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Archive for April, 2009

Sofia Energy Summit Sends Mixed Messages

Bulgarian Prime Minister Sergey Stanishev will pay a working visit to Moscow on April 27 to 28. The visit takes place a day after the international energy summit in Sofia, which was not attended by Russia’s Prime Minister Vladimir Putin and precedes the EU-Caspian summit in Prague, organized by the Czech Presidency of the block.

Stanishev is expected to confer with Russian President Dmitry Medvedev, with Prime Minister Vladimir Putin, with State Duma Chairman Boris Gryzlov, and with Moscow Mayor Yuri Luzhkov. The tone of dialogue between the two countries hardened at the closing of the energy forum on Saturday when Bulgarian President Parvanov that the Russian energy giant must respect Bulgaria’s sovereignty. According to the energy minister Peter Dimitrov a shareholder agreement on South Stream can be signed between Bulgargaz and Gazprom during Bulgarian prime minister Sergey Stanishev’s visit to Moscow. The main problem so far preventing the signing of an agreement is that Bulgaria does not accept Gazprom’s requirement that South Stream should use existing Bulgarian pipes.

The US Special Envoy for Eurasian Energy Affairs, Ambassador Richard Morningstar said Saturday in Sofia the Nabucco gas pipeline was just part of the solution to Europe’s needs.

“The US will take a broad approach, this is a very complicated jigsaw puzzle with many pieces”, Morningstar said expressing his satisfaction with the fact that all 28 participants in the Summit have agreed to set very basic and very compelling principles with regard to natural gas, including diversity, transparency, and accountability.

At the same time AmCham Bulgaria participated in an Energy Business Forum in Sofia that was parallel to the summit. In a BNT special program covering the summit, Valentin Georgiev AmCham executive director said that Bulgaria has to look for the alternative energy sources that are in the focus of Barack Obama’s new energy policy as well.

Elaborating on a question which of the projects Nabuco, or South Stream would be economically beneficial for Bulgaria, Mr. Georgiev said that it is up to every one of them to show whether it is efficient. Thus the gas transportation will be guaranteed.

At the same time both projects will be developed in future and currently Bulgaria has to search for other forms of its energy security as the renewable energy sources represent, Mr. Georgiev concluded.  AmCham

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Court orders Bulgaria to pay 2.5M leva damages to nightclub owners for 9/11 security measures

After the September 11 2001 terrorist attacks in the United States, Bulgaria ordered the sealing off of parts of streets close to US embassy buildings in Sofia. Now, a court has ordered compensation to be paid, in a ruling that Foreign Minister Ivailo Kalfin calls “outrageous” and that he has asked the Supreme Judicial Council to investigate.

The court ordered the Agency for Real Estate Leasing to the Diplomatic Corps in Bulgaria (ADIS) to pay 2.5 million leva in damages to owners of several night clubs in Sofia, Bulgarian-language Dnevnik daily said on April 23 2009. Kalfin’s ministry is ADIS’s principal.

The money, according to the court, was to compensate Yalta cooperative company for the lost income they suffered between 2001 and 2005 when Sofia’s central Saborna Street was sealed off as a safety measure after the September 11 2001 terrorist attacks. At the time, Saborna was the address of the US embassy in Sofia; the embassy is now in Lozenets borough. Also at that time, Yalta owned the Astoria night club, just a few metres from the US embassy building.

Because access to Astoria was blocked by fences, Yalta’s owners filed a claim against ADIS which owned the then-building of the US embassy. Now the building is used by the Spanish Cervantes cultural centre, and after the fences were lifted in 2005, Astoria opened again, but under the name Exit. A few months ago, it was transformed into one of the most lavish and fashionable night clubs in the city under the name Versai, playing Bulgarian pop-folk music. It is still owned by Yalta, Dnevnik said.

The court case has gone through all court stages and now is not subject to appeal because ADIS did not object to the amount of money Yalta asked as compensation, Dnevnik quoted Yalta’s head Dimitar Iliev as saying. “Kalfin must pay the money out of his own pocket because he did not do his job properly,” he said and added that Yalta had made several attempts to reach an agreement with the ministry, but the latter refused.

Iliev said that the US had paid the Bulgarian Government some funds for the safety measures taken by Bulgaria to protect the US embassy after the 2001 attacks.

Yalta owns several premises in the underground passage next to Sofia University that are currently closed while Sofia’s metro station is being built. Because of this, Sofia city hall’s Metropolitan company so far has paid about two million leva in rent to Yalta, Dnevnik said.

Kalfin, however, had a different interpretation. Dnevnik quoted him as saying that the sentence was an “outrage aimed to get some money out of the budget”. “With all due respect to the court system, I cannot avoid questioning its competence in this case,” he said.

With the sentence now a fact, however, Kalfin’s only way out of the mess is to ask the Supreme Judicial Council to review the case. He intended making such a request, he said.

Yalta co-operation was in the public spotlight after the December 21 2001 incident at its Indigo night club in Sofia, in which seven teenagers died as a crowd crushed together at the entrance of the disco. The tragedy put a pall over Christmas in Bulgaria that year and an official day of mourning was declared.

Six defendants were put on trial after an investigation found that icy steps and a lack of control over the crowd waiting to get in were the main reasons for the tragedy.

On November 17 2006, Sofia City Court (SCC) found only two out of the six defendants in the trial guilty of criminal negligence – Indigo manager Angel Nikolov and Tsvyatko Barchovski, the former chairman of the Youth and Sports Committee, the body that leased Indigo’s building to Yalta.

The other four defendants, which included two of the budyguards on duty on the night of the incident, Sofia’s former chief architect during 1996-2005 period, Stoyan Yanev, and the owner of Yalta co-operation Krassimir Iliev, were found not guilty.

In January 2008, the Sofia Court of Appeals (SCA) found the two bodyguards guilty and sentenced each man, employed as bodyguards in the establishment, to pay a fine of 800 leva for not ensuring that it was safe to enter the disco.  Sofia Echo

Bulgarians deeply worried by economic crisis, poll says

Bulgarians were becoming seriously concerned about the ongoing economic and financial crisis, according to a survey by the Open Society Institute in Sofia, Bulgarian-language Dnevnik daily said on April 22 2009.

The survey was done in March and April 2009 and showed that since last October, the share of people who expected the economic situation in Bulgaria to become worse had risen from 42 per cent to 54 per cent.

Fears of worsening unemployment rose from 20 per cent to 44 per cent. At the same time, expectations of increasing prices dropped from 32 per cent to 20 per cent.

People were showing more trust in the country’s banking system (48 per cent) compared to last October (27 per cent).

The support for the Currency Board in Bulgaria has also increased from 45 per cent to 55 per cent. The Currency Board is a mechanism put in place after Bulgaria’s financial meltdown in 1996/97, and by pinning the value of the lev to that of the euro, maintains the local currency’s stability.

The survey also sought opinions on the actions of Bulgaria’s Cabinet after the financial and economic crisis emerged. Just 14 per cent of those polled thought that Prime Minister Sergei Stanishev’s action plan was having a positive effect. Sixteen per cent thought negatively of the plan and 68 per cent did not what it involved, and considered that nothing was being done to fight the crisis and its effect on Bulgaria.

A few days before the release of the survey, Social and Labour Policy Minister Emilia Maslarova said that she suspected that someone was trying destabilise the labour market in Bulgaria.

She was referring to media reports that unemployment in Bulgaria was really about 13 per cent while she said it was 6.88 per cent.

“This horrifying number serves the interests of someone who wants to undermine Bulgaria’s labour sector in all its dimensions. You known that one per cent of increased unemployment means that 37 000 people have lost their jobs. If unemployment was 13 per cent, then about 222 000 people would have lost their jobs in March,” she was quoted by news agencies as saying.

According to Maslarova, in March the number of people registered as unemployed was 254 899. Her projection for April was that unemployment would be no more than seven per cent.  Sofia Echo

Nazi banner hangs from 60m factory chimney in Bulgaria

A large Third Reich banner hung for a second day running from an industrial chimney standing 60m tall in the town of Pazardjik in central Bulgaria, Bulgarian news agency Focus reported.

The highly offensive symbol appeared on the 120th anniversary of Adolf Hitler’s birthday on April 20.

Attempts to take down the flag on April 20 were aborted because of the fears that a black box wired to the flag contained a home-made bomb, prompting the police to secure the perimeter of the chimney.

Snipers had to be called in to shoot at the box and detonate it, but in the end the presumed bomb turned out to be fake.

Prosecutors have opened an investigation against unknown perpetrators on charges of fascist propaganda, which under Bulgaria’s penal code is punishable by a jail term of up to three years or a fine of 5000 leva.  (about EUR2500)

Bulgaria is the Balkan tiger in the field of software

In the period just before the outburst of the financial crisis, European Bank for Reconstruction and Development (EBRD) was updating its new strategy for telecommunications, media and technologies for 30 countries that the bank serves – from the borders of the Czech Republic to Mongolia.

Business division regrouped to focus a serious part of their investment in the media sector and in services. Investing in media and content providers who are often the first stage of development is particularly challenging because such investments are more appropriate for boutique institutions specializing in venture capital and equity investment.

EBRD’s investment team backed considerably from privatizations and major telecom operators of fixed telephone lines and advanced to investment opportunities applicable to generating of more traffic and service provision.

After the fall of communism Eastern Europe has faced serious problems with the brain drain towards the Silicon Valley because of the limited opportunities to professionals on their home markets. EBRD, however, provides a slight reversal in this trend, since the difference in wages reduces, and the standard of living and local roots of specialists play an important role in decisions related to career.

Separate areas of the world are known to the technology markets that are profiled in certain spheres. California, for example, is a world center for developing applications, India (Mumbai) is a magnet for call centers, and Bulgaria is becoming one of the major world centers for software development.

HP, CSC and many mobile operators around the world know what Bulgaria can offer, which as one of the newest EU members and a potential member of the European Community by 2010, appears to be moving backwards to the trend. The country is still investing, even during the last six months.

All this is happening despite the results of the survey of Economist Intelligence Unit published on February 18, 2009 showing that in the period November 2008 – February 2009, the share of companies in Central and Eastern Europe, planning to reduce their investment in the region, has increased from 16% to 21%.

Bulgaria also attracts more esoteric and creative companies to develop applications such as ViaOne, a U.S. company recently funded by the EBRD, which creates applications for saving resources by mobile roaming, and applications for mobile wallet and transfer funds as part of the larger set of applications such as Voice over Internet Protocol business market aimed at small and medium-sized enterprises.

Another example of intellectual property shifting to Bulgaria is Lightapp, a British high-tech company that has developed a method for delivering of applications for business and home computers to a digital television set, at part of the cost of a computer and traditional fee for licensing software.

Companies for software development, which are established in Bulgaria and currently conquering the world are such as Fadata, which serves the international insurance markets with its software for risk analysis, and Teracomm, which has developed a set of eight product lines – from applications for mobile TV and marketing to 3G connectivity and video streaming for global mobile operators.

However, the financial crisis that came afterwards became an opportunity to rethink the priorities of the EBRD while executing its investment program in 2009 and is close to defying its strategies for the next five years. The objectives of the EBRD for 2009 are needed and ambitious at the same time as the Bank plans to invest 7 billion euros. The flexibility of the EBRD in combating the effects of the financial crisis means that despite the financial problems Bulgaria can continue to build its global reputation as a global center for software development. “In these difficult times it is excellent to see a country like Bulgaria which clearly gives example of how to keep technology companies and investment and talents in the field of information and communication technologies. Watch out the “Balkan tiger Bulgaria,” said the senior banker at European Bank for Reconstruction and Development Jeffrey Nicholas.

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Another Bulgarian businessman kidnapped.

The alarming trend continues with yet another Bulgarian businessman vanishing, three days after the 70-year-old Kiro Kirov was released by his kidnappers.

Vene Sotirov (64) has been missing since the evening of April 16. According to broadcaster bTV, there is a strong possibility that he was abducted in or near the Sofia borough of Souhata Reka, where he was last seen.

According to broadcaster Darik News, the abduction was carried out by the same group that kidnapped Kirov, but as of now there is no ransom demand made.

In fact, apart from kidnapping speculation from bTV and Darik, there is no such official information confirmed by the authorities.

Sotirov owns a chain of stores in Sofia and is involved with catering, Dnevnik daily reported. According to 24 Chasa daily, Sotirov was a member of the supervisory board of the First Eastern International Bank, now the International Asset Bank, alongside the president of Slavia Sofia football club Ventsislav Stefanov and former MP Dimitar Lambovski, among others.

Until 1996, he was in the executive board of the Central Cooperative Bank.  Sofia Echo

Bulgarians still need work permits to work in Belgium

Belgium decided to lift its labour restrictions on nationals of eight Eastern European countries but not Bulgarians and Romanians, Reuters said on April 17 2009.
 
The decision for lifting the ban on May 1 2009 still has to be approved by a full session of Belgium’s cabinet, which will meet to discuss the issue on April 24.
 
Belgium will allow workers from the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia, eight countries that joined the European Union five years ago, to work freely in the country, Reuters said.
 
Bulgarians and Romanians, however, will have to wait until 2011 to work in Belgium without work permits.  
 
Out of 25 EU member states, 11 have restrictions in place for Bulgarians and Romanians. Ireland was the most recent country to extend restrictions on Bulgarians and Romanians – until 2011. Germany, Austria and the UK have also confirmed that restrictions for Bulgarians and Romanians will remain.

Hungary and Portugal opened their labour markets to nationals of the two Balkan countries on January 8 2009.

Just before New Year’s Eve, Greece and Spain did the same. Denmark, which currently imposes some restrictions, has also announced that it will stop applying restrictions for Bulgarian and Romanian workers from May 1 2009, when it will also end all restrictions for workers from the eight EU member states that joined in 2004. Sofia Echo