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BULGARIAN PARLIAMENT COMMITTEE MOVES TO ADDRESS DEFICITS AT POWER COMPANY NEK
GREEK FIRMS MOVING TO BULGARIA COULD CREATE 20 000 JOBS - BICA
23 JULY 2015 YEAR Issue 4 PAGE 12
Issue Highlights BULGARIA’S C-BANK BACKING TIMELY FINALISATION OF POSTBANK-ALPHA BANK DEAL Bulgaria’s central bank has said its commitment and action taken so far create prerequisites for the timely finalisation of the acquisition of the branch nework of Greece's Alpha Bank in the country by Postbank, a subsidiary of another Greek lender, Eurobank. Continue on Page 3
PAGE 8 Due to the introduction of bank holiday and capital controls, 60 000 Greek firms have readiness to redirect their business to Bulgaria. Although Greek banks re-opened on Monday after remaining closed for three weeks, the funds of firms remain blocked in banks, leaving them unable to make payments to foreign suppliers.
BULGARIA’S VALLEY OF THRACIAN KINGS KEEPS ITS SECRETS IN THE fields of Bulgaria they are everywhere — hundreds of mounds like huge molehills concealing the gold-filled tombs of ancient kings who left no other trace of their rule. Continue on Page 7
BULGARIA BOOSTS FUNDING FOR TOURISM PROMOTIONS Bulgaria’s government has decided to increase funding for the promotion of domestic tourism sites by BGN 2 M (EUR 1 M) in 2015. The additional funding for advertising Bulgarian resorts and other places of interest to tourists will be provided through the restructuring of expenses at the Tourism Ministry for the current year, the government said in a statement after its weekly meeting on Wednesday. Continue on Page 17
23 July 2015
BG Business
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BULGARIA’S C-BANK BACKING TIMELY FINALISATION OF POSTBANK-ALPHA BANK DEAL
Bulgaria’s central bank has said its commitment and action taken so far create prerequisites for the timely finalisation of the acquisition of the branch nework of Greece's Alpha Bank in the country by Postbank, a subsidiary of another Greek lender, Eurobank. The deal, announced on 17 July, needs the approval of Bulgarian and Greek regula-
tors as well as the Single Supervisory Mechanism of the eurozone. The parties to the transaction expect it to be completed by the end of the year. The SSM is the home supervisor of the eurozone banks’ divisions and branches operating in Bulgaria. Four Greekowned banks operate in Bulgaria, holding about a fifth of
the assets of the country’s banking system. While Eurobank, Piraues Bank and National Bank of Greece each operate in Builgaria through subsidiaries subject to the supervision of the Bulgarian National Bank (BNB), Alpha Bank is a branch, which means the BNB cannot exercise full control over the lender.
“The BNB supports the market-driven consolidation processes and ownership transformation in the banking system, which also further strengthen the capital base and liquidity, financial autonomy and operational independence from other countries’ banking systems”, the Bulgarian National Bank (BNB) said in a statement. Source : novinite.com
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23 July 2015
25 May 2015
23 July 2015
Bulgaria EU
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CHEAP EU CREDITS FROM 2016
Cheap credits with money from the EU funds will be launched in 2016, Deputy Prime Minister for EU Funds Tomislav Donchev told BNR. At its last meeting the Council of Ministers established a state single-stock company "Fund Manager of Financial Instruments in Bulgaria" EAD, which will manage the centralized financial instruments under the new operational programs. 750 million euro is the sum of all operational programs, including the program for rural development, which will be used for financial engineering in the new programming period, said Tomislav Donchev. EUR
103 million of the money will go to the so-called. "Initiative for small and medium-sized enterprises, he said. They will be managed by the European Investment Fund, which currently manages the program "Jeremy" in Bulgaria. The remaining EUR 650 will be managed by Bulgaria alone. The projects that will be funded with this money will be determined by the banks, which will play the role of intermediaries and will be selected by competition, it became clear from the words of Deputy Prime Minister. "The advantage that alone we will manage the money for lending is that we can serve the specific needs of Bulgarian companies and manufacturers," he said. Each ministry that manages the operational program will have its representative in the Supervisory Board of the new fund, Tomislav Donchev said. Source : standartnews.com
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23 July 2015
Culture
23 July 2015
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BULGARIA’S VALLEY OF THRACIAN KINGS KEEPS ITS SECRETS
IN THE fields of Bulgaria they are everywhere — hundreds of mounds like huge molehills concealing the gold-filled tombs of ancient kings who left no other trace of their rule. Known as tumuli, the burial mounds are the only remnants of the Thracian civilisation that inhabited the Balkan Peninsula from the 2nd millennium BC to the 3rd century AD. The accidental discovery of a tomb in 1944 revealed that the earthen structures were in fact man-made and that the burial monuments hidden within contained intricately crafted treasures. Experts believe there are more than 15,000 of these tombs in Bulgaria, a tenth of them in the so-called Valley of the Thracian Kings near the central town of Kazanlak. Many of the tombs have been looted, but a collection of surviving gold, silver and bronze objects are be-
ing shown at the Louvre museum in Paris until July 20. Of the 1500 tumuli in the valley, "only 300 of them have been excavated so far and about 35 revealed such rich burial monuments," said Kazanlak archeologist Meglena Parvin. EU funds have been used to restore a handful of tombs that have been opened to public view, but most remain shut because of a lack of money for repairs. "I feel sad that they are left like that. I hope that more money will come and we can restore and open them," Parvin said. Earth goddess The Thracians were a people of horse and cattle breeders, metal miners and goldsmiths who are believed to have had no alphabet of their own and left no written records.
They believed in the afterlife and the immortality of the soul, and buried deceased rulers with their horses, dogs, weapons, drinking cups and even playing dice. The kings were considered sons of the great goddess Mother Earth and the burial rites were highly symbolic, Parvin explained. "When he finishes his journey in this world, the king must return to the womb of his mother. That is the reason why we think that they
built these artificial mounds around their funeral structures," she said. In addition to the treasures, the bushy tumuli also conceal a variety of exquisite burial monuments. Built from huge granite blocks or bricks, they consist of a corridor and one or more chambers, with each revealing its own meticulous design and ornamentation. Source : standartnews.com
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Diplomacy
23 July 2015
BULGARIA PM BORISOV DISCUSSING INVESTMENT, TRADE ON BAVARIA VISIT
Bulgaria’s government is seeking support from Bavarian companies for the proposed construction of a natural gas distribution hub on the country’s territory, Prime Minister Boyko Borisov has said.
sov said. Stepping up trade links between Bulgaria and Bavaria was on the agenda of Borisov’s meeting with the Bavarian state premier Horst Seehofer in Munich.
Another potential area of investment in Bulgaria’s energy sector by Bavarian businesses could be the expansion and maintenance of the gas storage facility in Chiren, Borisov said during a one-day visit to the southeastern German federal state on Tuesday, according to BGNES.
Trade turnover between Bulgaria and Bavaria rose by about 10% last year, reaching EUR 792 M, and increased by 8% in the first half of 2015, Borisov said.
Bulgaria is interested in stepping up cooperation with Bavaria-based companies in machine building, electronics, electrical engineering and automotive industry, Bori-
The area around Munich is home to global heavyweights such as manufacturing company Siemens, car maker BMW, truck manufacturer MAN, as well as hundreds of smaller biotech, ICT and environmental technology companies. Source : novinite.com
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23 July 2015
BG Business
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GREEK FIRMS MOVING TO BULGARIA COULD CREATE 20 000 JOBS - BICA with the export of produce. Greek firms are no longer choosing to locate themselves only close to the border in Petrich and Sandanski, but also in other Bulgarian towns. Greeks are increasingly purchasing properties suitable for oďŹƒces and att e m p t i n g t o o p e n a ccounts in Bulgarian banks to be able to make payments to their suppliers. Due to the introduction of bank holiday and capital controls, 60 000 Greek firms have readiness to redirect their business to Bulgaria. Although Greek banks re-opened on Monday after remaining closed for three weeks, the funds of firms remain blocked in banks, leaving them unable to make payments to foreign suppliers.
The Bulgarian Industrial Capital Association (BICA) estimates that a possible redirection of Greek firms to Bulgaria would provide employment to at least 20 000 people, private bTV station informs. Such a redirection will be the easiest for firms operating in the sector of trade, while it will take more time for companies dealing
Another reason for their redirection from Greece is the increase of corporate income tax to 29 %, while the corresponding figure in Bulgaria is only 10 %. Greek business provides employment to 70 000 Bulgarians and according to estimates this number is to soon surpass the figure of 90 000. Source : novinite.com
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Energy
23 July 2015
BULGARIAN PARLIAMENT COMMITTEE MOVES TO ADDRESS DEFICITS AT POWER COMPANY NEK
A Bulgarian Parliament commitee has adopted changes to the Energy Act meant to reduce chronic financial deficits at the state-owned National Electricity Company NEK. Â The changes approved on second and final reading by the Energy Committee on Monday call for the creation of a Electricity System Security Fund, according to BGNES. Producers and importers of electricity will make monthly
contributions into the new fund equal to 5% of their sales revenue. Another change provides for cutting the expenses of NEK by capping the purchases of electricity from renewable sources at preferential prices at volumes agreed in advance between NEK and the renewable operators. The change will be made by replacing the term "average duration of operation" in contracts by "net specific pro-
duction of electricity", which will allow NEK to cut its costs and will make it impossible for producers to increase their rate of return above a level agreed in advance. The Parliament is expected to vote on the changes to the Energy Act on Wednesday. If approved, they could take effect from next month. Source : novinite.com
23 July 2015
Finance
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BULGARIA’S GOVT APPROVES ACCOUNTANCY BILL INCLUDING ANTI-RED TAPE MEASURES
Bulgaria’s government has approved a draft Accountancy Act envisaging anti-red tape provisions.
The bill eliminates the requirement to translate into Bulgarian all accounting documents entering a company.
The bill complies with the EU Directive on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, according to a media statement of Bulgaria’s Council of Ministers.
Most of the changes apply to reports of small companies and companies in the sphere of the extractive industry, which are the focal point of the new accounting directive.
The bill will reduce the administrative burden and allow businesses to cut costs, as well as introduce create clear accounting rules and procedures.
In the case of payments of EUR 100 000, the companies will have to provide detailed breakdowns of the transactions. As regards small companies, the new rules envisage a reduction of the amount of information published in the supplements to the annual financial statements.A large part of them are to be exempt from mandatory audits by registered auditors.
Companies extracting oil, gas, mineral resources, and timber will have to Only large companies will be required disclose information about the proto provide additional information, jects on which they are working, as which will be published together with well as the amount of money they are their annual financial statements. paying to the state and municipal institutions. : novinite.com PHOTO CREDIT Source : BGMEDIA
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23 July 2015
Sport
23 July 2015
BULGARIAN SETS WORLD RECORD FOR DEEPEST SALTWATER SCUBA DIVE FOR WOMEN
BULGARIA'S GRIGOR DIMITROV DROPS TO 1 6 T H P L A C E I N AT P RANKING
The Bulgarian Ina Dimitrova set a world record for the deepest scuba dive in saltwater for women. Dimitrova descended to a depth of 201 metres during a training dive in the Red Sea on Tuesday, private bTV station reports. Thus, the Bulgarian became the second woman to reach a depth of more than 200 metres. The previous record for the deepest dive in saltwater for women was held by the Mexican Sofia Ponce, who descended to a depth of 190 metres in 2010. The record for the deepest dive in fresh water for women is held by Verna Van Schaik from South Africa, who descended to a depth of 221 metres in 2004. Dimitrova descended for five minutes and forty seconds, while her ascent time was 282 minutes. For her dive, the Bulgarian used seven types of gases. The previous dive of Dimitrova was to a depth of 174 metres off the coast of Dahab in Egypt in October 2014. Source : novinite.com
Bulgaria's top male tennis player Grigor Dimitrov dropped five positions in the latest ATP ranking, which was released on Monday. At present, Dimitrov occupies the 16th place, which is not surprising considering his poor performance since the start of the new year. This is in marked contract with his achievements in 2014, when he reached his first Grand Slam semifinal at Wimbledon and claimed three ATP titles on three different surfaces. Bulgaria's best female representative Tsvetana Pironkova dropped one place in the latest WTA ranking and currently occupies the 42nd spot. The other Bulgarian player in the WTA Top 100, Sesil Karatancheva climbed two positions to claim the 96th spot.
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Source : novinite.com
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23 July 2015
Tourism
23 July 2015
LOW-COST CARRIER EASYJET LAUNCHES SOFIA - LONDON STANSTED FLIGHTS IN WINTER
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BULGARIA BOOSTS FUNDING FOR TOURISM PROMOTIONS
Low-cost airline carrier easyJet launches Sofia- London Stansted flights in December. The company, which currently operates flights to London Gatwick, has included in its winter schedule two flights a week to London Stansted, one on Tuesday and one on Saturday, with the first one scheduled to take place on December 12, 2015,according to reports of dnevnik.bg.
Bulgaria’s government has decided to increase funding for the promotion of domestic tourism sites by BGN 2 M (EUR 1 M) in 2015. The additional funding for advertising Bulgarian resorts and other places of interest to tourists will be pro-
Bookings can be made on the website of easyJet.
vided through the restructuring of expenses at the Tourism
The route will be serviced by a 156-seat Airbus A319 and a 180-seat A320, according to the airline carrier.
Ministry for the current year, the government said in a state-
The flight takes off at 7:00 from London Stansted and lands in Sofia at 12:05, while the return flight takes off at 12:45 and lands in London at 14:00. Source : novinite.com
ment after its weekly meeting on Wednesday. The extra funds are needed for the presentation of Bulgaria at 11 international tourism fairs by the end of 2015, the promotion of opportunities for cultural tourism in the country and the development of regional marketing. Source : novinite.com
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23 July 2015
THE QATAR-BULGARIA BUSINESS FORUM
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The Qatar-Bulgaria Business Forum (QBBF) is a London based NGO
Qatar Business
23 July 2015
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QATARI DEALMAKER SHEIKH HAMAD TAKES EL CORTE INGLES STAKE which 86 are in Spain and two in Portugal, and 43 Hipercor large supermarkets, according to its 2013 annual report. The group earned 174.4 million euros of profit in 2013 on sales of 14.3 billion euros.
Former Qatari Prime Minister Sheikh Hamad Bin Jassim Bin Jabr Al Thani will take a 10 percent stake in Spanish department store El Corte Ingles for 1 billion euros ($1.1 billion) as he builds his portfolio as a solo investor. He’ll get shares from the treasury stock and a seat on the Madrid-based company’s board after the deal, El Corte Ingles said in an emailed statement late Monday. The sale will occur through “an instrument convertible into shares within three years,” it said, without giving further details. Sheikh Hamad, who played a key role in Glencore International Plc’s takeover of Xstrata Plc in 2013, is back as a private investor after injecting 1.75 billion euros into Deutsche Bank AG through his Paramount Holdings Services Ltd. in-
vestment vehicle last May. Al Mirqab Capital SPC, another vehicle he controls, made a cash offer for Heritage Oil Plc last year that valued the company at 924 million pounds. Sheikh Hamad was ousted as prime minister and head of Qatar’s $100 billion sovereign wealth fund in 2013. During his time at the fund he oversaw investments in Barclays Plc and Total SA. The country’s investment abroad averaged $60 billion a year between 2008 and 2012, the International Monetary Fund said in 2013. With his latest Spanish deal, Sheikh Hamad said he wants to stay with the company “and will support El Corte Ingles’s development strategy.” Store Network El Corte Ingles operates 88 d e p a r t m e n t s t o re s , o f
The retailer is in a transition phase after the September death of Isidoro Alvarez, its chairman who built the company into western Europe’s largest department store owner. Under Alvarez’s successor, Dimas
Gimeno, El Corte Ingles is seeking to position itself to benefit from a pick-up in consumption as the Spanish economy emerges from a five-year slump, with growth of 3.3 percent expected this year, according to the government. With stores in some of the most-desired locations in Spain’s key cities, El Corte Ingles is renowned for a broad offering encompassing jewelry and stockings to airplane tickets and vacuum cleaners. Scores of salespeople dressed in red blazers attend to clients. Source : qataronline.media
THE QATAR-BULGARIA BUSINESS FORUM
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The Qatar-Bulgaria Business Forum (QBBF) is a London based NGO
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Qatar Business
23 July 2015
SUCCESSFUL JOINT VENTURES IN QATAR processes will be divided among them. Division of the scope of work
Joint ventures (JV) are common in Qatar, given the size and scale of construction projects, bond requirements, engineering licensing rules, and local shareholding requirements for foreign companies. Pamela McDonald, solicitor at Pinsent Masons, suggests some ways to avoid disputes among JV partners. If a project runs into difficulties, a dispute may arise not only between the parties themselves, but also internally between the JV members. Internal disputes often arise where the JV agreement stipulates that partners have joint liability. In those circumstances, each JV member is liable for the other’s actions or breaches of the contract, irrespective of which partner is at fault or caused or contributed to the loss. Where the JV members are severally liable, they are individually liable for their own actions and breaches, rather than cumulative liability. The likelihood of internal JV disputes can be reduced and perhaps avoided if the partners, at the outset, communicate and expressly agree how the scope of work and administrative
A JV agreement often provides for the partners to carry out separate scopes of work according to their respective specialisation and experience. Disputes may develop when the JV partners and the contract documents – both the contract establishing and regulating the JV and the construction contract itself – do not clearly delineate responsibility. Consistency between these documents is also key. In order to reach a common understanding, the overall scope should be carefully defined at the start. Each section and element of the works should then be considered in detail in the context of the partners’ respective technical strengths. The agreement reached as to the division of responsibility should be recorded in writing. Cultural considerations In the Middle East, where JV partners are often from different cultural backgrounds, there are differences in management styles, approach to risk, systems, policies, procedures and so on. For example, in relation to record keeping, procurement methods, review of design submittals and recruitment of
manpower, one JV partner may have a very different approach to the other. At the earliest opportunity, partners should ensure these topics are on their meeting agendas, and agree for the best approach to achieve success. During execution of the project, success is more likely to be achieved if JV partners trust each other, communicate and interact, and are strategically compatible. This strategic compatibility may not come naturally, but it can be achieved or increased through recognition and agreement as to how cultural and management differences will be addressed. Electronic document management Usually a single platform, internet-based, electronic document management application is used to share information such as design drawings and material approval requests, etcetera. When used effectively, the benefits of these platforms cannot be overstated. In the event of a dispute, the platform will almost certainly be relied on as an audit trail of what occurred through the life of the project and can be a persuasive evidence of one party’s failure to comply with the contract. JV partners should take a consistent, aligned approach to the use of docu-
ment management applications. An effective protocol will set out the standard parameters for using the software, such as which file formats to use, the information to be included in document title blocks and document naming policies. A thorough protocol will also provide detailed guidance on matters such as how to identify new drawings created by a subcontractor based on an original design drawing. Dispute and enforcement Most JV agreements will contain an escalation provision requiring the partners to attempt to amicably resolve disputes. If this turns out to be unsuccessful, and the dispute proceeds to litigation or arbitration, a key concern for international JV partners will be enforcement of any award that is made in the country in which the assets of JV are situated. The choice of governing law and the forum for dispute resolution should therefore be given careful consideration. A successful joint venture may only require the partners to focus and agree on a few fundamental issues. The key is recognising what these issues are, ensuring e x p re s s a g re e m e n t i s reached on them, and reflecting that consistently in both the JV agreement and the project documents. Source : qataronline.media
UK Business
23 July 2015
UK CAR PRODUCTION AT SEVEN-YEAR HIGH, SMMT SAYS
UK car production hit a seven-year high in the first half of the year, the industry's trade body has said. In total 793,642 cars were built between January and June, up by 0.3% on a year ago, The Society of Motor Manufacturers and Traders (SMMT) said. It marks the best half-year since 2008, and means three cars a minute were made in the period, the SMMT said. In June, the number of cars made rose 5.4% on a year ago, with demand for exports driving the increase. In contrast, demand for cars in the UK fell 7.1%. Overall, production volumes have risen by more than 50% since 2009, the SMMT said. It said new models and "significant" planned investments meant it expected the industry to continue to grow. SMMT chief executive Mike Hawes said the figures showed that the UK's investment in high-tech manufacturing had paid off. "This success has been built on significant industry investment and has also relied on a positive relationship with government, essential if the industry is to maintain its international competitiveness," he added. Source : BBC
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BANK OF ENGLAND MPC UNANIMOUS ON HOLDING RATES back to 0% in June. Markit chief economist Chris Williamson said the minutes "reveal a mood of hawkishness developing steadily among policymakers". All nine Bank of England policymakers voted to hold interest rates at 0.5% in July, minutes of the meeting show. However, there were signs some Monetary Policy Committee (MPC) members are edging closer to backing a rate rise. The minutes said "a number" of MPC members saw a rising risk of UK inflation heading above the 2% target in the medium term. For these members, the uncertainty around the Greek debt talks was a key factor in voting to hold rates. "Absent that uncertainty, the decision between holding Bank Rate at its current level versus a small increase was becoming more finely balanced," the minutes said. However, the minutes said that for most members, keeping rates on hold would still have been appropriate even without the problems in Greece and the volatility in China's financial markets. 'Hawkish mood' Some analysts expect the unity among MPC members to end in August when the Bank publishes a quarterly update of its forecasts for the UK economy. Figures from the Office for National Statistics released last week showed average weekly earnings including bonuses rose at an annual pace of 3.2% in the March-to-May period, the fastest rate in five years. This has increased concerns among some that rising pay could start to push up inflation, even though the CPI inflation rate fell
"Although most members would still have seen holding rates as the most appropriate stance, the minutes suggest that two members - most likely Ian McCafferty and Martin Weale are clearly inching towards voting for borrowing costs to start rising," Mr Williamson said. Mr McCafferty and Mr Weale were the two MPC members who voted for a rate rise between August and December last year. Last week, Bank of England governor Mark Carney indicated that interest rates may rise "at the turn of this year". And MPC member David Miles, who was once one of the strongest advocates for keeping rates on hold, said last week that holding off on a rate hike for too long would be "a bad mistake". Rate hike timing However, a majority of members voting in favour of a rate hike "still looks a long way off," said Martin Beck, senior economic advisor at the forecasting group EY ITEM Club. "Recent falls in the price of oil and energy could contribute to inflation falling into negative territory in the next few months," he said. "Moreover, were the UK to be the first major economy to undertake rate 'lift-off', the already sizeable upward pressure on sterling could accelerate significantly, hitting exporters and undermining the prospect of inflation returning to the 2% target," Mr Beck added. Source : BBC
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