The Bulgarian government on Wednesday will vote on a long-term set of measures to lift the economy out of the doldrums, said prime minister Boyko Borissov.

Today the proposal will be debated by employers’ groups and trade unions within the National Council for Tripartite Cooperation.

The document, which has been obtained by Dnevnik, consists of 30 policies that are not subject to discussion and measures that are yet to be debated by the Cabinet.

An unnamed official of the Council of Minister told Dnevnik the institution could throw its weight behind some of the controversial proposals provided they get the go-ahead by unions and the industry.

Highest on the to-do list are speedier value-added tax (VAT) reimbursement and downsizing at the state administration. These two measures will take effect from September, with relevant legislative amendments due to be implemented by the end of the year.

Businesses and unions have come up with an idea to create a unified national information job offer system under the Employment Agency, which will publish job announcements while listing job hunters’ educational and professional background to help companies seeking to hire new staff.

Another proposal is lifting the maximum benefit paid to employees in bankrupt companies to BGN 720 from BGN 600 at present to beef up protection and security for workers.

The plan also calls for introducing the toughest restrictions on workforce imports from non-EU countries.

Another approved measure is raising the bottom social security threshold for the self-insured to BGN 420 from the current BGN 260 as of January 1 with a view to patching up the budget of the National Social Security Institute (NSSI).

The proposal to ease the social security burden is still a major bone of contention.

Meanwhile, a report commissioned by president Georgi Parvanov and prepared by the Bulgarian Academy of Sciences (BAS) urged for a complete overhaul of the personal income taxation system, with a suspension of the 10% flat tax rate, a tax-free threshold for monthly incomes of up to BGN 1,000 and a 20% tax rate for the highest incomes. It also calls for a suspension of the state guarantee on promotional saving accounts and deposits and a blanket state guarantee for all other saving accounts and deposits regardless of size.

The report should be posted on the website of the president’s office today and debated on Friday.

Parvanov said the report was written before the July 5 general elections, which toppled the three-way coalition of socialist leader Sergey Stanishev.

Lachezar Bogdanov, managing partner at local think-tank Industry Watch, warned recently that by meddling with the banking system and pressuring financial institutions the state could wreak long-term damage on the Bulgarian economy.

(Dnevnik)

In the first session of the new week, Bulgarian stocks relinquished the gains they built up in the recent days, veering off from what seemed to be a sustainable rally on Friday.

Trading volumes were prominently thin, with the total BGN 4.8 million backed mostly by industrial conglomerate Chimimport. Its common stock was off by more than 1% as shares worth BGN 3.7 million changed hands. Trade in its preferred stock was mush slacker, but it narrowed the difference to BGN 2.55 apiece for ordinary shares and some BGN 2.53 for the preference shares.

Inching down by around 0.5%, the blue-chip SOFIX closed at 482.7 points, the broader BG40 at 130.59 and the property index BGREIT at 45.46 points.

Dnevnik 20 of the biggest and most liquid stocks and BGTR30, which tracks the stocks with the highest market capitalisation and liquidity, waded deeper in the red, both sinking by 1% to 68.81 and 354.33 points, respectively.

Chimimport was joined in contraction territory by its banking arm Central Cooperative Bank (CCB), which was down by 3% in busy trade, and its agro business Zarneni Hrani Bulgaria, which lost 4% of its value.

Road builder Trace Group Hold and car battery maker Monbat were the only companies with over BGN 20,000 in turnover to claw into positive territory, gaining 1.8% and 1.3%, respectively.

Analysts say that correction in the coming months is needed to set the stage for a sustainable stock market rebound in Bulgaria and worldwide. Some have voiced concerns that the whopping rally SOFIX has staged since the start of August is unhealthy and could provoke a new collapse as it is not fuelled by fundamentals.

(Dnevnik)

Joining a spate of listed companies that have sought to shed non-operating assets under the weight of the downturn, business conglomerate Eurohold Bulgaria plans to sell its old headquarters and paint and varnish maker Orgachim has put land plots on the chopping block.

Pursuing economy of scale, Eurohold has put up for sale its old head office on Sofia’s G.M. Dimitrov boulevard after it said it is moving in a new office that will house all companies within the group.

Buyers could purchase the asset including a site and buildings plus its owner, Iztok Plaza, which is a fully-owned subsidiary of the holding company. Another option on the table is a partnership with Eurohold Bulgaria.

Orgachim is in talks with local company Marei Bulgaria to sell fixed assets comprising a land plot and buildings in the Danubian town of Rousse including dry mixture production equipment.

The company recently unpackaged plans to wind up its subsidiaries in Italy, Serbia and Ukraine as it seeks to wipe out some red ink. Orgachim posted a consolidated loss of BGN 723,000 for the first quarter, slipping from an over BGN 3 million profit for the corresponding period of 2008. The decision to close its foreign operations was prompted by flagging sales which tumbled even before domestic demand went stale.

As they feel the heat of the economic storm, a growing number of listed companies are opting for shedding assets or shutting down divisions, seeking to sharpen their focus on core operations and on the strongest positions in their portfolios.

(Dnevnik)

The first long-anticipated tenders for construction of Bulgaria’s Trakiya motorway will be held in the autumn, said construction minister Rosen Plevneliev.

The 115-kilometre road linking the eastern towns of Stara Zagora and Karnobat should be completed in the autumn of 2012, he said.

The ministry plans to tap European funding to bankroll the construction of the Maritsa motorway, which has so far been financed by the budget. The 67-kilometre stretch between Orizovo and Harmanli, in the south, has been divided into four sections, with tenders due to be invited next autumn. Construction works should finish by the spring of 2013.

The final 132-kilometre section of Struma motorway in southwestern Bulgaria has also been split in four portions. The tender for the first Dolna Dikanya-Dupnitsa section will be invited in the autumn of 2010, with building works due to wind up by the spring of 2013.

Early next year the ministry will seek a designer of the road between Dupnitsa and Blagoevgrad and the tender should take place in the spring of 2011. Within the same timeframe, the ministry plans to hold a tender for the section connecting Sandanski and Marikostinovo, with both projects due for completion by the spring of 2013.

The longest section, linking Blagoevgrad and Sandanski, will be built after 2014.

Cherno More motorway, which should link Bulgaria’s major Black Sea cities of Varna in the north and Bourgas in the south, will be an extension to Trakiya motorway and could be financed by European monies from 2014. If the economy picks up, the government could dip into the budget or concession it off, said prime minister Boyko Borissov. He pledged to build 65 km of motorways each year, outperforming the Netherlands, which he said floats out 55 km of new roads.

The premier said motorway construction is at the forefront of the government’s plans to shore up the faltering economy as it creates jobs. “Money and jobs – this is the real stimulus plan. The rest is showing off slips of paper” he explained.

(Dnevnik)

Bulgaria’s consumer prices index shed 0.2% in August, extending a drop in the three previous months, showed the latest numbers of the statistical office.

In July, prices fell by 0.6%, driving down from 0.4% in June and 0.3% in May.

Compared with August 2008, inflation sped down to 1.3%, its lowest for the eight month in six years.

The latest data confirm economists’ warnings that deflation is just around the corner, stoking concerns of a deflationary spiral as recession rattles the economy. Prices gave in to pressure from seasonally cheaper food items, mostly fruits and vegetables, coupled with stagnating consumer spending. If the trend persists, it could spell trouble for the economy and tip companies into bankruptcy.

Food, which accounts for more than one-third of the consumer basket in Bulgaria, saw prices go down by 1.9% year-on-year in August, extending a 1.4% decline in the previous month. Transport costs, which also represent a major portion of household budgets, dropped by 6% year-on-year, the eighth consecutive month of downward movement.

The Bulgarian National Bank (BNB) has predicted full-year inflation will range between 0% and 1%. Government estimates put it at 1.8% for 2009 and 2.2% for 2010.

But UniCredit has forecast Bulgaria will close the year with a 2.5% deflation. In 2008, consumer prices accelerated by a formidable 14.5%, which together with a nagging current account gap signaled an overheating economy.

Bulgaria’s consumer prices index shed 0.2% in August, extending a drop in the three previous months, showed the latest numbers of the statistical office.

In July, prices fell by 0.6%, driving down from 0.4% in June and 0.3% in May.

Compared with August 2008, inflation sped down to 1.3%, its lowest for the eight month in six years.

The latest data confirm economists’ warnings that deflation is just around the corner, stoking concerns of a deflationary spiral as recession rattles the economy. Prices gave in to pressure from seasonally cheaper food items, mostly fruits and vegetables, coupled with stagnating consumer spending. If the trend persists, it could spell trouble for the economy and tip companies into bankruptcy.

Food, which accounts for more than one-third of the consumer basket in Bulgaria, saw prices go down by 1.9% year-on-year in August, extending a 1.4% decline in the previous month. Transport costs, which also represent a major portion of household budgets, dropped by 6% year-on-year, the eighth consecutive month of downward movement.

The Bulgarian National Bank (BNB) has predicted full-year inflation will range between 0% and 1%. Government estimates put it at 1.8% for 2009 and 2.2% for 2010.

But UniCredit has forecast Bulgaria will close the year with a 2.5% deflation. In 2008, consumer prices accelerated by a formidable 14.5%, which together with a nagging current account gap signaled an overheating economy.

(Dnevnik)

Bulgarian municipalities and companies that have tapped into funding from the SAPARD aid programme of the European Union (EU) in fraudulent procedures will have to return slightly over BGN 17.3 million to state fund Agriculture, the farming ministry said.

In end-July, the European Commission (EC) demanded that the ministry add 98 meat processors to the debtors’ list on tip-offs of violations. Probes by the prosecution have established that ten of the beneficiaries have provided papers with false information to prove their expenses and so must give back north of BGN 9.3 million to the fund.

The debtors’ list features 13 small municipalities which must return over BGN 8 million for failing to inform state fund Agriculture of infrastructure public procurements.

After the Commission decided to unlock funding for SAPARD-financed projects, the administration must pay back BGN 152.6 million for 308 projects. These include 106 municipal projects that were supposed to benefit BGN 68.6 million in aid funding. Business projects under all other measures total BGN 83.6 million. Another 28 agro environmental projects have requested subsidies of BGN 279,000.

(Dnevnik)