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Thursday, 14 July 2011
The purpose of the newsletter is to provide the latest news in the Balkans region in an objective, balanced and multiple-perspective way. All sources are quoted for the sake of convenience of the readers. By reading the newsletter you’ll learn in less than half an hour all regional top-headlines in politics and economy.
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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
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Politics and others:
- Turkey sets an ultimatum to freeze ties with EU in view of Greek Cyprus taking the EU presidency in 2012;
- Next Days Crucial for Greece and the Euro zone, Greece’s Prime Ministers George Papandreou tells a government meeting on the Greek debt crisis
- Bulgaria’s Ataka nationalist party embarks on a new attack against the US Ambassador
- Iran protests Serbia’s qualification that it is not a democratic country
- Serbia will not recognize Kosovo’s independence; Three opposition parties in Kosovo demand termination of the talks with Belgrade. Kosovo receives EUR 203M from EC
- Protesters besiege president’s building in Cyprus amid escalation of anger at the national tragedy caused by negligence of the government.
- Bulgaria responsible for the death of a 13-year-old German child
- 21st Bulgarian contingent leaves for Afghanistan
- Another Non-Confidence Vote against GERB Cabinet on 15 July
- Greece faces a selective default. Prime Minister Papandreou fires back at IMF and EU in particular that indecisiveness scare investors off.
- · Italy is proposing EUR 48B in budget cuts over 3 years to avoid bailout; Bulgaria’s and Romania’s banks directly exposed to Greece
- Lukoil Neftochim, Balkan’s largest refinery faces license-stripping by Bulgaria
- Bulgaria slammed by the European commission for illegal aid provided to Ruse Industry
BALKANS – POLITICS
Turkey sets an ultimatum to the EU in respect of the possibility of Greek Cyprus taking over the rotating EU presidency in 2012. The EU Enlargement Commissioner responds that the timing of Turkey’s warning was not right.
“Allowing Greek Cyprus to take over the rotating EU presidency in July 2012 without a unification deal for the divided island would “freeze” relations between Turkey and the European block, the Turkish foreign minister Ahmet Davutoğlu is quoted saying by Hurryiet Daily News. In Davutoğlu’s view, it is out of question for Turkey to accept the Greek Cypriot administration as its EU interlocutor. EU Commissioner Stefan Fuele said it was “not the right time to make these sorts of statements.”
“This term is the right time to accelerate Turkey-EU relations, the reform process and membership negotiations,” he said. Turkey’s chief EU negotiator took a softer tone, saying the situation would not be so different from what it is now even if a divided island takes over the EU presidency.
Next Days Crucial for Greece and the Euro zone, Greece’s Prime Ministers George Papandreou tells a government meeting on the Greek debt crisis
At a government meeting, Greece’s Prime Minister George Papandreou said that the forthcoming few days would be “particularly crucial” for the future of Greece and the Euro zone.
“We are going to face up to the challenges and to the negotiations while keeping cool but also being alert,” Papandreou said, cited by AFP. He reiterated that Greece would not accept any form of default status arising from the terms of a second debt rescue.
Iran protests Serbia’s qualification that it is not a democratic country
Iranian embassy in Belgrade handed in a note of protest to the Ministry of Foreign Affairs of Serbia because of a statement made by the speaker of the Foreign Affairs Parliamentary Committee Dragoljub Micunovic that Iran is not a democratic state, Serbia’s Blic reported.
Serbia will not recognize Kosovo’s independence. Three opposition parties in Kosovo demand termination of the talks with Belgrade. Kosovo receives EUR 203M from EC
“Serbia’s position on Kosovo remains unchanged – we will never recognize South Serbian region independency”. That is what general Serbian negotiator Borislav Stefanovic stated on 14 July, cited by Vecernje Novosti Serbia’s newspaper.Serbia’s Blic newspaper quotes Kosovo Prime Minister Hashim Thaci as saying that EC approved an aid of EUR 203M for Kosovo that will be extended until 2013.The aid is in the framework of EC investments in the reforms in Western Balkans.
Three Kosovo opposition parties: the Democratic Union, Alliance for the Future and Self-identification Movement will demand in Parliament the formal termination of the talks with Belgrade on account that the agreements reached so far are in contravention to the constitution of Kosovo.
Protesters besiege president’s building in Cyprus amid escalation of anger at the national tragedy caused by negligence of the government.
Police used teargas and stun grenades to disperse angry crowds protesting outside Cyprus’s presidential palace over the death of 12 people in a massive munitions dump blast, Greece’s Ekathimerini newspaper reports. Chanting slogans demanding the resignation of the president, some demonstrators, including right-wing nationalists, threw stones at police guarding one compound exit. Some reports put the number of protesters at about 2,000. Youths later set fire to rubbish bins outside the palace grounds. Police made several arrests but no injuries were reported. It was unclear whether President Dimitris Christofias was in the building. The protest followed a peaceful march by some 10,000 people shouting slogans and carrying placards reading “Negligence is criminal”.The rally was organised online and spread through social media and mobile phone text messages against the irresponsibility of the government. Dozens of containers of munitions Cyprus confiscated from a ship sailing from Iran to Syria in 2009 exploded at a military base on 11 July, killing 12 people and destroying Cyprus’s largest power station, which is close to the military base where the munitions were stored. Authorities have ordered a criminal inquiry into the blast. The probe comes amid a torrent of criticism over how the 100 containers – most of them filled with gunpowder – had been stored. Military officials had previously expressed fears of what exposure to the elements would have on the containers and the gunpowder in letters to the Defence Ministry.
Bulgaria responsible for the death of a 13-year-old German teen
The German media have published headlines warning about the safety of Bulgarian beach hotels and their swimming pools in particular. The 13-year-old girl Sara, drowned after being sucked by the pump of the swimming pool at Berlin Hotel in Golden Sands resort, near Varna. It became clear that the pool worked without a permit and the bars of the pump were broken, but visitors, including children, were allowed to use it. A probe, quoted by Bulgaria’s Niovinite.com, which came following the incident, showed that only 56 of the 220 swimming pools in the resorts in the Varna Municipality, including Golden Sands, have the respective official authorization. German media further ask the rhetoric question why German tourists continue to visit illegal pools where their lives are in danger and quote a doctor from the city of Varna, saying the girl’s death was caused by criminal recklessness.
The father is reported to be devastated. He brought the girl to Bulgaria to distract her and himself from the death of her mother, who passed away two years ago, and lost his beloved daughter as well.
21st Bulgarian contingent leaves for Afghanistan
A company of 165 rangers, including 13 women, is departing 14 July to Kabul, Afghanistan, to take part in the NATO ISAF mission, Bulgaria’s Novinite.com reports. This is the 21st Bulgarian contingent in Afghanistan. 90% of the staff has already participated in international missions. The Commander of the company is Captain Svetoslav Godinov from the military unit in the southern city of Stara Zagora. A total of 600 Bulgarian soldiers and medical staff are currently stationed in Afghanistan in Kabul and Kandahar.
The worst incident with Bulgarian soldiers in Afghanistan to date occurred in January 2010, when four Bulgarians were wounded in a Taliban rocket attack, with one of them later losing his hand. The incident coincided with the visit to the base of then Bulgarian Defense Minister and now Foreign Affairs Minister, Nikolay Mladenov.
In 2010, Bulgaria increased its Afghanistan contingent as part of the ISAF/NATO forces to 600 troops; half are stationed at the Kandahar airport.
Another Non-Confidence Vote against GERB Cabinet on 15 July
The Bulgarian oppositional leftist Bulgarian Socialist Party and ethnic Turkish Movement for Rights and Freedoms (DPS) will propose a no confidence vote against the country’s ruling centrist-right GERB’s minority government on 15 July. The vote is motivated by the opposition with the failure of the internal security and public order policy, police brutality, violations of basic human rights, and delay in Bulgaria’s joining of the Schengen zone. Even though the vote is expected to be backed by all parliamentary groups except GERB, it is deemed highly unlikely to succeed, as nine lawmakers who dropped out of their parties of their parties over the course of the last two years and became independent, have declared their support for GERB, reports Novinite.com.
Besides the Bulgarian Socialist Party and the Movement for Rights on Freedoms, the rightist Blue Coalition, as well as several MPs from the marginal conservative Order, Law and Justice (RZS) have declared they will back the no confidence vote. Blue Coalition members, including co-chair Martin Dimitrov , have stated that Interior Minister Tsvetan Tsvetanov should leave his position as head of the ruling party’s election campaign for the upcoming local and presidential votes, as they fear he is using his ministry as a propaganda tool. However, GERB’s 117 MPs together with the nine independent lawmakers constitute a formidable majority of at least 126 seats in the 240-seat parliament. GERB’s former allies, the far-right Ataka formation, are yet to announce their position.
On June 17, the cabinet of Prime Minister, Boyko Borisov, and his ruling party, expectedly survived a no-confidence vote on the grounds of failure in the anti-crisis policy. 124 Members of the Parliament voted in support of the cabinet – they were from GERB and independent MPs. The Blue Coalition, the far-right, nationalist Ataka, and the conservative Order, Law and Justice party, RZS, did not take part in the vote.BSP and DPS collected 70 votes.
Bulgaria’s Ataka nationalist party embarks on a new attack against the US Ambassador
Bulgaria’s far-right nationalist party Ataka has proposed the Bulgarian Parliament to adopt a declaration condemning “the inadequate conduct of US Ambassador James Warlick” following “a statement issued by him in which he interferes in the domestic affairs of the country”, Bulgaria’s Novinite.com reports. Ataka leader Volen Siderov has submitted the document in response to last week’s meeting between Warlick and independent MPs during which the diplomat congratulated them for their bravery. According to the draft declaration, during his visit to Parliament on July 07, Warlick issued statements that constitute rude intervention in Bulgaria’s internal affairs.
“He met with MPs who had withdrawn or had been excluded from their parliamentary groups, whom he assured of his support for political projects designed by them, without taking into account the extremely negative public attitude towards the ugly phenomena involving the restructuring of the political space and the so-called parliamentary nomadism”, the document says. Ataka MPs claim that Warlick’s words fail to uphold the constitutional and legal order in the country and are inadmissible for a sovereign country like Bulgaria, which is also an EU member. In their words, such conduct threatens Bulgaria’s political stability, established through the vote of Bulgarian citizens, while catering to dubious and murky interests.
Ataka proposes that the draft declaration urging the Bulgarian Foreign Ministry to send details about the case to the respective institutions in the US be tabled for plenary discussion on July 13. The Parliament’s speaker announced that the document should be considered by parliamentary committees first.
Greece faces a selective default. Prime Minister Papandreou fires back at IMF and EU in particular that indecisiveness scare investors off.
Greece is heading for selective default and its debt is likely to rise to 172 percent of GDP by next year if it opts for a rollover, the International Monetary Fund said in its latest report. In its report, the IMF revises the level of the Greek debt from 153 percent of GDP as previously seen to 166 percent this year, and says it expects it to peak at 172 percent next year, up from March estimates for 159 percent. As a result, the debt is only seen going down to 159 percent by 2020, rather than 130 percent, as originally estimated. The European Central Bank estimated on 14 July that Greece’s public debt would peak at 161 percent of gross domestic product (GDP) in 2012. Athens’ debt should then decline to 127 percent of GDP by 2020, the ECB said in its monthly bulletin for July.
The reason for this major increase is that by the end of 2012 the state will have to grant banks 23.7 billion euros, of which 19.5 billion will be needed in the last quarter of 2011. This capital boost constitutes cover for the banks’ participation in the private sector’s contribution to the new package supporting Greece. As a result, the first installment of the loan to be agreed for the country’s second bailout package will amount to 24.7 billion euros, according to the IMF. This capital should be adequate to cover the fiscal needs of the state in the last quarter of the year and to fund Greek banks.
In its quarterly report, which explains its decision to release the fifth tranche of its joint rescue package with the European Union, the Fund deems almost certain that Greece will be forced into “selective default” regardless of the exact contribution of the private sector to a second bailout package.
Prime Minister George Papandreou turned his fire on the International Monetary Fund and the European Union in particular for failing to agree on the details of a second bailout for Greece and allowing the uncertainty within the eurozone to exacerbate the debt crisis, Ekathimerini newspaper writes. Speaking to the German online edition of the Financial Times, Papandreou said that the lack of agreement within the EU over what elements would make up the new loan package for Greece due to an ongoing debate about private sector participations was having a damaging effect.
“This uncertainty is scaring off investors,” he said. “The more decisive the signal given now… the quicker we will be able to return to the markets.”
(Sofia) Bulgaria , (Bucharest) Romania
Italy is proposing EUR 48B in budget cuts over 3 years to reduce to avoid bailout; Bulgaria’s and Romania’s banks directly exposed to Greece
Bulgarian media quoted a publication of Washington Journal, headlined Overheard: Reversal of Fortune focusing on a reversal of pre-crisis situation: it costs more to insure Italian sovereign debt than that of Bulgaria or Romania. Despite its AA-minus rating from Fitch, Italy’s five-year default swaps cost $289,000 for $10 million of debt, versus a more manageable $247,000 for Bulgaria and $265,000 for Romania.Both countries are rated a whopping six notches lower than Italy at BBB-minus.
But there is a bitter irony in this. Italy’s woes ultimately are down to contagion resulting from the failure of euro-zone politicians to come to grips with the Greek debt crisis. And yet Deutsche Bank notes that Bulgaria’s and Romania’s banks are far more directly exposed to Greece.
Lukoil Neftochim, Balkan’s largest refinery faces license-stripping by Bulgaria
Bourgas-based refinery Lukoil Neftochim may be stripped of its license allowing it to operate as a tax warehouse, according to Customs Agency head Vanyo Tanov, quoted by Bulgaria’s Novinite.com. Customs inspectors have found that Lukoil Neftochim, Bulgaria’s major oil refinery, which is also the largest in the Balkans, has not installed measuring devices that are supposed to provide the authorities with real-time information about the amounts of gas that the plant launches on the market. Under Bulgarian legislation, taxes payable are calculated after the goods leave the tax warehouses. Without measuring devices, any owner of a tax warehouse can declare false volumes and evade excise duty. Tanov warned that all tax warehouses found to operate in disregard of regulations would be stripped of their licenses. Lukoil Neftochim refused to comment on the matter. On July 12, Tanov announced the start of an inspection campaign targeting tax warehouses, filling stations, refineries and petroleum tanker trucks.
“If it is possible to deceive the state about the amounts of fuel, this can only happen at Lukoil Neftochim because they don’t meet the requirements,” he said.
The Lukoil Neftochim refinery responded by saying that customs inspections are welcome at the plant.
Bulgaria slammed by the European commission for illegal aid provided to Ruse Industry
In a July 13 ruling, the first of its kind for Bulgaria, the European Commission ordered Bulgaria to recover illegal and incompatible aid from a beneficiary.
After an in-depth investigation, the European Commission has concluded that the Bulgarian metal manufacturer Ruse Industry, now in bankruptcy proceedings, has received subsidies in the form of unpaid debts to the State of around EUR 3.7 million, Bulgaria’s Novinite.com reports. The company has been in difficulties for several years. In June 2009, the Bulgarian authorities notified the Commission of plans to restructure Ruse Industry AD and its debt. In April 2010, the Commission opened an in-depth investigation. The notified restructuring was withdrawn by Bulgaria in November 2010, but the Commission has continued its investigation into the aid involved in view of the State’s failure to enforce its debt in previous years. On 11 November 2010, the Bulgarian authorities filed for bankruptcy proceedings against Ruse Industry. The Commission believes that Ruse Industry benefited from state aid as any other creditor would have sought the repayment of the debt sooner and more effectively. This creates distortions of competition vis-à-vis other companies, who had to operate their businesses without such support and were subject to the discipline of credit markets. In order to remedy this distortion, the aid to Ruse Industry should be recovered.
This is the first time the Commission orders Bulgaria to recover illegal and incompatible aid from a beneficiary. The purpose of recovery is to re-establish the situation that existed on the market prior to the granting of the aid, thereby canceling or at least alleviating the distortion of competition brought about by the aid. This is necessary to ensure a level-playing field in the internal market. The Commission’s recovery policy is set out in its 2007 Recovery Notice. The Commission can only order the recovery of the aid as from the time when Bulgaria became a member of the EU, on 1 January 2007.
(Mariela Zamfirova, 14 July 2011)