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Wednesday, 6 July, 2011
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Coverage: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Kosovo, Macedonia, Montenegro, Romania, Serbia, Turkey
Timing: 6:30 am GMT every day Mon to Fri
Provision: e-mail service
- Turkey’s Turkey’s Prime Minister Recep Tayyip Erdogan introduced new Cabinet ;
- Turkish Cypriot leader Derviş Eroğlu seeks to hold the EU presidency as a unified Cyprus by 2012; The Turkish Cypriot and Greek Cypriot leaders have been conducting U.N.-brokered talks on a solution to the Cyprus problem in a bid to reunify the island since 2008;
- Turkish and Israeli officials searching for right wordings prior to the release of a UN report on the last years’ Gaza Flotilla
- Gaza Flotilla II has been confined to Greek ports,
- Israel’s Prime Minister Benjamin Netanyahu pays an official visit to Bucharest and Sofia, marking the first prime ministerial visit to both capitals in 20 years;
- Bulgaria and Romania will join Schengen in two phases, says Bulgaria’s Vice Premier and Interior Minister after meetings in Berlin;
- Bulgaria’s Prime Minister Boyko Borisov will attend a 2011 Croatia Summit New Decade for Southeast Europe – Finalizing the Transition on 8 and 9 July,
- Bultürk, an Istanbul-based organization of Bulgarian ethnic Turks nominates a Turk as its candidate in the upcoming presidential elections in Bulgaria on 23 October,
- Assigning legal counsel to former Bosnian Serb army chief Ratko Mladic, who is facing charges before a UN war crimes court, could take up to 10 days. Possible counsel – Milos Saljic;
- Six Bulgarian seamen sailing on a ship under a foreign flag were detained in Greece
- Growth in Euro zone driven mainly by France and Germany; the European Central Bank (ECB) expected to raise its key interest rate to 1.5 as it focuses on controlling inflation that is running well above the bank’s 2 percent target ceiling
- Greece will overcome its fiscal problems and find that “there’s life after debt,” says Angel Gurria, OSCE Secretary General. Panic-stricken Greek citizens have withdrawn EUR18B (US$ 25.3B) deposits from banks since the beginning of the year;
- The chairman of a Turkish real estate firm that intends to purchase islands put on sale by the Greek government;
- The Turkish economy might reach EUR 7B (US$ 10B) of foreign direct investments, or FDI;
- A newly-discovered natural gas deposit near Lovech in Northern Bulgaria contains 10 billion cubic meters of gas and will guarantee 1 billion cubic meters of natural gas per year;
- Bulgaria’s parliament scheduled to debate a long-delayed bill authorizing widespread confiscation of illegally obtained assets without a conviction;
- Tsvetan Vassilev, head of Bulgaria’s Corporate Commercial Bank, which is believed to finance the media group of mogul Irena Krasteva (associated with the ethnic-Turkish DPS), has denied interest in the privatization of the country’s state tobacco giant Bulgartabac Holding;
- No final decision has been taken for the privatization of the postal service state-owned company “Bulgarian Posts EAD” according to Bulgaria’s Transport Minister Ivaylo Moskovski;
- Bulgaria’s National Bank Governor Ivan Iskrov has expressed confidence about the stability of Bulgaria’s banking system and the prospects for Bulgaria’s economy despite the sovereign debt crisis in Greece
BALKANS – POLITICS
Turkey’s Prime Minister Recep Tayyip Erdogan unveiled Turkey’s new cabinet after his Islamist-rooted party won a third straight term in power in the June 12 elections, AFP reports. The line-up included 25 ministers, both outgoing cabinet members and newcomers, Erdogan told a press conference after President Abdullah Gul approved the list. Foreign Minister Ahmet Davutoglu retained his post, while Egemen Bagis, Turkey’s chief negotiator in EU accession talks, was appointed to head the newly-established European Union ministry.
A newcomer, Ismet Yilmaz, took over the defence ministry from the veteran Vecdi Gonul.
Another newcomer, Naim Sahin, was appointed interior minister, while his predecessor Besir Atalay became one of the four deputy prime ministers. The cabinet included only one woman – Fatma Sahin, who was appointed family and social policies minister.
Cabinet of Turkey’s 61st government (the Hürriyet Daily News)
Deputy prime ministers: Bülent Arınç, Ali Babacan, Beşir Atalay, Bekir Bozdağ
Justice Minister: Sadullah Ergin
Family and Social Policies Minister: Fatma Şahin
European Union Minister: Egemen Bağış
Science, Industry and Technology Minister: Nihat Ergün
Labor and Social Security Minister: Faruk Çelik
Environment and Urbanization Minister: Erdoğan Bayraktar
Foreign Minister: Ahmet Davutoğlu
Economy Minister: Zafer Çağlayan
Energy and Natural Resources Minister: Taner Yıldız
Youth and Sports Minister: Suat Kılıç
Food, Agriculture and Stock Raising Minister: Mehmet Mehdi Eker
Customs and Trade Minister: Hayati Yazıcı
Interior Minister: İdris Naim
Development Minister: Cevdet Yılmaz
Culture Minister: Ertuğrul Günay
Finance Minister: Mehmet Şimşek
Education Minister: Ömer Dinçer
Defense Minister: İsmet Yılmaz
Forestry and Waterworks Minister: Veysel Eroğlu
Health Minister: Recep Akdağ
Transportation Minister: Binali Yıldırım
Turkish Cypriot leader Derviş Eroğlu seeks to hold the EU presidency as a unified Cyprus by 2012, an official tells the Hürriyet Daily News. He is set to hold trilateral talks in Geneva to set a definite agenda. Eroğlu recently called for talks to be concluded within the next three to five months to reach an agreement.
Turkish Cypriot leader Derviş Eroğlu will attend a tripartite meeting with Greek Cypriot leader Dimitris Christofias and U.N. Secretary-General Ban Ki-moon in Geneva on 7 July. Ahead of the meeting Eroğlu held talks in Ankara with Prime Minister Recep Tayyip Erdoğan on late Monday and with President Abdullah Gül and Foreign Minister Ahmet Davutoğlu on Tuesday. The Turkish Cypriot leader then left for Geneva.
The Turkish Cypriot and Greek Cypriot leaders have been conducting U.N.-brokered talks on a solution to the Cyprus problem in a bid to reunify the island since 2008. Greek Cyprus, an EU member country, will take the presidency of the union in mid-2012. Turkey still has not officially recognized the Greek Cypriot administration, which has led to difficulties in its own membership negotiations with the EU.
High-level Turkish and Israeli officials are searching for the “right word with the right meaning” in a last-ditch effort to restore relations ahead of the release of a U.N. report on last year’s deadly flotilla raid.
“The main focus of the negotiations now is not about the word but about the meaning of the word in terms of responsibility,” an Israeli official told the Hürriyet Daily News on 5 July, when officials from both sides held another round of negotiations in New York. Ankara’s demand for a formal apology for Israel’s raid on the Mavi Marmara, a Turkish vessel seeking to break the Gaza blockade, has been a sticking point as the two countries try to repair their ties and the United Nations puts the finishing touches on its investigation of the incident.
“Who is responsible for what? This is the importance of the word that will be used because the responsibility has moral and legal implications,” the Israeli official told the Daily News, speaking on condition of anonymity. “We are looking to put this behind us, to find some sort of compromise, to avoid legal grievances. We want to finish this by finding the right word with the right meaning.” They also confirmed that Israel sent its deputy PM, Moshe Ya’alon, to New York for a meeting with Turkish officials.
Activists, whose flotilla to challenge an Israeli blockade on Gaza has been confined to Greek ports, vowed to complete their mission but accused Athens of being deaf to appeals to let their ships go, writes Greece’s Ekathimerini Newspaper. Greece, just over a year after nine people were killed when Israeli marines stormed a pro Palestinian flotilla, imposed the ban saying it feared for the safety of the activists who are now trying to find a way to set sail for Gaza.
But the chances that they will reach their destination soon are fading due to the vigilance of the Greek coastguard which has intercepted two of their ships so far and is closely watching the other seven, moored in ports across Greece.
“We don’t know (when we will arrive in Gaza). We are trying to build pressure on the Greek government to allow us to leave for any port. Then once we get out of the Greek ports we can direct the ships where we want,” said Adam Shapiro, an activist for the Free Gaza movement. A French ship which had sailed from Corsica was waiting for the rest of the flotilla in international waters but at one point had passed through a Greek port, organisers informed. The flotilla, carrying about 350 passengers, was supposed to be taking medicine, food and building materials to Gaza by the end of June, but a priority was to challenge the blockade.
On 3 July, the Greek coastguard intercepted the U.S. ship “Audacity of Hope” just a short while after it set sail from Piraeus port, and arrested its captain. Three days later, armed coastguards boarded the Canadian ship “Tahrir”, which set sail from Crete and escorted it back. The activists say that Tahrir’s fuel tank was cracked during the interception and demand that Greek authorities repair it. Spanish activists, from the ship “Gernika”, have occupied their nation’s embassy in Athens since 4 July to protest against the ban and demand their government’s support.
Israel says its blockade of Gaza is aimed at stopping weapons from reaching the enclave’s rulers, Hamas — an Islamist group that is branded a terrorist group by some Western nations.
In an effort to calm the activists, Greece offered to ferry the aid to Gaza in cooperation with the United Nations. The activists turned the offer down saying this was «insufficient» as their mission was also about the rights of the Palestinian people and not just about aid.
Bucharest (Romania), Sofia (Bulgaria)
Israel’s Prime Minister Benjamin Netanyahu pays an official visit to Bucharest and Sofia, marking the first prime ministerial visit to both capitals in 20 years. According to diplomatic sources, the visit is not only about Palestinian statehood bid, but also an opportunity to promote relations and cultivate friendship.
Netanyahu held meetings with his Romanian counterpart Emil Boc , as well as President Traian Basescu on 6 July. On the next day, he has scheduled meetings with Bulgarian Prime Minister Boyko Borisov and President Georgi Parvanov. Netanyahu will be accompanied on the trip to Bulgaria by eight ministers who will take part in a joint government meeting.
Israel’s relations with Romania and Bulgaria progressed after the cooling of Israel’s ties with Turkey: A government official is quoted by Bulgaria’s Novinite.com as saying that the purpose of the Netanyahu visit would be to strengthen bilateral ties and also to focus on multilateral issues – such as the UN vote in September. Romania and Bulgaria had both recognized a Palestinian state in 1988 when they were under Soviet domination. According to Israeli officials, Bulgarian Foreign Minister Nicolay Malenkov, during a meeting with Netanyahu in Jerusalem two weeks ago, left the impression that Bulgaria would not support the Palestinian move in September.
Bucharest (Romania), Sofia (Bulgaria)
Bulgaria and Romania will join Schengen in two phases. This has become clear after Bulgaria’s Vice Premier and Interior Minister meetings in Berlin. Bulgaria’s National Radio BNR reports that the proposal has come from Germany and it has been preliminarily agreed with the Netherlands, France and Finland. The plan envisages that by the end of the year Bulgarian citizens will not pass through airport check-ups. By the end of the next year, the border check-ups at the Greek border will also be terminated.
The process will be discussed in details at the meeting of EU member-states Interior Ministers scheduled for 23 September 2011. Ten days before the event, Germany’s Foreign Minister will pay an official visit to Bulgaria
Bulgarian Prime Minister Boyko Borisov will attend a 2011 Croatia Summit in Dubrovnik on 8 and 9 July, according to the government’s press service.The international conference, which is titled New Decade for Southeast Europe – Finalizing the Transition, will be attended by state and government leaders, senior officials of European and North American countries and representatives of international organizations. Security challenges amid the changed situation in the Mediterranean region and European Union enlargement will be up for discussion. Bulgaria’s Foreign Minister Nikolay Mladenov will be present too.
Bultürk, an Istanbul-based organization of Bulgarian ethnic Turks who immigrated to Turkey, nominates a Turk as its candidate in the upcoming presidential elections in Bulgaria on 23 October, journalist Nahit Dogu told Bulgaria’s Focus News Agency. The chairman of the organization Rafet Murat refused to name the candidate, because the organization was still meeting with political parties and formations to get their opinion.
“What I can tell you is that the candidate has a Turkish name. We are meeting both the opposition and governing party; our aim is to reach a consensus. Our candidate has nothing to do with a political party and his past is not marred by political or financial intrigues,” underlined Murat.
Bultürk was set up in 2003 and has representations in Istanbul, Bursa, Izmir, Ankara and other cities where immigrants live.
(The Hague.) Assigning legal counsel to former Bosnian Serb army chief Ratko Mladic, who is facing charges before a UN war crimes court, could take up to 10 days, a court official said, cited by AFP.
“We are maybe looking at 10 days to assign counsel” for Mladic, said Martin Petrov, chief of the Office of the Registry of the International Criminal Tribunal for the former Yugoslavia.
He told a press briefing it depended on a meeting next week between Mladic and a list of seven lawyers he requested, and on Mladic himself to make a choice, for the process to go ahead. Petrov added the court continued with intense discussions to get the issue resolved, but he added: “If Mr Mladic doesn’t make a choice, there is little that the Registry can do.”
The 69-year-old ex-general Monday made a second appearance before the Hague-based court following his arrest and deportation from Serbia in May.
Mladic faces 11 counts of genocide, crimes against humanity and war crimes for his role in the 1992-95 Bosnian war in which 100,000 people died.
At his second appearance, Mladic angrily berated judges for not allowing him to have his lawyers present.
Petrov said court rules could be amended to have Mladic’s Belgrade-based lawyer Milos Saljic, requested by Mladic, appointed as co-counsel. Saljic indicated he spoke neither English nor French, one of the court’s requirements to be appointed a defence lawyer. “The language requirement could be waivered exceptionally if the interest of justice so requires,” said Petrov.
Six Bulgarian seamen sailing on a ship under a foreign flag were detained in Greece at the end of June, Maritime Administration Agency Director Sergey Tsarnakliyski told Bulgaria’s Focus – Varna Radio. The Comorian-flagged ship Ina is owned by Rostov Transport, which is registered in London. The vessel had nine crewmembers – three Ukrainians and six Bulgarians. The ship captain is a Ukrainian national. According to Sergey Tsarnakliyski the captain and his senior assistant, who is a Bulgarian citizen, are under arrest. The other seven people were released and accommodated in a boarding house. Greece has opened an investigation. According to Sergey Tsarnakliyski the ship was sailing from Cyprus to Albania and transporting cigarettes. The vessel was detained in Greek territorial waters and convoyed to a port some 150 km away from Athens.
“The ship, which is sailing under a foreign flag, is not in the jurisdiction of Maritime Administration Agency, but experts are trying to help the detained Bulgarian sailors. The Bulgarian foreign ministry is working on the issue,” he said.
Euro zone Stat
Growth in the Euro zone’s dominant service sector slowed for a third straight month in June, and by more than an initial estimate, with sluggish new orders dimming the outlook, a survey quoted by Turkey’s Hürriyet Daily News shows. Growth was again driven mainly by France and Germany, with other countries in the 17-nation bloc weakening further and the possibility of a double-dip recession in Italy increasing. A separate set of data showed that retail sales in the eurozone fell by 1.1 percent in May.
The Markit Eurozone Services Purchasing Managers’ Index, or PMI, fell to 53.7 last month from 56 in May. It was revised down sharply from a flash reading of 54.2 to its lowest level since last October.
“France and Germany remain the key drivers of service sector growth in the euro area,” said Chris Williamson at data provider Markit. “But with manufacturing growth having slowed sharply in both of these countries in June, the concern is that services activity could also trend downwards in coming months.”
Interest rates to rise! The latest evidence of weakness in Euro zone peripheral economies comes as the European Central Bank, or ECB, is widely expected to raise its key interest rate to 1.5 it focuses on controlling inflation that is running well above the bank’s 2 percent target ceiling, Reuters reports. Services sector expansion slows down, while retail sales decline.
The composite PMI, which combines the services and manufacturing data published last week, fell to 53.3, its lowest level since October 2009, down from 55.8 in May and a flash estimate of 53.6. Markit said the data was consistent with second-quarter economic growth of 0.6 percent in the Euro zone, slower than the 0.8 percent seen in the first quarter, and that the loss of momentum did not bode well for the current quarter that just began either.
Earlier data from France and Germany showed composite PMIs slipped to eight-month lows while Spain’s services PMI retreated perilously close to the 50 break-even mark. Italy’s services PMI fell below 50 for the second time this year. Euro zone services business expectations hit a two-year low – down to 62.8 from 65.2 in May – as firms worry about the global economic recovery and a tail-off in orders.
Meanwhile, official figures showed that retail sales in the 17 countries that use the euro dropped by 1.1 percent in May, a further sign that the Euro zone economy is slowing down sharply from a largely export-based rebound. Eurostat, the EU’s statistics office, said Tuesday that the monthly fall took the annual rate of decline down to 1.9 percent. May’s fall was the biggest since the same month last year. Both figures were worse than anticipated in the markets. Analysts had predicted a 1 percent monthly fall and a 0.6 percent annual decline.
Greece will overcome its fiscal problems and find that “there’s life after debt,” said Angel Gurria, secretary-general of the Paris-based Organization for Economic Cooperation and Development cited by Greece’s Ekathimerini newspaper. One year after the EUR 110B (US$160B) bailout that aimed to end the region’s debt crisis, Greece is in danger of defaulting without a new rescue package. Some European countries, led by Germany, have pushed for private investors to shoulder some of the burden of a new aid plan and are seeking commitments from banks and insurers to roll over EUR 30B (US$ 42.3B) of bonds into longer-maturity debt to ease the country’s financing needs. The final solution for the Greek debt crisis will have to involve private creditors, Gurria said.
Since the beginning of the year, Greeks withdrew EUR18B (US$ 25.3B) deposits from the local banks, Greek media report. According to Greece’s Central Bank, bank deposits in May have decreased by EUR 5B (US$7.04). The reasons for deposits drainage is the soaring income of Greek households combined with fears over banks’ instability.
The chairman of a Turkish real estate firm that intends to purchase islands put on sale by the Greek government said he will found a company in Greece to avert potential problems that may arise during the buy off, Turkey’s Huriyet Newspaper reports.
“If Turkish business people like us purchase some 30, 40 or 50 islands from Greece, they would then constitute a significant power base there. In that way, it would also become easier for us to open up to Europe as well. We can represent Turkey on those islands, too. It would be pleasing if other Turkish business people invested here, once we pry the door open,” said Fikret İnan, the board chairman of FiYapı. İnan said they had also wanted to purchase an island in Greece last year but this was impossible at the time.
“They somehow whetted our appetite then and we started looking for other available islands. We found Garipada Island in İzmir and bought it. Now, Greece has officially put her islands up for sale. Several real estate agents and firms mediate in the sales of these islands. We are negotiating with those firms for the moment. We have shortlisted six islands. I want to buy at least three of them,” he said.
The 400,000-meter-square Garipada was bought by FiYapı for EUR 24.8M (US$35M).
The Turkish economy might reach EUR 7B (US$ 10B) of foreign direct investments, or FDI, by the end of 2011 after recording a significant growth of 11 percent in the first quarter of the year, said the new chairman of the International Investors Association, or YASED.
“Turkey has taken serious monetary measures to fight against the rising current account deficit,” said new YASED Chairman İzzet Karaca during Tuesday’s general assembly in Istanbul, noting that despite significant economic growth, Turkey should focus on bringing down the influx of imports. “The country should enjoy the growth,” Karaca said. “On the other [deficit], however, it needs to be careful.”
Turkey’s FDI trend is parallel with global trends, said Karaca, noting that the political and economic stability of the country would likely boost the foreign investments in the long run. Reaching a record FDI in 2007 of EUR 15.6B (US$ 22B), Turkey’s FDI figure slumped due to the global economic crisis in 2008. Having seen the signs of recovery in last year with EUR 6.31B (US$ 8.89B) total volume of FDI, “We expect to reach nearly 7B (US$ 10B by the end of this year,” Karaca said.
A newly discovered natural gas deposit near Lovech in Northern Bulgaria contains 10 billion cubic meters of gas, Bulgaria’s Minister of Economy, Energy, and Tourism announced. Minister Traycho Traykov, quoted by Novinite.com, has said that Bulgaria will soon be able to extract about 1 billion cubic meters of natural gas per year, or about one-third of its annual consumption.
He did not disclose details about the deposit near Lovech but he apparently referred to an area around the village of Deventsi in central northern Bulgaria explored in the recent years by Direct Petroleum, a US-based company. In February 2011, Texas-based company TransAtlantic Petroleum acquired 100% of Direct Petroleum Bulgaria EOOD. The news about the Lovech deposit comes two weeks after Bulgaria’s Cabinet formally decided to award a large-scale concession for shale gas exploration to US energy giant Chevron. The exploration plot in question is near the town of Novi Pazar in Northeastern Bulgaria, and the Bulgarian government will get EUR 30 M from Chevron for the exploration rights.
According to the estimates of the bidders, the deposit near Novi Pazar contains between 300 billion and 1 trillion cubic meters of shale gas. In Traikov’s words, Bulgaria’s shale gas deposits should be able to guarantee its domestic consumption of natural gas for the next 1000 years.
It is still unclear when the extraction of the mentioned natural and shale gas deposits in Bulgaria can be materialized. At present Bulgaria’s natural gas consumption is about 3 billion cubic meters per year, and 90% of that is imported from Russia. The rest comes from the development of the Kaliakra deposit in the Black Sea by UK company Melrose Resources.
Bulgaria’s parliament is scheduled to debate a long-delayed bill authorizing widespread confiscation of illegally obtained assets without a conviction, reports Bulgaria’s Novinite.com.
Bulgarian authorities are likely to have the right to seize unexplained wealth, worth more than EUR 77K (US$108K) without a conviction as of 1 January, 2012, when the law is expected to enter into force. The Council of Europe’s Venice Commission recommended this timeline after approving the final, fifth version of the draft law in the middle of June. Bulgaria’s Justice Minister Margarita Popova, who initiated the law, attended the commission’s session in Venice. The commission called on Bulgaria’s parliament to pass the new law by its summer recess. The European Commission, which sees the legislation as a powerful weapon in the country’s corruption combat, has set the same deadline. The law will allow the state Commission for Establishing of Property Acquired from Criminal Activity to probe the property and bank account of members of the families of people who cannot explain their sources of income in court and their partners.
Donations made in order to hide assets from the commission will also be subject to probes. Under the law transactions with criminally acquired property will be void and subject to forfeiture. So if the holders of illegal assets get rid of them by selling them quickly at low prices, buyers can also be held accountable. The commission will have the right to launch investigations into incomes and acquisitions for the last fifteen years.
The body has seized assets worth ЕUR 5.52M (US$ 7.8M) since its establishment in 2005.
The head of Bulgaria’s Corporate Commercial Bank, which is believed to finance the media group of mogul Irena Krasteva (associated with the ethnic-Turkish DPS), has denied he is interested in the privatization of the country’s state tobacco giant Bulgartabac Holding.
“I don’t want to buy the state-owned stake in Bulgartabac, I have not even bought documents for the tender,” Tsvetan Vassilev, majority owner and chair of the Supervisory Board of Bulgaria’s Corporate Commercial Bank, told Bulgaria’s Dnevnik daily. His statement came in response to suspicions that he is linked to one of the two bidders for the state-owned cigarette-making giant, registered in Austria – CB Family Office Services and BT Invest.
“If you think I have anything to do with BT Invest, let me tell you I have no idea who stands behind them,” the banker added. At the beginning of May Vassilev had told Pari daily that he can’t rule out considering participation in Bulgartabac privatization, but added first he had to carefully review the procedure.
Corporate Commercial Bank currently holds a 8.11% in Bulgartabac. The bank, which is believed to finance the media group of mogul Irena Krasteva, holds nearly half of the money of strategic state-owned companies.
„No final decision has been taken for the privatization of the postal service state-owned company “Bulgarian Posts EAD”, Bulgaria’s Transport Minister Ivaylo Moskovski said after vociferous protests on the part ofemployees, trade unions and opposition leaders.
“The company will be taken off the list of firms, whose privatization is banned, just so that we can have that option available as well,” Minister Ivaylo Moskovski was cited by Bulgaria’s Novinite.com.
The amendments to the privatization law were tabled and adopted on the last day of June by the economic committee in parliament with the votes of MPs from the ruling GERB party. They were harshly criticized by the opposition Socialist party, the right-wing Union of Democratic Forces, who were until recently an ally of the ruling party, but not any more, and representatives of the trade unions, who saw them as the first step towards the company’s privatization and serving hidden interests.
“We believe that behind the privatization of “Bulgarian Posts” there are hidden personal interests and a plot hatched in advance. We will not support it. There are enough other companies, which are slated for privatization and with a good reason, such as Bulgartabac and the Bulgarian Stock Exchange,” UDF leader Martin Dimitrov said at a press conference.
Bulgaria’s National Bank Governor Ivan Iskrov has expressed confidence about the stability of Bulgaria’s banking system and the prospects for Bulgaria’s economy despite the sovereign debt crisis in Greece. Speaking at a round table taking place on the sidelines of the “Bank of the Year” ceremony, he emphasized that Bulgaria’s capital adequacy stood at 15.36%, or three times over the EU minimum requirements.
Iskrov emphasised the positive features of Bulgarian economy, among which the 3.4% economic growth for Q’ 2011, which extended a one-year trend; data from July 2008 and 2011 showing that export was developing very well, especially in the pharmaceutical sector, the production of electric machines and appliances, etc, a current account deficit downsized to 0.6% from 25.2% in 2008; positive growth in investments in Q1 2011, reversing a downward trend since the onset of the crisis.
Although non-preforming loans were still on the rise, he said, the Bulgarian banking system had enough provisions to weather it. He assured that Bulgarian banks had built adequate buffers of capital to protect the system. In his words, the growth in non-performing loans had slowed down to 8.5% from 21.7% in 2010. The central bank governor reminded that stress tests were underway of 91 leading banks in the EU to see if they meet the prescribed 5% capital adequacy of primary capital.
(Mariela Zamfirova, 6 July 2011)