanent basis in a member state other than that in which the qualification was obtained.”