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Monday, 1 August 2011

Today’s Topics:

Politics and others:

  • Turkish Prime Minister Erdoğan picks new top military commanders;
  • Turkey faces a wave of migrant workers coming back home;
  • EC Task Force to monitor reforms in Greece;
  • Greek Police cleared Syntagma Square from the “Indignants”; Taxi-drivers’s protest enters a 3rd week;
  • KFOR removes border barricades; Kosovo Interior Minister Bajram Redzepi threatens to arrest Stefanovic and Bogdanovic; The two contestable crossing points reopened;
  • Serbian Parliament adopts a declaration on Kosovo;
  • Ex-Ambassador of Macedonia to EU is the new Foreign Minister;
  • Closing of A1 Macedonian TV Channel a blow to democracy according to SDSM;
  • Bulgaria ranks first in lowest productivity among EU members;
  • Bulgarians abroad will vote if they submit applications by 27 September



  • Turkey suffers unprecedented losses from the Arab Spring;
  • Greek government restarts highway projects;
  • Romania ranks Tax Reduction as a priority
  • Bulgaria’s fuel saga in twists and turns;
  • Bulgaria’s fiscal reserve at EUR 2,6B; Bulgaria’s Finance Minister transfers EUR 715,8M from the Health Insurance Fund to the Fiscal Reserve;
  • British American Tobacco quits the bidding for Bulgaria’s Bulgartabac because of strategic reasons



Аnkara (Turkey)

Turkish Prime Minister Erdoğan picks new top military commanders

Prime Minister Recep Tayyip Erdoğan and acting Chief of General Staff Gen. Necdet Özel will co-chair the Turkey’s Supreme Military Council’s, or YAŞ’, meetings which will meet in the absence of the land, air, naval and gendarmerie force commanders for the first time in history. The Military Council, , will begin its annual four-day meetings on 1 August with many question marks after the military brass’ unprecedented resignations Friday put the shape of the new command structure in serious doubt, comments Hurryiet.

YAŞ member and Commander of War Academies Gen. Bilgin Balanlı will also be absent from the meeting after he was arrested in May on charges of trying to topple the government, meaning that the council will convene with only 11 of the required 16 members.

Aegean Forces Commander Gen. Nusret Taşdeler will join the meeting if a court ignores a prosecutor’s arrest warrant against him.

The resignations of former top commander Gen. Işık Koşaner, Land Forces Commander Gen. Erdal Ceylanoğlu, Naval Forces Commander Adm. Eşref Uğur Yiğit and Air Forces Commander Gen. Hasan Aksay caused a short-term crisis late 29 July but the government prevented any further chaos by swiftly appointing Özel as the new Land Forces commander before promoting him to acting chief of General Staff.

The main challenges will be the appointments of force commanders. While force commanders are generally appointed upon the chief of General Staff’s requests according to military customs, this will not be the case at this year’s YAŞ, says Hüseyin Çelik, deputy leader of the ruling Justice and Development Party, or AKP.

The chief of General Staff can propose some names, but the final say belongs to the prime minister, he told daily Milliyet. Gül made a similar, if stronger statement, to this end hours before the resignations, saying, “I will not sign any decree with my eyes closed.”

It thus appears extremely likely that the selection of the new force commanders will be made according to the wishes of Gül and Erdoğan, especially in terms of the new Land Forces commander.

Ankara (Turkey)

Turkey faces a wave of migrant workers coming back home

An increasing number of Turkish people working in western countries, mainly in Germany, are returning to their homeland 50 years after the labor migration from the country started, Hurryiet Daily writes.

Unemployment and rising racism are the major elements drawing more Turkish workers back to Turkey, Faruk Şen, who chairs the Turkish German Education and Scientific Researches Foundation, told the Radikal newspaper.

“Along with these problems, the rapid growing Turkish economy is triggering a move back to the country,” he said adding that 190,000 young people of Turkish descent had returned to Turkey from Germany.

About 5.2 million people of Turkish origin live in European Union counties and 144,000 of these people are running their own businesses there.

Every year about 2 million migrant workers visit Turkey. Some 1 million come to Turkey not only to visit relatives but to have holidays mostly in the country’s eastern and southern tourism destinations.

Athens (Greece)

EC Task Force to monitor reforms in Greece

The European Commission has set up a task force to oversee the implementation of austerity measures and structural reforms, according to documents seen by Kathimerini newspaper.

The task force, an initiative of European Commission President Jose Manuel Barroso, is to have two headquarters – in Athens and Brussels – and direct contact with Barroso’s office and that of Prime Minister George Papandreou. The Athens office will be the point of reference for all visiting inspectors currently offering technical advice to different ministries.

An additional 25 officials, members of the new task force, are to start arriving in Athens in the second half of August. The officials are to make any recommendations deemed necessary in terms of additional technical assistance and to issue three-monthly reports and warnings if the ministries are found to be diverging from targets.

The head of the new task force will be Horst Reichenbach, vice president of the European Bank for Reconstruction and Development and a former EC director general. Earlier this month, Barroso appointed Reichenbach to chair a committee that would help Greece use EU structural funds to boost growth.

Athens (Greece)

Greek Police cleared Syntagma Square from the “Indignants”; Taxi-drivers’s protest enters a 3rd week

Greek police cleared a square in central Athens on 30 July from some two dozen “indignant” peaceful protesters, who had camped in tents close to the parliament building for over two months protesting austerity measures, Kathimerini reports. The protesters initially set up the camp at Syntagma square in late May when tens of thousands people started protesting peacefully on a daily basis for weeks against the government’s austerity policies, following similar protests in Spain. But, over the past month, amidst the peak of the summer holiday season, the number of “indignants” was reduced to a few dozens campers.

Athens Mayor Yorgos Kaminis repeatedly made pleas for the end of the protest, denouncing the “degrading of the environment” and voicing determination to return the public area, clean and splendid, to all Athenians and foreign visitors to enjoy.

Eight persons, including four Greeks, two French nationals, one German and one Romanian, were arrested for violation of laws on environmental pollution, as city employees on trucks removed the tents and banners with anti-government slogans from Syntagma, Xinhua reported. The square and surrounding hotels, office buildings and stores have been repeatedly damaged over the past year and a half during anti-austerity rallies which sometimes ended in violent clashes between anti-riot police and groups of anarchists.

Taxi drivers, who are on a strike since July 18 over the deregulation of the profession, staged a demonstration at Syntagma last week, while labor unions warn of a new round of protests ending up in front of the square in August over a new wave of cutbacks on incomes the government introduces, while stepping ups efforts to adress an acute debt crisis.

Striking taxi decided to press on into a third week of protest action until the government satisfies their demands for the planned liberalization of their sector to be subject to restrictions, Kathimerini writes.

“We will continue our action until our problems are solved,” the leader of the Attica taxi drivers’ union, Thymios Lyberopoulos, said after talks with union members.


Belgrade (Serbia)

KFOR removes border barricades

Kosovo Interior Minister Bajram Redzepi threatens to arrest Stefanovic and Bogdanovic

Brnjak and Jarinje crossings were opened for traffic late 31 July.

At around 4 a.m. on 1 August, KFOR removed a sand-filled barricade set up by Serbs in northern Kosovo, Tanjug reported. There was nobody around the minor roadblock put up near the village of Zupce, at a point on the road between the city of Kosovska Mitrovica in northern Kosovo and the southern Serbian village of Ribaric.

In the meantime, Serbs have started flocking to the main roadblock at Zupce that is still intact. No incidents have been reported. The situation remains tense but quiet.

Kosovo Interior Minister Bajram Redzepi said late Sunday that representatives of the Serbian government had stayed in northern Kosovo illegally and that they might get arrested and deported to Serbia. The Kosovo Interior Ministry did not authorize representatives of the Serbian government to stay in Kosovo, Redzepi told Tanjug.

If Serbian officials want to visit Kosovo they should file a relevant request to the International Civilian Office (ICO) that should then forward the request to us and let us decide on the matter.

The Kosovo minister said that the Serbian government officials were staying in Kosovo illegally and that if they came across the police they might get arrested and deported to Serbia.

Serbian Minister for Kosovo-Metohija Goran Bogdanovic and Head of Belgrade’s negotiating team in the Belgrade-Pristina dialogue Borislav Stefanovic arrived to the province late Sunday to talk with Serbs holding  roadblocks in northern Kosovo.

Bogdanovic told Tanjug that he and Stefanovic had arrived to the Kosovo north on late Sunday and that they would meet and talk with people at the barricades, adding that he expected to continue his talks with KFOR Commander Erhard Buehler.

Earlier on 31 July, Bogdanovic and Stefanovic were not allowed to enter northern Kosovo at the administrative checkpoint Jarinje, but the two officials managed to get inside Kosovo-Metohija by another road.

Belgrade (Serbia)

Serbian Parliament adopts a declaration on Kosovo

The Serbian parliament adopted last night the Declaration on Kosovo, which condemns violence and calls for peaceful resolving of the crisis caused by the unilateral act of Pristina, reports Tanjug Agency. A total 181 of MPs voted in favor of the Declaration, 20 voted against, four abstained and two did not vote.

The document, passed on 31 July, states that the parliament supports the government in continuing the dialogue with Pristina, with the aim to find solutions to concrete problems of the citizens in the southern Serbian province, as well as to reach a permanent and compromise solution. The parliament also calls on the international community to condemn any unilateral act that jeopardizes the success of the Belgrade-Pristina dialogue.

The declaration emphasizes the government’s obligation to request from the international missions, in accordance with their mandate and framework set by Resolution 1244, not to allow unilateral activities of the Pristina institutions which jeopardize peace, stability, and the possibility of finding a compromise solution, and alter the existing situation in the field.

The parliament urges the government to do their best, in all circumstances that may occur, to protect the lives and property, rights and freedoms of Kosovo citizens, especially the Serbs and other Peoples threatened by violence.

Skopje (Macedonia)

Ex-Ambassador of Macedonia to EU is the new Foreign Minister

Macedonia’s new foreign minister Nikola Poposki assumes office on 1 August, taking over from the country’s previous foreign minister Antonio Molososki, who was holding the post since 2006, Macedonian Kurir news website reports. Poposki was Macedonia’s ambassador to the EU up to now.

Skopje (Macedonia)

Closing of A1 Macedonian TV Channel a blow to democracy according to SDSM

Opposition Social Democratic Union of Macedonia (SDSM) has described the closure of A1 television as the hardest blow to democracy in Macedonia, the local daily Utrinski Vesnik writes.

“The closure of the television, which has been operating for 18 years, is one of the hardest blows to democracy in Macedonia. One of the symbols of the Macedonian state’s independence is destroyed. This is a shameful decision that will leave a negative trace in the history,” said SDSM spokesperson Emilijan Stankovic.

The chairperson of Macedonia’s Broadcasting Council, Zoran Stefanovski, has said Agency for Electronic Communications has made a mistake when it stripped A1 television of its frequency, Macedonian Dnevnik daily writes.

According to Stefanovski the current situation is absurd, because A1 has a broadcasting license, but does not have frequency. He underlined that the Agency would have to explain why it had deprived the television of its frequency.

Sofia (Bulgaria)

Bulgaria ranks first in lowest productivity among EU members

Bulgarians work the longest hours in the European Union, but produce the less. The data comes from a study of the European Foundation for the Improvement of Living and Working and Eurostat, the statistical office of the EU.  The main factors for the low labor productivity are: lack of investments on the part of the State and the private business in modern technologies; the major part of job positions being in sectors with low added value; lack of qualified workers, and poor organization and management in many companies.

Apparently, Bulgarians are also the lowest paid.The low productivity – only 41.5% of the average in the EU, also reflects on salaries, which are 14 times lower than those in Denmark, for example.

The report further shows that compared to the newcomers from Central and Eastern Europe, workers in the older EU Member States work shorter hours, but with much higher effectiveness.

About 60% of working Bulgarians are store clerks, drivers, bartenders, waiters, and security guards while the number of those who produce goods is going down.

According to the Director of the Institute for Market Economy, Krasen Stanchev, cited by Bulgaria’s Novinite, the main reason for the low productivity is the too strong interference of the State in the economy.

Sofia (Bulgaria)

Bulgarians abroad will vote if they submit applications by 27 September

Bulgarian citizens abroad, who want to vote for president must submit their applications by September 27. The deadline decision on organizing presidential elections abroad was made by Bulgaria’s Central Election Commission (CEC). The presidential and local elections in Bulgaria are scheduled for 23 October.

Diplomatic representations have until August 13 to request approval from the hosting country and, in concordance with its laws, organize election polls at Embassies and Consular Offices, and polls where needed and possible.



Ankara (Turkey)

Turkey suffers unprecedented losses from the Arab Spring

The ongoing “Arab Spring” in the Middle East and North Africa means a winter-like summer for the Turkish construction businesses in the region, Hurryiet Daily reports.

The turmoil in Libya, which has already evolved in to a civil war, is threatening some EUR 12.7B (US$18.4B) worth of projects by Turkish builders in the country, according to a recent “Construction Sector Analysis” by the Turkish Contractors Association, or TMB.

The amount of allowance payments these companies have been unable to deposit has already hit, EUR 1,10B (US$1.6B), the report said. Nearly EUR 69.3M (US $100M) of cash owned by Turkish businesses are being held in Libya banks. The machinery and equipment of companies that have already returned to Turkey adds to the current losses.

Noting that Turkish contractors undertook nearly 6,000 projects in 90 countries across the world, totaling a business volume of EUR 131.6B (US$190B) between 1972 and 2010, Libya had a great share in this sum, the TMB report said. Within the given period, Turkish companies materialized 529 projects worth EUR 18.7B(US$ 27B) in Libya.

The losses caused by the crisis in this crucial country are not likely to be compensated in the short run, contractors said, adding that the competition conditions in post-turmoil Libya would also not be similar to those before the uprising that started in early 2010.

All these elements have forced constructors to search for alternative markets and political risks insurance is a must for the sector, the analysis concluded.

Turk Eximbank and the TMB should coordinate in finding solutions to these problems, the report continued.

Athens (Greece)

Greek government restarts highway projects

The government wishes to have construction work on the five major road projects across Greece restarted by the end of the year, after their postponement at the end of last year, Kathimerini reports. The reason the works were stopped that local banks blocked the projects’ funding.

After several months of inactivity, talks among the parties concerned have intensified in the last few weeks as the issue is particularly important for the economy’s growth prospects, given that they total 9 billion euros.

They concern the construction of Ionia Odos across western Greece, the national road serving the northern and western Peloponnese, the Central Greece highway E65, the road linking Corinth to Tripoli and Kalamata from the north to the south of the Peloponnese (which is facing the fewest problems) and the Maliakos-Kleidi section of the national road from Athens to Thessaloniki.

This, of course, does not mean that a solution is anywhere near. The concession agreements that are under revision have very specific targets of progress, which means that any digression from what has been expected would lead to a significant reversal of future capital flow.

This is already the case with the reduction in traffic and passages from toll stations, that amount to over 10 percent of the original estimates.

Bucharest (Romania)

Romania ranks Tax Reduction as a priority

Romanian President Traian Basescu said, after the meeting with the IMF, European Commission and World Bank delegation, that one of the government’s priorities will be revising the fiscal system, not by raising taxes, but by reducing the number of taxes in the future Fiscal Code, Mediafax reported

Romania and the International Monetary Fund have agreed on a list of 15 state-owned companies which will be run by private managers, IMF mission head Jeffrey Franks said. However, a definitive number is yet to be established. In May, the IMF official announced the government would cede management over 30 to 40 of the country’s largest companies.

Even though the Government may consider there is room for public sector wage raises, Romania should only raise them following more job cuts layoffs, Jeffrey Franks, head of the International Monetary Fund mission commented.

Romanian inflation is likely to ease further over the coming months, but the year-end rate will probably come in above the central bank’s forecast of 5%, the International Monetary Fund said.

Sofia (Bulgaria)

After the last week of July’s saga over the revocation of Lukoil’s license on the grounds of lack of fuel-metering equipment, the only fuel refinery in the country stopped operations on 30 July. The Bourgas-based refinery’s capacity is 8.8 million tons per year. Lukoil provides about 50-70% of the petroleum products market in Bulgaria and the company’s retail chain has more than 150 gas stations. If Lukoil has to relaunch refinery’s operations it will need two – three months. Bulgarian authorities apparently refused to extend the date for installation of the fuel-metering equipment necessary for the calculation of the excise tax. Lat week, a spokesperson of Lukoil hinted that they were left with the impression that the term had been agreed and extended. However, this was not the case.

The airports in the Bulgarian Black Sea cities of Varna and Burgas operate under normal conditions with all regular and charter flights being on time, the Bulgarian TV Channel bTV. The 1,800 tons of kerosene, unblocked from the state reserve, has been delivered and will suffice for a week. According to the calculations of the authorities, the quantities in the state reserve can suffice for 60-68 days, and the quantities of gasoline can provide for 80 days.

Late last week, Oleg Durov, Head of the Refining and Petrochemical Department of Lukoil arrived in Sofia, but talks with the Bulgarian authorities did not take place. “Such negotiations are useless,” Bulgaria’s Finance Minister Simeon Dyankov told Bulgarian TV news.

The Lukoil Bulgaria company has informed in an official letter the Bulgarian State Railroads that it is halting supply of diesel fuel to the State Railroad Company, BDZ. The move is based on the Railroads’ debt to Lukoil amounting to EUR 1.29 M, according to a high-ranking, unnamed employee of the Transport Ministry, cited by the Bulgarian TV channel bTV.

Economy and Energy Minister, Traycho Traykov and Finance Minister, Simeon Djankov, have reiterated several times Bulgaria is not on the brink of a gas crisis, but BDZ is in dire straits because if it starts negotiations with other diesel suppliers, they face Lukoil’s accusations of violating the bilateral 3-year contract. The contract bans delivery of fuel from Lukoil competitor companies, Bulgaria’s reports.

bTV further quotes their source as saying BDZ will pay EUR 1.27 M on 1 August to the company and the Transport Ministry is trying to secure the money. If the refinery decides to still halt the supply despite the payment, the Railroads would be able use the State reserves, which can provide the needed volumes for 15 days, and look for other suppliers on the market.

Dyankov and Traykov count on import from abroad to secure normal supplies for gas stations while the Interior Ministry will continue to receive for a month longer the fuel it had already ordered from Lukoil. Russia’s Kommersant newspaper wrote that the Bulgarian government has already started negotiations with Greece and Romania. Apparently, there is spare capacity and the necessary infrastructure to supply fuel from Greece and Romania but it is not clear whether the supply can make up for the terminated operation of the Bourgas-based refinery.

The Bulgarian government is calling an emergency meeting of the Monitoring Board of the Lukoil Bulgaria company. The State has a golden share in the business and has the right to undertake such move, he explained.

The Minister of Economy and Energy reiterated there is no fuel crisis in the country, except for jet fuel, which is a problem and a commitment of Lukoil Aviation, whose license has not been revoked. Traycho Traykov reiterated the commitment of Lukoil Neftohim, which had 15 months to install the electronic measuring devices, and failed to do so. The exact date and time of the emergency meeting is not clear.

The news was announced by the Deputy Chair of the GERB Parliamentary Group, Valentin Nikolov, quoted by Bulgaria’s Sofia Press Agency, as saying an emergency meeting can be called if the fuel crisis deepens after the revocation of the license of the only refinery in the country.

Nikolov explained the situation was “delicate” and could develop into a crisis. He stated GERB was counting on the support of all Bulgarian citizens since the cabinet is showing “zeal” to enforce the law, regardless of the “subject.”

Amid of the growing fuel crisis, Minister of Economy and Energy Traycho Traykov told the Bulgarian National Radio that Bulgaria’s government expects Russia’s state nuclear company to withdraw its EUR 58 M claim at an arbitration court over delayed payments for its work on two nuclear reactors in Belene nuclear power plant. According to the minister the withdrawal is likely to become a fact in a few days. Two weeks ago Russia’s state nuclear company Atomstroyexport took Bulgaria’s NEK to an arbitration court for EUR 58 M over delayed payments for its work on two nuclear reactors.

Sofia (Bulgaria)

Bulgaria’s fiscal reserve at EUR 2,6B Bulgaria’s Finance Minister transfers EUR 715,8M from the Health Insurance Fund to the Fiscal Reserve

Bulgaria’s fiscal reserve runs to EUR 2.6B (US$ 3.75B) on 30 June 2011, the country’s Finance Ministry announced.

One of the questions on 30 July parliamentary session was why EUR 715,8M (US$1.03B) were transferred from the Health Fund to the fiscal reserve at the order of the Bulgarian Finance Minister.

“The transferred amount of EUR 715,8M (US$1.03B) will be kept in the fiscal reserve and will not be spent,” Dyankov said in reply to the question.

Тhe pool of cash in the Health Insurance Fund has been accumulated by the contributions of the Bulgarian citizens in the last 10 years of the establishment of the Health Fund. At the end of the last year, the Bulgarian government decided that the reserves of the Health Fund should be redirected to the fiscal reserve. At a dedicated session on 2 September, the Parliament will discuss the reasons why EUR 715,8 were transferred from the Health Fund to the fiscal reserve.

Bulgaria’s contribution to the EU budget which the national budget paid in the first half of 2011 is EUR 187.9M (US$271.2).

At the end of June 2011 the budget balance under the Consolidated Fiscal Program is negative and amounts to EUR 332,1M (US$479.3), or 0.9% of predicted GDP. For comparison, between January and June 2010 the deficit was EUR 774M (US$1,12B) (2,2% of GDP), or in the first half of 2011 the deficit under the Consolidated Fiscal Program is down by EUR 442,2M (US$638.4)on a cash basis (1,3% of GDP).

Sofia (Bulgaria)

British American Tobacco quits the bidding for Bulgaria’s Bulgartabac because of strategic reasons

British-American Tobacco terminated its participation in the privatization procedure of Bulgaria’s Bulgartabac Holding, the Privatisation Agency said. In an official letter, British-American Tobacco inform that they will withdraw from the competition of the acquisition of 5 881 380 shares or 79,83% of Bulgartabac’s capital. As motives for its decision, the company points out “commercial and strategic reasons”

On 25 July, the Privatisation Agency announced that two companies have purchased an information memorandum for the Bulgartabac Holding: British American Tobacco andBT Invest GmbH, Austria. The third company CB Family Office Service GmbH, Austria discontinued its participation in the procedure. The deadline for submission of biding offers is 29 August 2011.

(Mariela Zamfirova, MBA; 1 August 2011)


About Johann Brandstätter

Photojournalist and documentary photographer based in Bulgaria, working mainly in the Balkans and the Middle East. Conflicts & crises, social and environmental issues, defense & military, travel, transportation.
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