A m e r i c a n C h a m b e r o f C o m m e r c e i n B u l g a r i a

h o m e p a g e : w w w . a m c h a m . b g e - m a i l : a m c h a m @a m c h a m . b gBus in e s s Pa rk So f i a , M lado s t 4 A re a , Bu i l d ing 2 , F l o o r 6 , 1 7 6 6 So f i a

Te l . : ( 3 5 9 2 ) 97 4 2 7 4 3 Fax : ( 3 5 9 2 ) 97 4 2 7 41

4th of July Celebration

100 Issues Party

240 New MPs

i s s u e 1 0 1j u l y 2 0 0 9

Despite some recent excessive pre-

cipitation, it is still a summer here, hot

and full of emotions.

This is a sizzling period in Bulgaria’s

political arena - the latest parliamen-

tary elections changed completely

the political landscape; now people

and the business community expect

from GERB as the new party in power

to offer quick solutions, hard work

and radical change in the manage-

ment of the country, so that we can

prepare in the best possible way for the challenges of the eco-

nomic and financial crisis.

The time before the summer holidays is always the busiest

period for AmCham. This year was no exception. We started with

a tough sports competition at the tennis tournament, then held

a conference on the Commercial Register, which brought top-

notch speakers, moved on to a wonderful celebration of the

100th issue of AmCham Bulgaria Magazine, convened the

General Assembly, and concluded with a fantastic Fourth of July

party.

July has been marked by other news as well – U.S. Ambassador

to Bulgaria Nancy McEldowney ends her service in the country

and leaves for Washington to take a highly responsible position

with the Department of State. Even though she has been in

Bulgaria for only a year, she has turned into our Chamber’s

greatest supporter, a tireless advocate for a transparent and open

business environment, and a significant driving force in U.S.-

Bulgarian bilateral business relations. For sure we are going to

miss Nancy and her wonderful family – Tim, Jessica and Alyssa

– who became an integral part of the AmCham community.

The terms of office end this month for a number of other friends

from the U.S. Embassy. Among the many, we need to express

our special thanks to Alex Karagiannis, the deputy chief of mis-

sion, for his critical support of Chamber’s activities.

The good news is that many of our friends will stay as much

involved with Bulgaria as before. We know that AmCham will be

in Nancy and Alex’s focus during their future assignments in

Washington.

Dear friends, welcome back soon!

Best regards,

Valentin GeorgievExecutive Director

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Dear readers:

What an eventful month we got: a celebration of our

magazine’s 100th issue, Fourth of July party, new parlia-

ment and prime minister – and right after that, the vacation

season starts! Do you remember that Bill Murray flick, The

Groundhog Day, in which the lead character kept on wak-

ing up on the morning of the same day, over and over

again? If I could pick a day to relive, I would be extremely

grateful to go back to June 30, 2009, and then start from

there to the end of July. These 30 days have been

extremely interesting and we tried to cover all of them in

our magazine.

Many people came to me

to say that the party cel-

ebrating our 100th issue

was a ‘chic’ event. I guess

this is so. You can go for

a quick recap of our

media/advertising seminar

and subsequent revelry,

and especially to see the

pictures, to Pages 8-10.

Some splendid summer

weather and wonderful

spirits (both inside and

out) marked the Fourth of July party, which this year fell

on a Saturday. Please turn to Pages 4-6 for the story.

The Sunday of that week gave us the biggest and most

pleasant surprise – not who won and who lost at the par-

liamentary elections, but the fact that so many Bulgarians

this time chose to go to the polls and cast their vote. Boyko

Vassilev shares with you his thoughts about this event on

Page 12.

Well, last but not the least, we are heading into the vacation

season, when those among you who are still interested in

investing at the Black Sea coast can take a close look at the

available seaside properties and take a pick while resting.

I am joking, of course. For a complete vacation, you can

always enjoy the resorts in nearby Greece or Turkey, but

regarding possible investment opportunities on Bulgaria’s

sea shores, please pay attention to Marina Tsvetkova’s

review on Page 24.

Have a nice break from work!

Sincerely,

Milen Marchev

Editor-in-Chief

Dear Readers,

c o n t e n t s

2

Publisher

American Chamber of Commerce in Bulgaria

Business Park Sofia, Mladost 4 Area

Building 2, Floor 6, Sofia 1766, Bulgaria

Tel.: +359 (2) 9742 743

Fax: +359 (2) 9742 741

e-mail: amcham@amcham.bg

www.amcham.bg

Editor-in-Chief

Milen Marchev

Deputy Editor-in-Chief:

Christopher Karadjov

Senior Editor:

Irina Bacheva

ISSN 1312-935X

Writers:

Boyko Vassilev, Marina Tzvetkova,

Mina Georgieva, Panayot Angarev,

Yuliana Boncheva

Advertising

AmCham Bulgaria:

Nadejda Vakareeva, nadia@amcham.bg

AmCham Bulgaria Magazine:

Milen Marchev, milen@milenmarchev.com

The AmCham Bulgaria Magazine reaches a broad audience

of AmCham members, leading US, Bulgarian and internation-

al companies, US and Bulgarian decision-makers, all

AmChams around the world.

Subscription is free of charge. If you would like to subscribe

to AmCham Bulgaria publications, please contact the

AmCham Bulgaria office.

i s s u e 1 0 1j u l y 2 0 0 9

AmCham Bulgaria Magazine is a primary forum for political and economic analyses, news, viewpoints as well as for the presentation of new business oppor-

tunities. The articles in the AmCham Bulgaria Magazine express the opinions of the authors and do not necessarily reflect the position of the American

Chamber of Commerce in Bulgaria.

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3M (East) AG . AA KRES EOOD . Abbott Laboratories S.A. . AbCRO - Bulgaria . Accor Services Bulgaria . ACO Building Elements Ltd. . ACSIOR Ltd. . Adecco Bulgaria ltd. . ADIS Ltd. . Advance International Transport (Balkan) EAD . AES Corporation . AFA OOD . AIG Bulgaria Insurance & Reinsurance Company EAD . AIG Life Bulgaria . AIMS Human Capital . AIMS International Bulgaria EOOD . Air France Trade Representative . Alexander Hughes Bulgaria OOD . ALEXANDROV GROUP CORPORATION . Alfred C.Toepfer International . All Channels Communication . Alliance One Tobacco Bulgaria . Allied Pickfords Bulgaria . Alter Ego Company . America for Bulgaria Foundation . American College of Sofia . American English Academy . American Resarch Center in Sofia . American University in Bulgaria (AUBG) . Anglo-American School of Sofia . Anton Preslavski, Liebert Hiross . APIS - BULGARIA Ltd. . APOLO Ltd. . Arco Capital Management LLC . Ashtrom International Ltd. . Association Integra-BDS . Astra Zeneca UK Ltd. . AT Engineering 2000 Ltd. . Auditing Company Versi and Partners Ltd. . AVON Cosmetics Bulgaria . Axway Bulgaria EOOD . BAE Systems International Ltd. . Balkan Accession Fund . Balkan News Corporation Plc. . Balkan Star Automotive EOOD . Bayer Bulgaria EOOD . BC Serdon . BCD Travel Bulgaria . Berlitz Schools of Languages . BG Radio . BICA International . BMG Ltd. . Bodyguard-Fire-K Ltd. . Borislav Boyanov & Co. . Boyden Ltd. . Braykov's Legal Office . British American Tobacco Bulgaria . Brown Forman Beverages Worldwide Sofia Branch LLC . Buchanan Associates Europe EAD . Bulgarconsult AE EOOD . Bulgaria Platinum Group EAD . Bulgarian American Enterprise Fund . Bulgarian Charities Aid Foundation (BCAF) . Bulgarian Development Bank . Bulgarian Institute for Legal Initiatives . Bulgarian Land Development EAD . Bulgarian Property Developments EOOD . Bulgarian Telecommunications Company AD . Bulgarian VIP Travel Ltd. . Business Park Sofia EOOD . CallPoint New Europe AD . Candole Partners EOOD . Car Rental Bulgaria Ltd. . Cefin Bulgaria EOOD (IVECO dealer) . Center for the Study of Democracy . Chelopech Mining EAD . Cheque Dejeuner Bulgaria Ltd. . Chris Thompson, Independent Consultant . Cisco Systems Bulgaria . Citibank N.A. - Sofia Branch . City University of Seattle . Civitas Global, A Ketchum Affiliate . Cleves EOOD . CMS Cameron McKenna EOOD . Coca-Cola HBC Bulgaria AD . Coface Bulgaria Credit Management Services EOOD . COLLIERS International Bulgaria . Construction Management Group . ConsulTeam Recruitment and Selection Ltd. . Cook Communications . Corstjens Worlwide Movers Group . CPM Consultancy Sllc . Crystal Developments LLC . Curtis / Balkan Ltd. . D&IC (Dun and Bradstreet Representative) . Dalkia Bulgaria EAD . DeConi International . Delchev & Partners Law Firm . Deloitte Bulgaria OOD . DENIMAR Ltd. . denkstatt Bulgaria OOD . Dental Clinic Medical Dent Consult Ltd. . Devin AD . DHL Express Bulgaria Ltd. . Diageo Bulgaria Ltd . Diamed Ltd. . Dimitrov, Petrov & Co. . Djingov, Gouginski, Kyutchukov, & Velichkov . Dobrev, Kinkin & Lyutskanov Law Firm . Domaine Boyar International AD . Dr. Emil Benatov & Partners . Dr. I.S. Greenberg Medical Center, Ellen Ruth Greenberg, Ph.D. . DuPont Bulgaria EOOD . Economedia AD . EcoPack Bulgaria AD . Effekten Und Finanz - Sofia AD . Ekotoi - Service Ltd. . Electron Progress EAD . Eli Lilly and Company . Elta Consult AD . Emerson Process Management AG . Emmis International . Emporiki Bank Bulgaria EAD . Enel Maritza East 3 AD . Enemona SA . Energo Service AD . Engineeringservice Sofia Ltd. . Environmental Quality Management, Inc. . Equest EAD . Equity Share International OOD . ERATO HOLDING Plc . Ericsson Telecommunications Bulgaria EOOD . Ernst & Young Bulgaria . Eurobank EFG Bulgaria (under the brandname of Postbank) . European Bank for Reconstruction and Development (EBRD) . Faustina Group . Flying Cargo Bulgaria Ltd. - Licensee of FedEx . Force Delta Ltd. . Fortel Engineering Ltd. . Forton International JSCo . Foster Wheeler Energia Polska, Branch Office Bulgaria . Foundation for Local Government Reform . G4S Security Services Bulgaria JSC . General Electric International . GlaxoSmithKline . Global Benefits Group GBGI CEE LLC Representrative Office . Grand Hotel Sofia . Grenville Bulgaria . HelmsBriscoe . Hewlett-Packard Bulgaria Ltd. . HILD Asset Bulgaria Jsc. . Hilton Sofia . Honeywell EOOD . Hotel Yastrebets Wellness & SPA . IBM Bulgaria . IBS Bulgaria Ltd. . Ideal Standard Bulgaria . In Time Ltd. . Industrial Holding Bulgaria . ING Bank N.V. Sofia Branch . Interbrands Marketing & Distribution Inc. OOD . International University College . Investbank Plc. . IP Consulting Ltd. . ISI Emerging Markets (Internet Securities, Inc.) . JobTiger Ltd. . Johnson & Johnson Doo. . Johnson Controls Electronics Bulgaria . Junior Achievement Bulgaria . Kaliakra AD . Kalin Cargo and Tours LLC . Kamenitza AD . Katilin Popov Enforcement Officers . Kempinski Hotel Grand Arena Bansko . Kimimpex Trade and Leasing Ltd. (2be) . Kolbis International Transfer Corporation . KPMG Bulgaria . Kraft Foods Bulgaria . LANDMARK Property Bulgaria . Lexim Sofia Ltd. . Lindner Immobilien Management EOOD . Lirex BG Ltd. . Lowe Swing Communications . M & M Air Cargo Service Bulgaria Ltd. . M3 Communications Group, Inc. A Hill & Knowlton Associate . Magnetic Head Technologies . Maria Vranovska, MD, MBA . Mars Incorporated Bulgaria . Marsh EOOD . MARTERN EOOD . MB Communications . MBL Ltd. . McDonald's Bulgaria Ltd. . Mellon Bulgaria EAD . Merck Sharp & Dohme Bulgaria . Mercurius-Sofia . Metropolitan Hotel Sofia . Microsoft Bulgaria . Miltech Ltd. . Mobiltel EAD . Monbat Plc. . Moody International Ltd. . Moten Sport . Moto-Pfohe Ltd. . Motorola Bulgaria EAD . Mr. Dider Stoessel . Mr. Marco A. Bosman . National DISTRIBUTORS . NATO Defense College Anciens' Association . NATO Information Center in Sofia/ The Atlantic Club of Bulgaria . Neochimiki Bulgaria S.A. . Neterra Communications . Neumann International AG . New Europe Corporate Advisory . New Europe Directories Bulgaria . Nexcom Bulgaria EAD . N-Vision Energy EOOD . On Bulgaria Ltd. . Oracle East Central Europe Limited - Branch Bulgaria . Orbit Ltd. . Orkikem Ltd. . OSG Records Management . Outsource Partners International . Ozone Laboratories Bulgaria . PANDA - IP Ltd. . Penev & Partners Law Offices . Penkov, Markov & Partners . Pfizer Luxembourg SARL, Representation Office Bulgaria . Philip Morris Bulgaria EOOD . Pioneer Semena Bulgaria EOOD . Piraeus Bank Bulgaria AD . Plesio Computers Jsc . Polis Construction SA . Praktiker EOOD . Pratt & Whitney . Premier Tours Ltd. . PricewaterhouseCoopers . Procter & Gamble Bulgaria . Project Management Ltd. Branch Bulgaria . PSG Payroll Services Ltd. . Radisson SAS Grand Hotel . Reader's Digest EOOD . Reed Personnel Services Bulgaria . Regus Bulgaria Ltd. . Renault Nissan Bulgaria SRL . Rising Force Co., Ltd. . Rizova & Partners Law Firm . Rockwell/Intelpack . RPI Consulting Ltd. . S&T Bulgaria . Sanofi - Aventis Bulgaria EOOD . Savantelbul Bulgaria . Scandinavia Motors Ltd. . Schenker EOOD . Schering - Plough Central East - Branch Bulgaria . Schneider Electric Bulgaria . SEAF Management Bulgaria EOOD . Sheraton Sofia Hotel Balkan . Sherita M Ltd. . Siemens EOOD . Sienit Ltd. . SigmaBleyzer Investment Group LLC - Representative Office . SKE Bulgaria EOOD . Sodexo Pass Bulgaria EOOD . Sofstroy AD . Soravia Bulgaria Ltd. . Stanton Chase International Bulgaria . Steelcase International . Stefan Dimitrov, Norman Realestate Co. Ltd. . Stroy-Consult EOOD . Sutherland Global Services Bulgaria EOOD . TechnoLogica EOOD . TeleLink EAD . The Coca-Cola Company Bulgaria . Tishman Management Company Ltd. . Tissue Bank Osteocenter Bulgaria EAD . TMF . Totema Engineering . TR Baxter AG . Trinity Corporate Services EOOD . UniCredit Bulbank . Unimasters Logistics Plc . Unique Estates . Unisys Bulgaria Branch . United Bulgarian Bank . United Consulting Ltd. . United Healthcare Bulgaria Group of Companies . United Medical Communications . Vaptsarov Holding AD . Vector Management Bulgaria EOOD . Videolux Holding / Technopolis . VIP Security Ltd. . VISA Europe . VM Finance Group . VSK Kentavar Ltd. . Welcome to Bulgaria . Westinghouse Energy Systems Bulgaria Branch . Winslow Group AD . World Courier Bulgaria . World Transport Overseas Bulgaria Ltd. . WorleyParsons Europe Energy Services Ltd. . Wrigley Bulgaria EOOD . Xerox Bulgaria Ltd. . Yavlena EOOD . Zlati Dinev Studio in partnership with Outerbridge/Morgan

Board of Directors of the American Chamber of Commerce in Bulgaria

President Mr. Anthony Hassiotis Eurobank EFG Bulgaria

Vice President Mr. Stefan Ivanov Citibank N.A.

Vice President Ms. Tanya Kosseva-Boshova Landmark Property Bulgaria

Treasurer Mr. Rossen Plevneliev Lindner Immobilien Management

Members Mr. David Butts CMS Cameron McKenna Bulgaria

Mr. Atanas Garov Colliers International Bulgaria

Mr. George Georgiev Motorola Bulgaria

Mr. Thomas Higgins Balkan Accession Fund

Mr. Zachary Hampson Grenville Bulgaria

Ms. Dana Leff AbCRO Bulgaria

Mr. Peter Lithgow AES Maritza East 1

Mr. Bernard Moscheni BTC

Ex-Officio Member Mr. Scott Pozil US Senior Commercial Attache

Executive Director Valentin Georgiev

Contentsa m c h a m e v e n t s

AmCham July 4th Party Bids Farewell to Ambassador Nancy McEldowney . . . . . . . . . . . . 4

a n n i v e r s a r y

AmCham Bulgaria Magazine Celebrates 100 Issues . . . . . . . . . . . . . . . . . . . . . 8

p o l i t i c s

The Wave Called GERB And The Mystery Of Bulgarian Votes . . . . . . . . . . . . . . . . .12

Budget Waiting for Boyko Borissov . . . . . . . . . . . .20

e c o n o m y

2009: Tourism Industry Keeps Fingers Crossed . . . . . . . . . . . . . . . . . . . .24By Mina Georgieva

a n a l y s i s

Will The Crisis Drive Foreign Investors Away? . . . . .28By Galya Clark

Next Government to Tackle Severe Economic and External Stability Issues . . . .30

a m c h a m e v e n t s

Forum Seeks to Add to the Efficiency of the Commercial Registration . . . . . . . . . . . . . . . . . . .32

How to Make Businesses Invest in Environmental Products . . . . . . . . . . . . . . . . . .34

AmCham Meets with American Marshall Memorial Fellows . . . . . . . . . . . . . . . . . .35

Businessmen and Journalists Compete in the AmCham Tennis Tournament . . . . . .36

Tanya Kosseva-Boshova, Stefan Ivanov Re-Elected to AmCham Board . . . . . . . . . . . . . . . . . . . . . . . . .38

AmCham White Paper Discussed at Meetings with Political Parties . . . . . . . . . . . . .40

n e w m e m b e r s . . . . . . . . . . . . . . . . . . . . .40N-Vision EnergySchneider Electric

m e m b e r n e w s

ADIS’ Golf Cup 2009 Results . . . . . . . . . . . . . . . .41

ING Bank Sofia Branch Expects High H1 2009 Results . . . . . . . . . . . . . . . . . . . . .41

Andreas Maierhofer Takes on as CEO of Mobiltel . . . . . . . . . . . . . . . . . . . . . .42

Added Value for Your Business Through Cost Optimization by Microsoft Bulgaria . . . . . . . . . . . .42

m u s i c

July Morning in Sofia . . . . . . . . . . . . . . . . . . . . .44

a m c h a m e v e n t s

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AmCham 15th celebration of July Fourth will be remembered for many reasons: we bid farewell to Ambassador Nancy McEldowney, the American College of Sofia provided a won-derful location for the event, our member companies sup-plied lots of food and drinks, guests won raffle prizes, there were spectacular fireworks, and even the weather was on our side. More than 2,000 guests joined the AmCham party to mark for the 15th time the Independence Day and the birth-day of the United States of America with the signing of the Declaration of Independence on July 4, 1776, in Philadelphia.

Right at 6 p.m. that evening “Georgi Robev” choir performed the American and the Bulgarian anthems, followed by the ceremony with presenting of National Colors of the U.S. Marine Corps. In a quite moving manner Ambassador Nancy McEldowney thanked the audience for coming to celebrate America’s birthday and U.S. - Bulgarian partnership, as she was given the floor by the master of ceremony David Hampson.

“Today we remember what it means to be American, and what America stands for along with its partners all over the

world,” Nancy McEldowney said. The envoy reminded that America struggled for what is right and true, no matter that the country had to stumble on the path. That, in her words, is the spirit or right and true that unites us in what we do, and this is the spirit of U.S.-Bulgarian partnership.

“It is that spirit that motivates your work every day, and what motivates AmCham in its work,” McEldowney said.

“It was an enormous honor to partner with AmCham Bulgaria and with all of you throughout the course of several amazing years,” the ambassador went on saying.

On the occasion of the US Ambassador leaving the country to take a new position in the Obama Administration the AmCham President Tony Hassiotis cordially thanked Nancy McEldowney for her consistent advocacy for a transparent and open business environment and her leadership in pro-moting the U.S.-Bulgaria bilateral relations.

Hassiotis expressed gratitude to Tom Cangiano, President of the American College of Sofia for hosting the event and thanked all sponsors and volunteers. n

AmCham July 4th Par t y Bids Farewell to Ambassador Nancy McEldowneyAmerican College of Sofia Presents а Perfect Location for the Celebration

HE Ambassador Nancy McEldowney addresses the AmCham community for 4th of July.

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Georgi Robev Choir welcomes the guests. AmCham train picks up guests to the heart of the party.

AmCham President Tony Hassiotis bids farewell to Ambassador McEldowney. Time for fun

Presenting the National Colors by the US Marine Corps. Sponsors stands – fully packed

Families and friends Cheers to the party!

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C o r p o r a t e s o c i a l r e s p o n s i b i l i t y f u n d r a i s i n g r a f f l e s

K i d s F u n & G a m e s

The fundraising from raffles was collected for charity pur-poses. A lot of companies – AmCham members and their business partners - contributed with 46 attractive prizes. David Hampson announced the winners of the fundraising raffles, meant to serve charity purposes. The contributors for the raffles were:

ACCOR Services BulgariaAVONBulgarian Telecommunications CompanyCentralni HaliCheque DejeunerCentransit.bg & ECO complex Old Bistritsa HousesCentransit.bg & Rex Hotel, Kalambaka GreeceCentransit.bg & Hotel Complex Molerite, BanskoGrand Hotel SofiaHilton SofiaKempinski Hotel Grand Arena, BanskoMetropolitan Hotel SofiaMotorolaPlesio ComputersRadisson Grand Hotel Sofia

Radisson SAS Carlton Hotel BratislavaRED DEVILSheraton Sofia Hotel BalkanTechnopolisYastrebets Wellness & SPA Hotel, BorovetsAllied PickfordsReader’s Digest

With its bouncing castles, swinging gondola, foam balls

shooting, marry-go-round, the kids’ corner kept the chil-

dren busy all evening on. Malchugan-Velikan clownes

provided a balloon show, a puppet show, and a magic

show. Red Devil – Right Rental Croquet corner, and

Moten Sport – X-treme ropes climbing were to add to the

entertainment spirit.

The delicious foods and beverages were provided by:

McDonald’s, McCaf , Radisson Blu, Pain D’or, Jim Beam ,

Coca Cola, Kamenitza & Stella Artois, Nestle Ice Cream.

AmCham cordially thanks to the main sponsors of the

event: BTC - Vivatel , AES Maritza East I, BAE

Systems, BMW Group, Dundee Precious Metals, and

also to supporting sponsors: America for Bulgaria

Foundation, Bulgarian VIP Travel, Bulgarian Land

Development, CMS Cameron McKenna, Landmark

Property Bulgaria, Motorola Bulgaria, Pfizer Bulgaria,

PSG Payroll Services, Unicredit Bulbank. The spon-

sors for the facilities were Krea Design with the

scene, Right Rental with the tents and Allied Pickfords

with the logistics.

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M u s i c a n d F i r e w o r k s

American College of Sofia band warmed the atmosphere with

heavy metal, rock and solo drum performances and prepared

the public for the famous Dirty Purchase band.

The traditional July 4th cake was eagerly awaited by kids and

grown-ups – and it came as big and tasty as usual.

Fireworks went off right at 9:30 pm just on time with Dirty

Purchase performance of “Celebration” – the audience went

crazy and the dancing floor stayed fully packed until mid-

night.

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The monthly publication of the American Chamber of Commerce in Bulgaria, the AmCham Bulgaria Magazine, celebrated its 100th issue with a media seminar and a party held on June 30 at the downtown Grand Hotel Sofia. The idea to combine a mini-conference, titled “Media and adver-tising in times of crisis,” and the maga-zine's anniversary was obviously success-ful. After receiving a lot of useful informa-tion related to advertising, journalism and public relations, the guests, gathered in the Sofia Hall of the hotel were invited to refreshments, pleasant conversations and live music at the coffee garden. This was a classic “2 in 1” marketing approach, which left everybody happy. “It was very useful for me. As a businessman, had the chance to look into the kitchen of advertising and PR”, said after the seminar the President of the American Chamber of Commerce in Bulgaria Anthony Hassiotis. And the party took off in good spirits, added Tania Kosseva-Boshova, member of the board of directors.

THE EDUCATIONAL PART

Everything was split into two perfect halves on the jubilee day.

The “Media and advertising in times of crises” seminar was marked by the sub-stantial interest displayed by the Bulgarian media as well. Crews from the Bulgarian National TV, bTV and Nova TV, as well as representatives of major print media report-ed on the event. The participants were addressed by Christopher Karadjov, a pro-fessor of journalism at California State University, Long Beach, who spoke about the future of print media and the basic

rules, which have to be observed in order to retain readers in competition with the internet and how to negotiate a cri-sis.

Kalina Petrova, co-managing director of Publicis Dialog Bulgaria presented several successful strategies in the sphere of public relations in times of crisis. She emphasized that difficult times present the experts in the branch with the opportunity to fresh up the image of the companies, to con-solidate brand loyalties and even attract some additional media attention – in case they manage to devise and imple-ment the proper PR actions.

The last presentation was delivered by Yordan Zhechev, cre-

AmCham Bulgaria Magazine Celebrates 100 Issues

A family photo at the award ceremony of 100 issues celebration of the AmCham Bulgaria Magazine. From left to right: Zachary Hampson – Grenville Bulgaria, Mila Tsaneva – Balkanstar, Stefan Dimitrov - Allied Pickfords, Gergana Grigorova - Hilton Sofia, Valentin Georgiev – AmCham Bulgaria executive director, Iliana Zacharieva – Postbank. Anthony Hassiotis –AmCham Bulgaria President, Boyko Vassilev – BNT, Milen Marchev AmCham Bulgaria Magzine editor-in-chief, Thomas Higgins – Balkan Accession Fund, Tanya Lozovich – Media S SMV and David Hampson. On both sides are the two Bulgarian top models with the spe-cially designed dresses for the event.

SPECIAL THANKS TO:

POSTBANK

TOYOTA

TULLAMORE DEW

BSS PROMOTIONS

ALLIED PICKFORDS

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ative director, DDB Sofia. Zhechev had broken his arm the previous day playing football and made a perfect parallel in his presentation between the gypsum plaster, which ham-pered the free movements of his arm, and the limited field of action for advertising in an environment of severely restricted budgets. The presentation covered also the parallel between the painful surgery he was to undergo, and the need for heavy reforms of advertisement strategies made urgent by the crisis. He ended his presentation by expressing hope in a slow but successful rehabilitation of his arm and of the advertising business towards the end of the crisis. The three lecturers were met with applause and interest; however, a genuine enthusiasm was displayed by the audience at the end of the seminar, when all who were present moved to the coffee garden for the merry part of the event – the party for the 100th issue of AmCham Bulgaria Magazine.

THE EXCLUSIVE AWARDS

The guests were met at the entrance by top models, dressed in custom - made dresses with the logo “100 issues” embroi-dered in gold on black silk. Immediately after the exquisite greeters the guests fell into the hands of the Tullamore Dew promo girls, who – together with the experienced Grand Hotel Sofia barmen - never left a glass empty.

The magazine surprised its guests by handing out special awards, made of elegant black metal with golden inscrip-

tions. The Chamber's president, Anthony Hassiotis, wel-comed the guests and the jubilee issue, then personally awarded Boiko Vassilev with the Best Contributor in 100 issues of AmCham Bulgaria Magazine award. The BNT Panorama anchorman has been contributing for more than 5 years already AmCham Bulgaria magazine analyses on domestic and international politics. The most prominent piece written by Boiko Vassilev for the magazine dealt with the court case against former Yugoslav dictator Slobodan Milosevic in 2006, the interview with US President George W. Bush in 2008, as well as many other works of the TV anchorman.

Christopher Karadjov, Ph.D., asst. professor of journalism, California State University, Long Beach made a presentation about the future of print media.

Yordan Zhechev, creative director, DDB, during his presentation “Advertising in times of crisis”

Kalina Petrova, co-managing director Publicis Dialog Bulgaria, presented sev-eral successful strategies in the sphere of public relations in times of crisis.

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The black metal plaque for Best Member Company Writer was awarded to Friedrich Niemann, currently General Manager of Hotel Hilton – Bucharest; while at a similar post in Bulgaria, Mr. Niemann wrote some of the most interesting travel stories published in the magazine. Friedrich could not receive his award in person, that is why Stefan Dimitrov from Allied Pickfords handed the plaque to Gergana Grigorova - Hilton Sofia General Manager's Personal Assistant.

The Best Member News Provider in 100 issues of AmCham Bulgaria Magazine award was presented to Еurobank EFG Bulgaria. Throughout its years as a member of the American Chamber of Commerce in Bulgaria, the bank was prompt in providing news, stories and pictures to the editorial staff of the magazine.

The “Member news” section of the magazine is among

AmCham Executive Director Valentin Georgiev and the Editor-in-Chief Milen Marchev writing down the schedule for the award ceremony.

David Hampson gives the award for Best Media Agency to Tanya Lozovich, Medis Media S SMV.

Zachary Hampson, member of the AmCham Board of Directors gives the award for Best Member News Provider to Iliana Zaharieva, Head of Corporate Communications Department of Postbank.

The President of the Amcerican Chamber of Commerce in Bulgaria Anthony Hassiotis awards Boyko Vassilev for the Best Contributor in 100 issues of AmCham Bulgaria Magazine.

Gergana Grigorova - Hilton Sofia receives the award For Best Member Company Writer on behalf of Friedrich Niemann. The award was presented by Stefan Dimitrov -Allied Pickfords.

Thomas Higgins, member of the AmCham Board of Directors gives the award for Best Advertiser to Mila Tzaneva, Balkan Star PR officer

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the most useful for our readers; however, there are only a few companies that manage to provide information about their news and events. Postbank was nominated for the award for its persistence in this aspect. The award sign was presented to Iliana Zaharieva, head of Corporate Communications Department of Postbank, by Zachary Hampson, member of the AmCham Board of Directors.

One of the most prestigious awards of the event was the Best Advertiser in 100 issues of AmCham Bulgaria Magazine. The metal plaque was handed as a sign of recognition to Balkanstar – the official importer of Mercedes-Benz, Dodge, Chrysler and Jeep. The company has been advertising on the back cover of the magazine for close to 10 years, which, in practical terms, won the award for the company. The plaque was handed to Mila Tsaneva, Balkan Star PR officer, by Thomas Higgins, member of the AmCham Board of Directors.

At the end of the ceremony, a special award was given to the media agency, which has advised the largest number of its clients to advertise in the magazine of the American Chamber of Commerce in Bulgaria, Medis S SMV, the Bulgarian branch of the world Starcom MediaVest Group chain. Throughout the years, Media S has advertised in the maga-zine its clients like Toyota, Vivatel, BTC, Sony, and many others. The award was handed to Tanya Lozovich, Medis S SMV CEO, by David Hampson.

THE MERRY PART

Immediately after the awards ceremony, the Music Idol-3 star, Alexandra, and her band took the floor. The musicians per-formed an almost hour-long gig with stylish and pleasant songs. The exceptionally talented singer was invited to the party thanks to the efforts of Toyota and Lexus – the two companies were partners of the magazine for its jubilee event. On this music background, the guests enjoyed the perfect catering of Grand Hotel Sofia and the seemingly inexhaustible source of wine, provided by the Sofia Wine shop and Allied Pickfords, and Irish whiskey provided by Tullamore Dew. One of the leading event management com-panies in Bulgaria, BSS Promotions, was in overall charge of the decoration, consisting of black and golden balloons with the “Issue 100” logo, as well as of the whole organization of the event.

The Executive Director of AmCham, Valentin Georgiev, received congratulations from all guests for the magazine jubilee.

Besides many representatives of the AmCham member com-panies, the event was attended by many journalists working for Bulgarian media, such as the deputy editor-in-chief of the 24 Hours Daily Borislav Zyumbyulev, BNT News Desk Head Vyara Ankova, journalists from Sega and Klassa news-papers, and many others. The star authors of the magazine, Marina Tsvetkova and Yuliana Boncheva, delivered special toasts. Because of the party bustle, the magazine editor-in-chief Milen Marchev failed to express his gratitude to the staff of the American Chamber of Commerce but did not forget to appear next day in their office to make up for his forgetfulness. n

The President of the American Chamber of Commerce in Bulgaria Anthony Hassiotis with Tania Kosseva-Boshova, member of the Board of Directors (left) and Iliana Zacharieva, Head of Corporate Communications Department of Postbank (right)

The promo girls for Tullamore Dew – the Irish whiskey that provided great atmosphere at the party.

The star from Music Idol 3 - Alexandra and her band played some evergreens at the party.

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„If demo-scopes were really capable of forecasting election results, then why vote at all?“ I do not remember who said these words first, but it emerged as one of the most clever comments for the July elections surprise.

Survey researchers, who are called „sociologists“ in Bulgaria, failed to see the powerful wave in support of GERB and were summarily exposed for their failure. But just imagine for a moment that they would prove to have made the right forecast. What would politics turn into then? Politics operates with human beings and there is never a place for

boredom.

It was the Bulgarian voters, who shared out the seats in the new parliament as follows:

l 116 seats for GERB – the right-of-centre party of Sofia Mayor Boyko Borissov, which was founded less than two years ago.

l Barely 40 seats for the Bulgarian Socialist Party (BSP), who governed until now.

l 38 seats for the BSP coalition partner,

the Movement for Rights and Freedoms (MRF) – the party, supported by Bulgarian Turks and Muslims.

l 21 seats for the nationalists from Ataka.

l 15 seats for the right-of-centre Blue Coalition, the most probable GERB part-ner in the future government.

l And 10 seats for the newly founded conservative and at the same time radi-cal „Order, Rule of Law and Justice“ party, known by its Bulgarian acronym RZS.

The Wave Called GERB And The Myster y Of Bulgarian Votes

By Boyko Vassilev

The winner of the parliamentary elections and future Prime Minister Boyko Borisov and the leader of his political party GERB Tsvetan Tsvetanov at the night of their victory on July 5, 2009.

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The 4-percent barrier turned out to be too high for the National Movement for Stability and Progress (NDSV according to its Bulgarian acronym, the former party founded by Bulgaria's former king, Simeon II), and for the business oriented LIDER-Novoto Vreme (LEADER – New Time) forma-tion, which relied on the charisma of the prominent transition-times politi-cian Emil Koshlukov and on the employees of the energy boss Christo Kovachki.

Barely a month earlier the European Parliament elections revealed

an entirely different picture .

Then, the difference between GERB and BSP was not 23 percentage points, but less than 6 percent; the NDSV received 8 instead of 3 percent and even had some 300 votes more than the Blue Coalition; LIDER had a point more and not a point less than RZS. Then things suddenly became confused. Bulgarians decided to vote. The surprisingly high voter turnout of 60.2 percent (compared to 39.8 per-cent at the European Parliament elec-tions, and 55.8 percent at the parlia-mentary elections in 2005) brought one more surprise – the wave called GERB.

No one was surprised that GERB received more votes than the rest of the parties, but how did GERB gather such a momentum? This is an impor-tant issue, said political scientists, who assumed the task in the night after the elections to explain why the forecasts were so far off the mark. How did the wave come into being? „It is because Bulgarians vote emotionally,“ an ana-lyst said. „Just the opposite – because the voter votes rationally,“ one of his colleagues countered. Paradoxically, both were right.

Bulgarians vote emotionally .

Bulgarians have been voting emo-tionally ever since the start of the transition – and this makes us simi-lar to all other nations in the world. However, Bulgarians' emotionality is one of the most irrational. Judge by yourselves:

The parliamentary elections in Bulgaria have stirred some major media interest

abroad as well – a large number of newspapers and news agencies have reported

on the event, and many of them dedicated large commentaries to the expected

outcomes and the major players (mostly Boyko Borissov) as well as to the problems

this country is encountering. Most of the foreign media reminded that Bulgaria lost

more than half a billion Euro during the mandate of the outgoing tripartite ruling

coalition, that the country was drowned in corruption scandals and failed in its drive

to deal with organized crime. Vote buying and future coalition bargains were also

among the issues highlighted by the foreign printed media. "Corruption" and "crisis"

were the two most frequently used words.

"The Independent": Meet the black-belt hardman aiming to lead Bulgaria, wrote the

British newspaper “Independent” . It dedicated a large story to the elections in

Bulgaria and profiled Sofia Mayor Boyko Borissov. Since communism collapsed 20

years ago, Bulgarians have been waiting for a savior to rid the land of its plagues:

corruption, nepotism and impunity for the powerful of the day. Today as the country

goes to the polls, hopes are now pinned on a bodyguard-turned-politician with

cropped hair, a karate black belt and the epaulettes of a general”; “The Independent”

wrote, adding that Borissov’s popularity is attributed to his “straight-talking” and truth-

fulness. “The question on everyone's mind is whether Mr Borissov – an ex-body-

guard to the late Communist dictator Todor Zhivkov and former King Simeon – is

capable and determined enough to confront corruption and the underworld”, the

British daily wrote. According to the newspaper, Resentment at home and abroad has

reached such proportions that only a root-and-branch overhaul to make magistrates,

politicians and crime bosses accountable can repair the damage.

Reuters: Crime and crisis focus of Bulgarian election. Reuter’s news agency notes

that Bulgarians voted on Sunday in a parliamentary election they hope will restart

reforms to combat endemic corruption and heal an economy severely damaged by

the global crisis. The Socialists will bear the brunt of voter anger „over a recession

and a climate of impunity“, which has turned Bulgaria „into the black sheep of the

European Union“. Despite the promises made by Borissov that he will manage to

deal with crime, there are still doubts because of his limited success so far and

concerns that his ambitions will stumble on coalition negotiations. A new government

must move fast to avoid new EU sanctions on badly needed aid, Reuters warned.

AFP: "The vote may result in a deadlock", Agence France Presse (AFP) wrote that

forming a new government may turn out to be extremely difficult and Bulgaria may

find itself in a deadlock. With the Ataka party excluded from the equations of the

Socialists and of GERB, the NMS, LIDER and RSZ (the Bulgaria acronym for Order,

Rule of Law and Justice) may emerge as key players for the next cabinet. AFP did

not exclude the possibility for new elections in the autumn and a further deterioration

of the economic environment.

"Deutsche Welle": Elections, marred by vote buying claims. The vote buying issue

was highlighted in a commentary released by the German media, which described

in details the various schemes. Deutsche Welle added that the elections campaign

had been “savage,” and that the Socialists have employed all possible methods to

remain in power.

"Moscow Echo”: The favorite pop band of Russia’s Prime Minister could hardly help

loyal BSP. The Russian radio informed that the favourite pop band of Russia’s Prime

Minister, “Lyube”, came to show support at the last pre-election concert organized

by the BSP. Even this help may turn out to be insufficient for the Socialist, “who

remained loyal to Moscow’s policies”.

Foreign Media on Bulgaria’s Elections

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l None of the governments after the first free elections in 1990 was re-elected. The pendulum is irresistibly swinging from left to right, and some-time stays in the liberal centre, for a change. At first glance it seems that the liberal centre represents and exception: the NDSV and MRF were in government both after 2001 and after 2005. But if we remember that the price paid in 2005 was to enter a coalition with the major NDSV oppo-nent on the elections – the BSP – than everything would click into place. Moreover, world-wide political surveys indicate that the Bulgarian political system is unique for its volatility – or by the tendency displayed by voters to hand power to yesterday's opposi-tion.

l For a second time, an extra-parlia-mentary party wins a majority, which is very close to being absolute. NDSV managed to do this in 2001, winning 120 seats (just several months after it had been founded), and now GERB achieved a similar success with 116 seats. The supreme irony lies in the fact that eight years after its initial sweeping success NDSV failed to pass over the 4-percent barrier: a warning, which Boyko Borissov should never forget.

l „Bulgarians do not elect, they pun-ish. Bulgarians never vote „for“, they always vote „against.“ Bulgarians do not respect their elites, it gives them pleasure to hate these elites.” I wrote these three sentences as a quote, as they reflect some of the most widely exploited banalities of the period of transition. Worn out of use – and hence true. True – and that is why we should remember them each time we go to the polls.

l „Bulgarians never elect a prime min-ister, they elect a messiah. Bulgarians expect somebody to mend things for them. Bulgarians put all their hopes on the new savior – and exactly when this savior starts returning to normality and gets used to power, he is thrown out with a powerful kick.” I wrote these sentences as quotes again, you already know why. Actually, there is something more to banalities. They fully apply to other states and nations as well. I will give only two names as an example, for the two opposite poles, the left and

Xinhua: Bulgaria may lose its Council of Europe accreditation. The Chinese

news agency reported on the problems, encountered by the Council of Europe

Parliamentary Assembly observers and quoted mission head Tadeusc Ivaninski

that Bulgaria may lose its accreditation if the elections turn out to be unfair.

Boyko Borissov, the populist mayor of Sofia, claimed victory last night in

Bulgaria's general election, the British “Financial Times” wrote. Projections

showed his new right-of-centre party would finish with about 41 per cent of the

vote. His Citizens for the European Development of Bulgaria (GERB) was poised

to capture 118-120 seats in the 240-member parliament, just short of an outright

majority.

"We're happy with these results, it's like winning a football match by seven or

eight goals to nil," Mr Borissov said.

Bulgaria's centre-right opposition GERB party is expected to start coalition talks

today, after winning a national election that increased the prospect of reforms in

the EU member to combat corruption and recession, wrote “The Irish Times .” GERB won on a promise to uproot the deep-seated crime that prompted the

European Union last year to cut aid, capitalising on voter anger over the

Socialist-led government's failure to stem graft and economic pain.

Party leader Boyko Borissov (50), a Sofia mayor nicknamed Batman after the

fictional superhero due to his zeal for action, said he would head the next gov-

ernment and reiterated his campaign promises to move fast on reforms.

With combat against corruption on the top of the election agenda, Sofia Mayor

Boyko Borissov and his centre-right Citizens for the European Development of

Bulgaria (GERB) party won yesterday’s parliamentary elections – the first after

the cou8ntry’s accession to the European Union in 2007, wrote Spain’s “El Pais .” GERB stands to win 115 to 117 seats in parliament, according to projec-

tions.

The Bulgarian Socialist Party and its leader, Sergei Stanishev, suffered a cata-

strophic defeat: they won a mere 17 percent of the votes against 39-42 percent

for GERB, “El Pais” wrote.

Bulgarian voters had their say and preliminary data indicate that there will

be a change in the guard in this Balkan state. A change has been due for

quite a long time. The ruling tripartite coalition, headed by the Bulgarian

Socialist Party (BSP) will be remembered for its contribution to Bulgaria’s

accession to the EU, which allowed the party to emerge into a new era of

its governing existence. At the same time, however, the coalition was involved

in a series of scandals, which is typical for perhaps only one other state –

Italy. Embezzlement of European funds, all-out corruption, a series of mafia-

style killings, poverty and snappish bureaucracy – that was the impression

about Bulgaria displayed over the last several years, wrote the German

“Süddeutsche Zeitung .” Boyko Borissov is now the new messiah – eight years after Simeon Saxe

Coburg-Gotha made his comeback. There are still suspicions that Borissov may

have contacts with the criminal underworld. First of all however he will have to

prove that the strong words and promises will not be in vain. In the government,

he will need most of all diplomatic skills and perseverance on difficult matters.

Bulgaria needs a new opportunity, and now it has come across its chance, the

“Süddeutsche Zeitung” wrote.

According to preliminary results from the parliamentary elections in Bulgaria, the

victory belongs to the opposition right-of-centre GERB party, which has received

some 40 percent of the votes, the Austrian “Die Presse” wrote. The Socialists,

headed by Prime Minister Sergei Stanishev, came up second with about 18 per-

cent of the votes.

Borissov has promised that corrupted bureaucrats and criminal bosses will wind

up behind bars.

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„The impact of the economic crisis and the efforts of the incumbents, headed

by the Socialists, to arrest corruption were the main issues during the elections

campaign, wrote Macedonia’s “Utrinski Vestnik,” adding that the Bulgarians

have removed from power by their vote all incumbent governments during the

last 19 years. “Utrinski Vestnik” comments that voters cast their ballots for a

reversal in Bulgaria at yesterday’s elections.

Sofia Mayor Boyko Borissov will be the new prime minister, wrote the Greek

newspaper “Kathimerini”. The Athens “Ethnos” daily expressed reservations about the chances of GERB to form a majority cabinet, while the “To Vima” commented that the party will seek a coalition with smaller right-wing parties.

„Bulgaria’s Socialists received a slap in the face at the vote for Parliament”,

announced in a headline the Greek “Ta Nea”. According to the “Eleftherotypia”, Boyko Borissov is expected to restore the trust of Bulgarians in the state institu-

tions.

Turkey’s „Hurriyet” defined GERB as “the moderate opponent of the Turks,”

which won the elections by a long shot. The cabinet of the Bulgarian Socialist

Party, which is accused of corruption and embezzlement, could not be saved

even by the Bulgarian-Turkish support against racism propagated by parties like

Ataka, the newspaper wrote. The Movement for Rights and Freedoms, whose

members and supporters are predominantly Turks, and which has been in gov-

ernment for eight years, will have 30 to 35 deputies with an electoral support of

13 percent, CNN Turk announced. A total of 13,365 emigrants from Bulgaria

exercised their right to vote in the 21 polling stations opened on the territory of

the Thracia region in Turkey. Emigrants with dual citizenship voted also in Edirne,

Kirklareli, Tekirdag and Corlu.

The right-of-centre party of the Sofia mayor won yesterdays’ parliamentary elec-

tions in Bulgaria, Romanian Realitatya TV reported. Borissov announced that he

expects to form a cabinet quickly but refrained from naming his future partners,

reported the Romanian Agerpress news agency. Asked whether he would head

the new cabinet, Borissov stressed that any non-affirmative answer would indi-

cate he declines to assume responsibility, the agency reported.

The parliamentary elections in Bulgaria were held with expectations for a change

in power, Croatia’s “Vjestnik” wrote. All parties, which campaigned for the elec-

tions, claimed they want to improve Bulgaria’s image, which has been marred by

corruption, and to restore the trust of the EU in this country.

the right – Obama and Berlusconi.

I do not imply that Boyko Borissov is Bulgaria's Obama or Bulgaria's Berlusconi. Many Bulgarians hope that Borissov will be able to restore order and bravely challenge the crisis as did Obama, while others appease them-selves that the world political scene has seen other strange characters and queer fish like Berlusconi. Borissov for sure is no messiah; Bulgarian voters, at least, already do not see him being a messiah. Looking at his prominent cheek-bones, biceps and biography, the voter really hopes that the General will be able to do something much more practical. To do what seems to be his best skill – to introduce order and rules. And, of course, send sev-eral people to prison.

This is the most important of all ratio-nal purposes for the „wave called GERB.“ There are also others. Because – yes – the second politologist was also dead-centre right:

Bulgarians vote rationally – even tactically .

Maybe for the first time ever, or per-haps they have always voted that way, but no one was able to see it. Judge by yourselves:

l The world is suffering from an eco-nomic crisis, Bulgaria is in a reces-sion, and the budget is badly strained and is already on the verge of col-lapse. What would be the better option in such a situation: a strong or a weak government? With a strong or weak parliamentary support? With a strong or not-so-strong leading party? The answers are obvious. Thus, the Bulgarian voter decided to close one eye on the lack of government experi-ence by GERB, and opened the other eye to see the strength, which is the only possible source of stability in a future government.

l Corruption is the major problem for the tripartite coalition. This is what they think in Brussels, and in Sofia, and in the deep Bulgarian province. Is there a better option – besides voting for the party of ex-cops?

l MRF leader Ahmed Dogan said during the campaign, that he is „the instrument

Members of political party GERB celebrating their victory in the city of Dobrich.

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of power“ and that he is „distributing the portions“ in the state. He increased the number of votes for himself, and at the same time increased substantially the votes against himself. Moreover, the anti-MRF wave turned into an anti-BSP and anti-NDSV wave. The Ataka and RZS radicals won, but most of the spoils went to GERB – the only party among the top players, which adamantly declared it will never enter a coalition with the BSP and MRF.

Besides, the measures the incumbents initiated against the opposition, and seemingly to their own benefit, at the end backfired:

l They, the incumbents, introduced the majority component into the pro-portional system. Did they rely on the fact that there are no outstanding per-sonalities in GERB? That the right-wing will split its votes, while BSP and MRF will join their local electorates (MRF conveniently refrained from nominating its own candidates in sev-eral regions, where it has stable posi-tions)? Did they expect that by winning some of the majority seats they would tilt the balance in their favour? None of this is of any consequence. Because, most unexpectedly, and actually quite logically, the right-wing voters did not split their votes and actually focused it on GERB. As a result, GERB won in 26 majority sec-tions, MRF – in five, and BSP and the

rest – in none. „Without the majority vote GERB would have had 13 parlia-mentary seats less,“ mathematics professor Mikhail Konstantinov, a vet-eran of the Central Electoral Committee, said. Thus, the new electoral practice did tilt the balance – in favor of Borissov.

l The incumbents did something else too: they turned down the 2 in 1 vote proposed by the opposition – to hold both the European and the parliamen-tary elections on the same day. The vote for the National Assembly was moved to hot July, as the incumbents hoped this will result in a lower turn-out, which would increase the weight of the hard electorates. So what hap-pened? Bulgarian voters looked around, saw the patched results from the European vote, got frightened, started thinking about the future, post-poned their holidays, decided that “coalition” is a dirty word, and made a quick calculation – voted tactically. Against coalitions. Against political patchworks. In favor of GERB.

With a 2-in-1 voting scheme, the incumbents would have achieved their goals while the opposition would be scalded. However, the result was exactly the opposite – the incumbents did a great favor to the opposition and it managed to avoid its own trap.

l Many people suspect that the

incumbents have done something else too: that they have tried to partition the political space, clandestinely cre-ating small parties, which, with a low voter turnout, would enter the parlia-ment and create a pseudo-alternative. So what was the result? The high turnout washed out the small parties, and some of them got drowned. Besides, the money spent on partisan engineering and vote buying went completely astray.

l BSP and MRF abandoned their style and embarked on a sharp, sometimes even hysterical, campaign. The result was a very nervous electorate. Every broadcasting of the notorious clip, in which the axe of Kostov and Borissov fell on aircraft and hospitals, brought new votes to the opposition.

So, may we say this time that the Bulgarian voter made a sober assess-ment, took the crisis into account, sensed that he or she was being manipulated, calculated the European vote results and decided to correct the situation? Sure we may. Does this mean that the vote was rational? Well, did we not agree that the vote was emotional?

Since we have started to talk parables and banalities, let us remember again the story, attributed to either King Solomon or to Nastradin Hodja, or to some anonymous judge. There were those two persons, who asked for judgment. The first presented elo-quently his case. “You are right,” the judge said. The second was even more eloquent, which impressed the judge, who said: “And you are right, too.” Someone from the audience asked in surprise: “Wait a little! How is it possible that both of them are right, if they claim opposite things?” „You are right too,” said Solomon-Nastradin.

Sounds like a sound generalization of the story about the two political ana-lysts. The Bulgarian voter did vote both rationally and emotionally. It is the lesson that is important. Namely, that one should never cheat the vot-ers, never underestimate voters and even less so imagine that one could forecast what voters will do. The Bulgarian voter is unpredictable – hence a genuinely free person. n

Former Prime Minister Sergey Stanishev casting his vote on the election day July 5, 2009. By now he does not have an intention to put his resignation as а leader of the Bulgarian Socialist Party, no matter the crucial loss at the elections.

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The probability that the 2009 budget may wind up deeply in the red was the red line in comments by economic ana-lysts, business organizations and – natu-rally – by politicians during the last several weeks before the parliamentary elections held on July 5.

BLITZ asked some of these analysts to explain in more detail what it is all about. And what should be done in case the new prime minister finds the trea-sury scooped up to the bottom?

Ministry of Finance data on budget implementation for the first five months of the year indicates that revenues fell by 6 percent compared to the same period of last year and amount to 11 billion Leva. At the same time, expens-es, (estimated at 10.4 billion Leva at the end of May) exceed by 24 percent the amount spent for the first five months of last year. The budget surplus accumu-lated since the beginning of 2009 is already by 92 percent lower compared to the same period of 2008.

The budget will dive into the red if the current trend is preserved for another month. It is only the incumbents, who claim that there is no reason for con-cern, that the economy is stable despite the crisis, and that the relevant budget buffers are in place. Latest assessments made by local economists however indi-cate that the state finances will be in the red by 1.5 to 2 billion Leva towards the end of the year unless the cabinet changes its spending policy.

There have been multiple warnings that the 2009 budget will end with a large deficit if the government continues to spend more than it can afford. The idea is that if the deficit continues to grow while revenues shrink, it will be impossible to avoid the impression of a chaos, lack of direction and instability, which will be unpleasant for the economy as a whole and will affect foreign investments.

According to the finance expert Kolyo Paramov, the government has been

spending like there will be no tomorrow, although money is scarce; at the same time, the whole system would be restrict-ed if payments are stopped.

“Everything around the government is veiled in mystery and it is not clear what are the contracts it has signed or what are the commitments it has assumed. The actions of the incumbents are highly unpredictable but it is too late to criticize,” Paramov said.

The empty treasury and uncontrollable spending are not the result of pure iner-tia alone, he added. This practice may be attributed also to the incompetence of the incumbents. Politicians and oli-garchs, according to Paramov, have implemented a program based on 88-89 percent of the people living in poverty and all-out hunger, with no competitive-ness, with an economic model turned upside down, etc. Paramov said that all this was persistently implemented over the last eight years and was devised on the basis of a comprehensive program of imaginary reserves and savings, which de facto guarantee only hunger and indebtedness.

It is a high time to sign an agreement with the International Monetary Fund in order to obtain full guarantees for the

currency board arrangement, he said. The sooner such an agreement is signed, the better. Otherwise the risk of a revolution would increase dramatically. If the budget is blocked, then the cur-rency board will be blocked too, Paramov said adamantly.

With an eventual agreement in place, however, the IMF will undoubtedly impose some specific conditions such as a substantial reduction of spending, which will frighten the incumbents. According to Metody Metodiev of the Market Economy Institute the outgoing government embarked on excessive spending as early as last year. The gov-ernment started spending money from the budget surplus and the fiscal reserve, with the objective to prop up the economy. The systemic and consis-tent drain of funds failed to stabilize the economy and resulted only in a pre-election spending and releasing funds to the partners.

The current situation will force the new government to readjust the expense section of its budget and substantially reduce spending.

According to Metodiev, the outgoing cabinet used to a certain point to observe a sufficiently strict financial

Budget Waiting for Boyko Borissov

Archive photo of the former Bulgarian Minister of Finance Plamen Oresharski presenting the state budget to the former Chairman of the National Assembly Georgi Pirinski in 2007. Now the new parliament will have to redo the state finance plan.

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policy, and only then started to spend uncontrollably. Currently, no one knows what has been left in the treasury. The new government would have two options: to amend the budget or drastically reduce spending. Metodiev claims that tax revenue alone has decreased by 12 percent during the first four months of 2009, which automatically means that spending must be reduced by 15 or perhaps even 25 percent.

The existing buffers are not a normal measure, which would have a genuine effect on economy, as these buffers were installed as a purely populist mea-sure. Salaries must be frozen. Large projects like the Belene Nuclear Power Plant and others, whose impact on economy is still vague, must also be discontinued. Regulations regarding business must be liberalized along with the existing bureaucratic obstacles.

The new government will have to start with a fundamental reform in at least one sector, for instance in healthcare. Before the crisis erupted, the treasury had accumulated some reserves for reforms, but these have already been exhausted. The peak of the crisis may well be already behind, but its effects will continue to plague the economy at least until the end of the year.

Economic growth will be about 1 per-cent, although the World Bank expects a 1.5-percent growth rate. An eventual IMF agreement could yield some posi-tive signals that Bulgaria is trying to restore stability. At the same time start-ing negotiations with the IMF will frighten investors. It would be better to cut expenses rather than seeking help from the IMF, Metodiev said. In his words, the outgoing government has intentionally delayed the release of the Ministry of Finance budget implementation data in order to hide the black holes in the public purse.

Prof. Dr. Dimiter Ivanov, a prominent economist, said Bulgaria’s crisis is not a crisis of liquidity but of indebtedness, extensive crediting and solvency. The crisis has hit the real sector and does not immediately affect microeconomics. The main illness of Bulgaria’s economy stems out of the excessive indebted-ness, he said. Therefore, the anti-crisis program must be directed towards a

restructuring of the liabilities of compa-nies and households. “Bulgaria is on the threshold of 3 to 5 years of fiscal instability and budget deficits,“ Prof. Ivanov said.

He expects that there will be problems with balancing the budget this year, with a deficit of at least 1.5 – 2 percent. In his words, the proper measures initiated by the finance and banking sector must involve the introduction of a progressive income tax scheme, reduction of the value-added tax (VAT) to 15 or 18 per-cent, tax bonuses of up to 1,500 Leva, non-tax family bonuses, bonuses for students from poor families. ”Bulgaria

must use the next 3 to 5 years for a total change in the economic model. The currently dominant interpretation of the roots of the crisis is incorrect, improper and unclear. And therapy may not heal the causes without an exact diagnosis,” Prof. Ivanov said.

A flexible arrangement with the IMF is necessary to allow Bulgaria access to the assets from the Fund according to the requirements of its anti-crisis pro-gram. “We have indications that the financial health of some of the banks is not that stable. There must be legisla-tion dealing with the re-capitalization of the banks,” Prof. Ivanov said. n

According to Georgi Kadiev of the Bulgarian Socialist Party (BSP), the outgoing

cabinet is performing within the expense framework as set by the budget. The

problem is related to the lack of some of the expected revenue, which may

amount to as much as 20 percent of the budget target by the end of the year.

At the same time however, there are buffers, which are equal roughly to these

20 percent. “If things continue to develop like this, the budget at the end of the

year will wind up at a zero or at a slight deficit”, he stressed. If, however, revenue

plunge deeper, then the situation will become very difficult. Besides, revenue

depends on external factors; tax revenue for instance depends heavily on oil

prices. According to Kadiev, the treasury is missing some 4 billion Leva in rev-

enue, which is offset by the reserves and the budget surplus, estimated at 30

percent, so that the combined amount is roughly equal to the missing revenue.

The Budget Act contains a provision, which allows government to reduce spend-

ing to the level of the revenue, which means that even without an amendment

of the budget the cabinet may cut expenses in case it sees that the revenue is

not enough.

The outgoing government is adamant that its finance policy is correct and the

budget buffers are approximately equal to what is missing as revenue. That is

why the budget will be balanced at the end of the year and will not accrue any

deficit.

According to Kadiev, the fall of revenue to the treasury is not dramatic and there

is no reason to become concerned. The BSP is well aware of the fact that the

current budget will have to be updated. “The new rulers should not waste any

efforts as in the end the result will be the same,” Kadiev said.

As far as an IMF agreement is concerned – we should avoid that, Kadiev said.

We should not take money from the IMF as we are still not pressed with our

backs to the wall, unlike Turkey of Croatia, for instance. “We have more reserves

and less inflation than these two countries, and there is no reason to sign a

protective agreement as advised by almost all economic analysts,” he stressed.

According to him, the IMF is sending two signals – a positive and a negative.

The positive signal is that a protective agreement allows for more confidence

among investors in Bulgaria and that there will be a guarantor of the proper

economic policy. “But the very fact that we had no other option but to turn to

the IMF generates exactly the opposite signal – that the government does not

believe in its capabilities and is forced to look for support elsewhere,” he

added.

Response from the right

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Nothing is the same in the Bulgarian tourism industry. While the trends in the sector until the end of 2008 were still predict-able, with forecasts for an annual increase in the number of tourists of 20 percent or so, now nobody dares to forecast what is going to happen in the next few months. One thing is certain: the global financial crisis has completely restructured the local tourism industry, which is one of the most profitable sectors of the Bulgarian economy.

Data from the State Tourism Agency (STA) show that by the end of May Bulgaria was visited by the same number of tour-ists as in the first five months of 2008. After the disturbing decline in visitors from January and February, the sector seems to have stabilized with the approach of the active sum-mer season. Nevertheless, tour operators and hotel managers report a reduction in the number of clients across the board. To entice tourists during a crisis many establishments have cut their package prices drastically. Others offer additional bonus-es, such as free deck chairs and parasols, sports entertain-ments, excursions to nearby landmarks etc. In many places on the Bulgarian Black Sea coast, however, despite the fears of a weak season, prices have remained unchanged. Therefore a record high number of Bulgarians are going to spend their vacations in the neighboring Greek and Turkish resorts, which obviously have demonstrated more flexibility in the new situa-

tion. According to Anelia Krushkova, STA’s chairwoman, the year 2009 features many last-minute reservations. Unlike in previous years, when tour operators arranged bookings months in advance,

now there is not that much planning .

Clients make last-minute reservations, relying on bigger pack-age price reductions, which makes the season hard to pre-dict.

“For the past few months there has been a steady decrease in the number of tourists from the United Kingdom and Russia, which traditionally fill up the Bulgarian beach resorts,” Krushkova said. “That is due to the fact that they have bought enough real estate in Bulgaria. More than 40,000 apartments are now owned by British citizens and we no longer count them as tourists. It is a similar situation with Russia. Our tour operators and hotel managers voice dissatisfaction with the smaller number of Russian holiday-makers. That is also due to the fact that many Russians have recently acquired property in Bulgaria. The owners of houses and apartments do not use tour operator and hotel services and some of them even stay permanently in this country. That gradually changes the struc-ture of tourists in Bulgaria.”

2009: Tourism Industr y Keeps Fingers Crossed

Crisis has quelled investors’ appetites, halting unchecked hotel construction and damping property prices

By Mina Georgieva

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Since the beginning of the year there has been a surprising rise in the number of visitors from Israel, the former Soviet republics and Central Europe. As a matter of fact, even in 2008 bookings from countries such as the Czech Republic, Hungary, Poland, Slovakia and Slovenia were at a pretty good level. STA reps said that these are the countries where the organization is going to launch an active tourism campaign in the near months. An unprecedented interest in Bulgaria is demonstrated by Romanian tourists as well. For the first four months of the year their number has gone up by 80 percent.

The number of foreign tourist arrivals in Bulgaria in April fell 5.4 percent, year on year, data of the National Statistical Institute (NSI) show. Nevertheless, the decrease in holiday-makers has slowed down since the beginning of the year: in February the drop was 10.6 percent on an annual basis.

These data are

encouraging for the tourism business,

which hopes to make up for the decline in foreign tourists until the end of 2009 and reach the same number of arrivals as in 2008. This year, though, foreign and Bulgarian tourists alike are going to spend less money and the sector’s revenue may drop up to 9 percent.

While foreigners reduce their trips to Bulgaria, more and more Bulgarians travel abroad. In April 2009 a total of 482,929 Bulgarian citizens went abroad, up 5.9 percent year on year. An impressive increase is observed in the number of trips to Greece: 76.2 percent on an annual basis, while Greeks cut their trips to Bulgaria by 16.3 percent. Although the active tourist season has not begun yet, the data may mean that an increasing number of Bulgarians will be choosing the Greek sea resorts instead of the Bulgarian Black-Sea complexes.

According to National Statistical Institute data, 54.7 percent of Bulgarians travel abroad on business, 24.3 percent are tourists, 17.7 percent visit friends and other trips account for 3.3 per-cent. The bulk of foreign visitors in April 2009 came on vaca-tion (33.8 percent), followed by transit tourists (26.2 percent), business travelers (22.9 percent), other visitors (14.5 percent) and people visiting friends (2.5 percent).

There will be no drop in the number of tourists on the Black Sea coast this summer said Varna Chamber of Tourism Chairman Marin Neshkov. He even expects a boost in revenue, since the financial crisis prompts cost reductions. “My fore-casts are based on my own observations and crisis studies, as well as on analysis of the World Tourism Organization and the World Travel and Tourism Council,” Neshkov said. He sees no reasons for the gloomy expectations for a big drop in the tourist flow to materialize.

This year, though, there will be

a shortage of qualified staff,

because tourist complexes prefer seasonal workers, while professionals find jobs mainly outside Bulgaria, Neshkov com-mented. In his words the quality of labor in tourism in Bulgaria

has declined in the past couple of years. Despite these opti-mistic forecasts, the start of the summer season on the Bulgarian coast is somewhat sluggish and hotel managers fear that they will be unable to pay their loans due to the shortage of clients.

“If we make a tiny profit or loss at the end of 2009 we will consider the year successful,” said Ms Krushkova. “We are watching closely the neighboring competitive markets like Greece, which have similar problems. I think that successful have been those entrepreneurs who have struck a good bal-ance between quality and price. I was on the Bulgarian coast and I was convinced that most of the high-category complexes are almost entirely booked for July. At the same time the hotels that are far from the beach will have serious problems this

By the end of April Central and Eastern Europe became one

of the most affected regions in the world in terms of inter-

national tourism, data of the UN World Tourism Organization

show. According to the preliminary information, for the first

four months of the year foreign tourist arrivals in the region

have declined more than 13 percent. On a global scale,

international tourism shrank 8.4 percent. Between January

and April the tourism industry serviced 247 million foreigners

worldwide. For the corresponding period in 2008 this number

was 269 million. The tourist flow to Europe has decreased

10.4 percent, UN data show. In this respect the Old Continent

performed worse than the Americas and Asia. Tourist arrivals

in the Americas dropped by a touch above 5 percent, while

the fall in Asia was 6 percent.

The data for Central and Eastern Europe show that arrivals

in the region declined 13.2 percent: a rate higher than in

other parts of the continent. On a global level, Central and

Eastern Europe outperformed only the Middle East, where

foreign tourist arrivals slumped a total of 18 percent on an

annual basis.

Despite the fears of pirate and rebel attacks, Africa evi-

dently remains attractive for tourists. The foreign tourist flow

to the continent increased 3 percent for the first four months

of the year. That is the only region that has recorded a hike

in foreign tourist arrivals (The southernmost parts of America

also posted a token rise for the period of 0.2 percent.). The

United Nations experts explained the growth with the strength

of North African destinations and the increasing interest in

countries like Kenya.

Until the end of last year Europe remained the strongest

magnet for foreigners: the continent attracted 488 million

people or 53 percent of all foreign tourist arrivals in the

world. For comparison, the Americas held just a tad over

16 percent of the market. Following Europe in the ranking

was the region of Asia and the Pacific with a relative share

of 20 percent

UN: Foreign tourist arrivals in the region down by more than 13 percent

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summer.”

So far the government has drafted strategies for ecological and rural tourism, documents are under way for wine, culinary and cultural tourism. The government believes that the imple-mentation of the planned measures will increase the tourism revenue to 7.9 billion Euro in 2013. By comparison, the revenue in 2008 was 2.6 billion Euro. In five years tourists are expect-ed to spend 108 Euro a day in Bulgaria, compared to 58 Euro last year.

The measures and actions envisaged in the strategy will be financed with resources from the government budget, the municipal budgets, the operational programs, the Program for Development of Rural Regions in 2007-2013, the tourism asso-ciations, and own financial resource of the businesses provid-ing tourism services.

STA has recently announced it will allocate nearly 50,000 Leva for information and communication materials to advertise tour-ism in Bulgaria. The money comes from the Regional

Real estate brokers forecast a drastic

reduction in the prices of coastal prop-

erties this year. The trend also con-

cerns apartments and rooms for rent

in the resorts. Apartments by the sea-

side started cheapening as early as

last year, due to the overconstruction

of resorts and the reduced demand

from both Bulgarian and foreign cli-

ents.

There is one more reason for the

withdrawal of investments from the

seaside this year, namely, the eco-

nomic crisis. Although most apart-

ments in the resorts are bought by

people of means without bank loans,

clients abstain from such investments

at this stage. Real estate agencies

commented they expect a decline in

the interest shown by foreigners, who

were the main property buyers at the

seaside in the past few years. The

reason of course is the crisis that has

hit much harder in Europe, the United

States and Russia.

To avoid a total stagnation of the real

estate market on the coast, developers

have seriously cut their prices per

square meter. Currently the prices

range between 250 and 300 Euro.

There are still offers at 2,000 Euro/sq.

m., but only for the most luxury resi-

dential buildings, located almost on the

beach.

Realtors, however, expect apartment

prices in the resorts to continue falling

in the summer. Comparatively high

prices are projected for the most

attractive and expensive apartments in

gated complexes near the beach,

which are facing the sea. There the

rates may even reach 200,000 Leva.

Although brokers predict a drop in

coastal property prices they do not

expect a huge flow of potential buyers.

Due to the crisis, developers do not

dare to make big investments, because

they fear their projects may remain

unsold or unrented.

Another reason for the falling price of

real estate is depreciation. Coastal

apartments decrease in value by the

week, brokers from a Varna-based

agency underscore. Thus, if a client

buys some property at a given price, in

a week’s time the property may be 15

or more percent cheaper.

Though the interest in this type of real

estate has decreased drastically, there

are still inquiries for purchases mainly

from foreigners, although their number

is much smaller than in previous years.

Those are mainly rich people with sav-

ings, who do not have to take mort-

gages. Buying coastal property is

advantageous for them at the moment,

because prices have fallen consider-

ably.

These proprietors most often buy

apartments on the beach in order to

rent them to tourists in summer.

According to brokers, the rents of such

apartments for foreigners are higher

than for Bulgarian tenants. Very often

buyers use their apartments to spend

their vacations there and then offer

them for rent of 50 to 100 or even 200

Leva per day, depending on the loca-

tion. The reason for the higher price is

that the apartments are fully equipped

with washing machines, refrigerators,

electric cookers, television sets, furni-

ture, air conditioning.

Russians are expected to be the main

buyers of real estate on the Black-Sea

coast this year. Small apartments of

40 to 50 sq. m. will be the best-selling

property and their prices should not

exceed 50,000 Euro.

Coastal apartments get cheaper

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Development Operational Program under a scheme for provid-ing free financial aid in support of efficient national marketing of the tourism product and improving the information servicing. The financing will be used for information boards, leaflets, banners, posters, fliers etc. In late April the STA announced another public procurement tender: for the development of a marketing survey on the territory of ten countries that are the main generators of tourists in Bulgaria: Germany, Great Britain, Greece, Ukraine, Serbia, Romania, Turkey, Russia, Sweden and the Czech Republic. The results will be used as a basis for the taking of marketing decisions and promotion of Bulgarian tourism on these markets.

Sofia advertises tourism in Bulgaria in the former socialist countries

The Bulgarian state has invested more than 1 million Leva to advertise its tourism industry in the Czech Republic, Hungary and Slovakia. The campaign started a few days ago and will continue until the beginning of September.

It is the Central European ex-socialist countries, including Poland, as well as Moldova, Lithuania and Israel that drive the increase in the number of tourists in Bulgaria. A rise has been registered in the number of visas issued to Russians, but a good part of them are Russian citizens who own property in Bulgaria.

The northern Black-Sea coast remains an attractive destina-tion for Romanian tourists, with an increase currently being observed of 57 percent compared to last year. Therefore Bulgaria continues to be advertised in its northern neighbor. Compared to last year, however, there has been an appreciable drop in the number of West European tourists. The decline in the UK visitors is about 35 percent; however, more than 40,000 British citizens have bought their own property in Bulgaria, Krushkova said. A serious decrease is also observed in Serbia, Macedonia, Germany, etc.

The situation is very dynamic and figures change by the week; it will be a successful season if we get a zero result, say hotel managers and underscore that the forecasts for the European Union are for a 3.5-percent decrease in revenue.

In the region, only Turkey still makes good profits from tourism, while the outflow of travelers from countries like Croatia and Cyprus is much larger than in Bulgaria. Statistical data for early June show a 7.4-percent drop in the number of tourists in Bulgaria; hotel occupancy in the interior is currently higher than on the coast.

The good news this summer is that the

crisis has curbed investors’ appetites,

as a result of which uncontrolled hotel construction has nearly ground to a halt. Also, more and more tourists prefer the mountain resorts and destinations. Unlike their coastal peers, the owners of mountain hotels report good booking levels for the coming months.

About 30 percent of the construction projects in the region of

Bourgas have been suspended due to the economic crisis, data of the Bourgas Construction Chamber show. A similar trend is observed in Varna, as well as in the other coastal resorts. The reason for that is that construction companies are experiencing difficulties with bank financing because of the economic crisis.

Chamber’s data indicate that about 2,000 construction workers involved in the projects have remained jobless and their num-ber is expected to increase. The projects that have not been suspended yet are proceeding at a very slow pace, industry representatives said. Only a few construction companies, how-ever, have gone bankrupt so far. Yet the forecasts are gloomy: many construction businesses are expected to go broke and unemployment in the sector to rise.

Real estate experts advise their clients to avoid buying prop-erty in construction, because it may never be completed. If you are going to buy an apartment at the seaside, you’d better look for a finished one, they say. n

The construction of the Stara Zagora – Karnobat stretch

of the Trakia Highway is expected to begin by this year’s

end, experts of the Ministry of Transport said, presenting

road projects financed under the EU Transport Program.

Construction work cannot start immediately, because

some sections of the future autobahn are part of Natura

2000 network of protected areas or private property that

has to be expropriated, the experts explained. All these

administrative obstacles, however, will be overcome in

three or four months.

The government will announce then a public tender for

the construction of Trakia Highway. The company that will

be selected has to build the road in not more than three

years. Thus, if construction works begin by this year’s end,

by 2013 people living in Sofia will shorten their travel time

to Bourgas by at least an hour. The stretch to be built is

115 km long, and the financing provided under the pro-

gram amounts to 350 million Euro.

Initially, the money under the program was intended for the

construction of the Struma Highway, but the amount

turned out to be insufficient, because the project required

the building of tunnels at the cost of at least 600 million

Euro. Thus, to avoid losing European funding, the financ-

ing was redirected to Trakia. Some 250 million Euro,

however, will be allocated to two stretches of the Struma

Highway, linking Sofia with the Kulata border checkpoint.

The length of these road improvements is 77 km. No

special permission is required from the European

Commission for the transfer of part of the funds under the

program from Struma to Trakia. The decision can be

made by the Transport Ministry.

Travel to the seaside shorter by an hour – from 2013

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The boom is out, and the crisis is in. And the crisis seems to be in for a long time, and threatens to stay disguised as recession. Perhaps foreign investors will leave Bulgaria for home, exhausted by problems, losses, and lack of clients and orders? Or because the govern-ment of the tripartite coalition did not provide them with sufficient preferences or has created obstacles?

Mariana Mensies, consultant for the Canadian Martern company, used these questions as a background for claiming that there is a slowdown in foreign investments. She added that she per-sonally knew a lot of companies, which have left this country but failed to name even one. It is an indisputable fact that

many foreigners got burned

by the widespread bureaucracy and by problems with receiving licenses. Each new government proclaims it will fight corruption, the outrages of the ineffi-cient bureaucracy, and that permit and licensing regimes will be reduced. There might have been some progress but it looks like a drop in the sea. The proverbial “single counter” services never materialized. And if by some obscure chance this “single counter” does exist somewhere, it is considered as a rare oddity. The dream of Simeon Saxe Koburg-Gotha, disclosed when he assumed the post of prime minister, “to replace the chip,” was forgotten. Mentality persists as the major problem. The level of services in Bulgaria is below the threshold of acceptable per-formance. The old mentality is still alive, in both the state and the private sector. Any person, who would decide to invest capitals in Bulgaria, must have nerves of steel in order to be able to bear the lack of bureaucratic politeness, border-ing on rudeness. Still, a foreign investor still has the chance to be favoured by a half-smile, while the Bulgarians are treated in their own country like unwant-

ed subjects as they always stumble on the rude “What do you want?” at any desk or official phone line.

What is actually happening to foreign investors in times of crisis? Well, they start wondering how to reduce expens-es and optimize the use of every single euro. Most of them decided to stay, while some decided to leave, especially the investment funds engaged in the real estate business.

Others decided to limit their scope of operations

The case of a Lithuanian investor with an office in Bulgaria, with mega-proj-ects for a huge recreation centre and with a first-class investor certificate is not a rarity. Currently, all that is left of the mega-project is the land under a privatized factory, a security guard, a secretary and the investor himself. And whenever they need some work done, they hire accounting and legal firms, construction workers etc.

Because of the crisis, some American investors have cancelled their invest-ment projects in Bulgaria, but most of the large conglomerates and corpora-tions are still looking for ways to exploit local advantages. According to outgoing U.S. Ambassador Nancy McEldowney, new investments are being made in

Bulgaria and new jobs are created despite the global challenges. The con-tract between the government and AES has pushed Bulgaria towards a vitally important sector like renewable energy.

It was reported recently for election purposes that

Bulgaria is a heaven for foreign investors

and that this country has been ranked second, allegedly according to UN data, after Hong Kong in terms of attracting investments. A total of 21 billion Euro have been invested in Bulgaria over the last three years. Foreign investments stood at 8.5 billion Euro in 2007 alone, while the amount was set at 1 billion Euro for the first four months of 2009, according to data released by the Foreign Investments Agency. Germany, Greece and Cyprus were quoted as the main source of investments. A major growth in British investments in real estate was recorded some 3-4 years ago. Now the British, who have suffered from their own sub-prime crisis, are going back to their island and are trying to sell their properties in Bulgaria.

Investors from Bulgaria’s southern neighbor, Turkey are definitely here to stay. New investments are expected to come from Turkey. For the time being,

Will The Crisis Drive Foreign Investors Away?

By Galya Clark

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the largest commitment was made in the glass factory Sisecam. Turkish companies are priming to shift their production to Bulgaria, Alkan Ispir, head of Ace International, said. His real estate development company is engaged in several housing and trading projects. Ispir claims that Turkish companies have grown used to crises since 2000 and will not abandon Bulgaria, regard-less of whether they are engaged in real estate development or building con-struction. The company policy in a cri-sis environment is to employ a selective approach to projects. Recession has delayed some of the housing, shipping centre and office building projects.

Many Turkish companies, selling furni-ture, are trying to weather the crisis in the easiest possible way. They close some of the outlets and try to increase sales by acceptable discounts and pro-motions. "We do not believe that Bulgaria is in a grave crisis," said Firat Eksiogulari, Executive Director of Istikbal. Other Turkish investors would also come to Bulgaria, if the govern-ment decides to solve the visa issue, Turkey’s Ambassador to Bulgaria Mehmet Gücüg said.

Slovenia did not display any interest in investing in Bulgaria until 2002, as it was oriented mainly to the Western Balkans. Now, however, Bulgaria is in their sights. The large pharmaceutical company KRKA, the KD Group and the East West Bank are already here. The large Slovenian company Merkator is planning serious investments in Bulgaria – it plans to open two large hypermar-kets next fall. KRKA Bulgaria does not plan to leave and is even planning on increasing its personnel in Bulgaria by more than 10 percent, Alexander Spassovski, the company’s director for Bulgaria, said. KRKA is expanding its portfolio on the Bulgarian market. Regardless of the crisis, there should be some bilateral investments – both Bulgarian in Slovenia and Slovenian in Bulgaria, Spassovski said. He added that even more investments from Slovenia will come this way after Ljubljana opens its embassy in Bulgaria.

Bilateral investments with Azerbaijan are still small. Azerbaijani companies are interested in Bulgaria’s infrastruc-ture, industrial production and building

construction. Rauf Ahundov, an Azerbaijani, is managing the former local Rila Style company. He has aban-doned orders from Western companies and works mainly for his own collec-tions. Ahundov does not plan any per-sonnel cuts and relies on business optimization through proper planning of revenue and expenses. The company even plans to create some 60 new jobs within the next 18 months.

The Estonian real estate development company Arkovara is doing business in all three Baltic states as well as in Bulgaria, Ukraine and Romania. The Bulgarian daughter company Arko Invest admitted that there is a decline in the sector sales and that all companies in this sector are experiencing problems. „We spare no efforts to stay afloat,” Arko Invest CEO said.

All companies in the construction busi-ness have gone or are about to go bank-rupt, Ovanes Melik Pashaev, president of JBL Bulgaria Holding, said. The holding was established with Russian and Bulgarian, and Mr. Pashaev is of Armenian origin. The crisis, according to him, will persist for about five years. The world must be reassessed in terms of financ-ing, business and relations, he said about his vision for emerging out of the crisis.

Swiss companies, which have already established operations in Bulgaria, are not that many but do not plan to leave as their investments pay back. The Swiss are carefully assessing the mar-ket opportunities and are precise in their outlook, said Kiril Drenski, presi-dent of the Bulgarian-Swiss Chamber of Commerce. „We are a permanent community of Swiss companies. Unfortunately, we do not expand, per-haps – at a political or economic level – we fail to attract Switzerland’s interest to Bulgaria”, said Dimiter Marikin, man-ager of Swiss Certification company SGS Bulgaria. The Swiss Holcim Bulgaria cement manufacturer is also priming for the possible impact of the crisis. The company has limited its investment program and has slightly reduced its personnel.

2009 created challenges for all pharma-ceutical research companies, as the respective mother companies are still in the process of trimming their personnel. However, the Bulgarian branch of the

Swedish AstraZeneca is increasing the number of its employees and to emerge into new therapeutic spheres, said Zoya Paunova, AstraZeneca CEO for Bulgaria.

Forecasts indicate that foreign invest-ments in Bulgaria will be substantially lower – by some 30 to 50 percent, said Alex Nestor, head of Investment Projects at the Canadian Chelopech Mining.

Belgium is among the top five largest investors in Bulgaria. The kingdom’s investors are interested in new invest-ment projects in Bulgaria, especially in the sphere of finance. However, the rest of the sectors, among them the tradi-tional Belgian producers of gold jewel-lery and boutique chocolate, are looking for Bulgarian partners with the objective to expand their markets.

There is hardly a state anywhere in the world, which would refrain from promot-ing a special program or a law for pro-viding incentives for foreign investors, offering various incentives. Every coun-try boasts

an important strategic location and friendly attitudes of its citizens .

In practical terms, however, most of the countries are currently experiencing serious difficulties in attracting invest-ments. The worst cases, of course, are observed in states with military conflicts or where paramilitary factions harass foreign tourists.

Perhaps the new Bulgarian government, which will be formed after the July 5 parliamentary elections, will create bet-ter conditions to convince investors to stay and at the same time attract new investments. This new government will have to display goodwill and expand and improve preferences. This is per-haps the only way to provide incentives in a cold, windy and rainy investments climate. Still, this is not the climate before Bulgaria’s accession to the EU, and the current climate is quite different from the period before the introduction of the currency board arrangement. The new government will undoubtedly encounter a multitude of problems in implementing its anti-crisis program. One of these problems, undoubtedly, will be to retain the “old” and attract “new” foreign capitals. n

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Projections for soft-landing scenarios in the emerging markets of Central and Eastern Europe made at the outset of the global economic and financial crisis last year failed to materi-alize. Indeed the worsening of the circumstances in these countries’ main trading partners including the US and Western Europe has brought about the full-blown impact of staggering demand, restraint in international trade, and drying out capital flows.

The local economy alike has moved to a hard-landing sce-nario as indicators in the first five months of the year. Official data of the stats office confirmed a contraction of the GDP in Q1 of 3.5% y/y. New observations of seasonally adjusted quarterly data indicated a drop in the domestic product of 5% in Q1, after the 1.6% slide in Q4 last year, meeting the defini-tion of technical recession. GDP decline is expected to steepen in Q2 and prospects for recovery are not forecast until the end of the year. Most recently updated projections for the local economy vary from a drop of 1.5% (World Bank) to 3.5% (IMF).

External position weakens in the first five months of the year

On top of the worsening state of the real economy come even more worrisome signals from the persistent and quick deterio-ration in the country’s external position in the first five months of the year. The stock of international reserves at the end of May now cover only 90.3% of the short-term external debt after falling below the sanitary ratio of 100% recommended by the IMF at the end of last year. The erosion of the stock of international reserves (8.9% y/y at end-May) and the hike in the stock of the short-term debt (20.4% y/y at end-March) were accountable for the deteriorating performance. Government deposits have dropped by EUR 197bn since the start of the year and made up 32% of total reserves at the end of May.

The foreign reserves declined by 8.9% y/y and 0.1% m/m to EUR 11.78bn as of end-May, according to data of the central bank. The contraction sustained for a third consecutive month in annual terms, while the monthly downward correction started as of December. The deposit of the government declined by 0.9% m/m and the money in circulation also had a negative contribution. The holdings of commercial banks increased by 1.4% m/m. The contraction of foreign reserves has reached 7.3% since the beginning of the year and shows worsening of the line adequacy ratios due to faster accumula-tion of external debt. The ratio of foreign reserves to short-

term debt deteriorated further to 90.3% as of end-March from 91.5% as of end-February, 95.7% as of end-2008, 126.3% at the end of 2007, and about 300% in 2002-2004.

The gross external debt increased by 20.4% y/y but dropped by 1.1% in a month to EUR 36.4bn as of end-March, according to preliminary data of the central bank. The annual growth decelerated from 25.3% y/y in February and 27.8% y/y in January. The total foreign debt accounted for 107.4% of the projected full-year GDP, falling by 1.2pps as compared to one month earlier. The short-term debt, covering liabilities with original maturity of one and less than one year, rose margin-ally to 35.9% of the total as compared to 35.7% at end-Feb-ruary. It widened from 32.6% at the end of 2007 and 30.1% at end-2006. The share of inter-company loans, which are not included in the short-term debt statistics, accounted for 36.4% of the total external debt as compared to 37% a year earlier and 35.1% at end-2008.

Government perceives no need for IMF arrangement

Despite indications for the deterioration in the country’s exter-nal position, the official government stance is that an agree-ment for financial assistance from the IMF is currently not necessary. Indeed, Finance Minister Plamen Oresharski believes that subscribing to the countries in need of IMF assis-tance might in fact hurt the credibility in the policies of the government and therefore erode further investors’ confidence, potentially triggering their withdrawal from the country. Officials even argue against the need for primary consultations with the monetary institution to speed up potential agreement proce-dures. It should be noted that most of the assistance distrib-uted to governments through the IMF is channelled through the so called Stand-by Arrangement (SBA). The SBA is designed

This article is based on extracts from ISI Emerging Markets IntelliNews publications: Bulgaria This Week and Bulgaria Country Report. For more detailed information please contact ISI Emerging Markets office in Sofia at +359 2 8160404 or info_bg@securities.com

Next Government to Tackle Severe Economic and External Stability IssuesThe economic downturn finally hits home

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to help countries address short-term balance of payments problems and may be provided on a precautionary basis—where countries choose not to draw upon approved amounts but retain the option to do so if conditions deteriorate—both within the normal access limits and in cases of exceptional access.

World Bank warns about rising external balance risks

In contrast with the government’s view concerning the external balance, the World Bank warned in its Global Finance Report 2009 about potential problems along several lines. Bulgaria is among the countries with the highest private capital flow dependency ratio in excess of 20% of GDP, increasing the vulnerability to sudden withdrawals. Following Belarus and Russia, the country has the third highest level of short-term debt to reserves ratio in Europe and Central Asia. As of the end of February, Bulgaria held insufficient reserves to cover debt coming due in 2009. In addition, real exports have shrunk 6% y/y as early as the last quarter of 2008 as a result of contracting demand in the main trading partners, the World Bank estimates. Remittances from emigrant workers amounted to as much as 5% of GDP in 2007 and these flows will also be impacted adversely as labour markets in Europe are severely hit by the recession. The country’s external financing need has been estimated as heavy as 65% of GDP this year.

Despite fiscal buffers, public finances are also exposed to risk

Finance Minister Plamen Oresharski just recently warned that a potential arrangement with the IMF would impose a severe restriction on public spending, rendering such an agreement ultimately unjustifiable. In his view, the prudent fiscal policy stance of the government applied so far should be maintained, instead of relying on external support. These statements should be judged, however, against further complicating cir-cumstances of changing governments. Earlier in June, Oresharski projected that the consolidated budget will post a small surplus in H1. The budget surplus reached BGN 675.5mn (EUR 345.4mn) in Jan-April, down by 75% y/y and 0.9% of the projected full-year GDP as compared to 4.1% of GDP one year earlier as budget revenues decline, while public expenditures growth continues to accelerate each month since the begin-ning of the year. The ministry revised the budget surplus target for this year from the set in the budget law 3% of GDP to 1% of GDP due to the impact of the world financial crisis on the local economy. However, in order to maintain its stable fiscal position and meet its fiscal targets in the face of quickening deterioration of budget revenues, the government would have to make much larger adjustments in its spending accounts.

A number of countries have already signed agreements for financial assistance from the multilateral institution, among which Hungary and Latvia, which requested the assistance last year. Bulgaria and Croatia will probably seek bailout loans from the International Monetary Fund as they struggle to contain current account deficits and repay foreign debt, analysts Timothy Ash (Royal Bank of Scotland) and Peter Brezinschek (Chief Economist from Raiffeisen Centrobank) have com-

mented for Bloomberg most recently. Minister Oresharski admitted that he had met IMF officials, but talks have been general and no concrete plans have been discussed. Clearly, the new government to step up after the general elections vote on July 5 will be responsible for making the decision. Fortunately, while opinions regarding the benefits and costs of signing a Standby Arrangement with the IMF are not unequivo-cal, support for the currency board arrangement seems uni-formly strong among political parties and local economists. n

Countries receiving IMF assistance

Date CountryAmount

(USD bn)Type of

Arrangement

5-Nov-08 Ukraine 16.5 SBA

6-Nov-08 Hungary 16.2 SBA

19-Nov-08 Iceland 2.1 SBA

23-Dec-08 Latvia 1.8 SBA

16-Jan-09 Serbia 2.9 SBA

4-May-09 Romania 17.1 SBA

5-May-09Bosnia and

Herzegovina1.5 SBA

6-May-09 Poland 20.6Flexible

Credit Line

Total 78 .7

Source: IMF

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The American Chamber of Commerce in Bulgaria organized a conference entitled “Efficiency and Accountability of the Commercial Register in Bulgaria” on June 18th, 2009 in Sofia. The event is part of the project of AmCham on improv-ing commercial registration, funded by Fund Bulgaria, Balkan Trust for Democracy. The conference was the first public forum with broad participation aiming to discuss the effective-ness and efficiency of the commercial registration since its launch in 2007. After the initial hiccups and needed time for operational and client adjustments, significant experience had been gained to allow in-depth analysis, issue identifica-tion and recommendations for further improvements.

In an effort to ensure that project activities include a broad spectrum of stakeholders, AmCham attracted as partners the biggest Bulgarian business associations in terms of member-ship and impact: the Bulgarian Chamber of Commerce and Industry, the Bulgarian Industrial Association and the Confederation of Employers and Industrialists in Bulgaria, each of them bringing to the table specific issues and con-

tributing to the outreach.

The conference brought together a large scope of busi-nesses: corporate companies, small and medium enterprises, lawyers, consultancy firms, financing institutions and public administration representatives – the Registry Agency manage-ment, Ministry of Justice officials, representatives of other relevant state administration bodies. The discussion was based on two project deliverables: a business survey to mea-sure client satisfaction with the services of the Commercial Register and identify needs for improvement, and an indepen-dent legal analysis of the policies and practices of commer-cial registration. An additional aspect of the discussion – placing Bulgarian experience in an international context and measuring it up with highest international standards and trends - was added by the World Bank expert representa-tive.

The business community agreed on a number of identified challenges before commercial registration efficiency, such as

Forum Seeks to Add to the Efficiency of the Commercial Registration

The forum provoked the interest of more than 100 companies which took part in the seminar.

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developing a Q&A section at the Registry Agency website to cover most common mistakes and concerns; to introduce a 15-day period for completion of incomplete applications; to put an end of the practice of issuing paper current status statements since the information is available online; to abol-ish the requirement of notarized certification in the registra-tion application; to decrease the initial capital requirements, to name a few.

According to the survey of Market Links, among main con-cerns of the businesses is the easy access to personal data of owners and managers of the companies in the Register which may lead to forgery and frauds on a large scale. 115 firms participated in the survey that was conveyed in April this year. The company representatives insisted on personal-ized access to this data.

In order to avoid forgery the company information shall be presented in a way that the personal data of managers is accessed only by the Registry Agency.

The firms also raised their concerns with the high rate of registration denials in case of incomplete documentation, since the current system does not allow for corrections or follow up completion. In that case the companies have to submit documents again and to pay the fee twice. The firms shared with the audience that the instructions of agency are not clear enough. Since the Register was launched in 2008 until June 10 this year, 450 000 registration forms were sub-mitted with 10% of them refuted for lapses in the documenta-tion. The attorney Vladimir Penkov recommended that there is an option to remove the irregularities without the necessity to start the whole procedure over again. One of the main problems in the register is the company’s trade mark protec-tion, and in Mr. Penkov’s words even though a certain trade-mark has been registered within the Patent Office, there is no problem for another company to register a firm under the same name.

Tsvetan Simeonov with BTPP advised the employees of the agency to check the address registration of the companies because very often it is not real at all. According to Daniela Miteva, Director of the Registry Agency the problem is within the address registration system in general, not within the rights&duties of the Commercial Register. In most cases the company registration is made for one day, very rarely it takes 2 days, Miteva explained.

In comparison, the commercial registration in Canada takes 1 hour and 25 minutes, said Simeon Diankov, financial expert. He suggested that the notarized certification is excluded from the mandatory documentation, and that it should be made by the Registry Agency employees. In the opinion of other attorneys at the forum the task should be shared between the Agency and the notaries as the Agency does not have offices throughout the country.

The conference final resolution declares the commitment of AmCham and its partners to develop proposals for legislative amendments regarding commercial registration, which will be consulted with the Registry Agency and submitted to the new government and Parliament after its inauguration. n

The commercial registration in Canada takes 1 hour and 25 minutes, Simeon Diankov, financial expert said.

From left: Denny Robertson, USAID Development Counselor, Daniela Miteva, Director of the Registry Agency and Valentin Georgiev, AmCham Executive Director

Boryana Teofanova, expert with the Registry Agency explained how the online registration works. On the left side: Natalia Sabeva, Chief of Legal Dept. at Bulgarian Industrial Association.

One of the main problems in the register is the company’s trade mark protection, said Vladimir Penkov (on the right).

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How to persuade customers to switch to environmentally friendly products which are more expensive, especially in times of crisis? That turned out to be the focal point of the AmCham CSR June Committee meeting and some 20 representatives of businesses elaborated on the issue. Green procurement, the European Ecolabel scheme, case study presentation of Mercurius-Sofia and a presentation by Ceder Foundation on orphanage houses for children with disabilities were the vari-ous topics that prompted a discussion during the June meeting of the committee.

Milen Georgiev with Mercurius Sofia presented a study on environmentally preferable products. Bulgarian offices use about 12,000 tons of cut size paper each year. The pro-duction of this volume requires approximately 50,000 large trees only for Bulgaria, which is a smaller country. He explained that the environmentally preferable products are more expensive than regular ones as they require more

processing, and the company finds some difficulties in persuading customers in Bulgaria to buy them. The com-pany seeks to develop or source new products that incor-porate other environmental attributes beyond recycled content, including products using eco–friendly or recycled raw materials.

Ward Miller with denkstatt Bulgaria elaborated on the origins of green procurement and lifecycle costing - a methodology comparing the net present value of products based on both initial and future costs by accounting for factors like energy use during operation, maintenance, and disposal.

Nadejda Hristova, senior expert in Industrial Pollution. Prevention, Ministry of Environment and Waters, talked about the use of the European ecolabel in green public procurement approaches. The EU ecolabel is an official label managed by the European Commission which certifies that a product or service is of good environmental quality and guaranteed technical performance. An eco-labelled product generates less environmental impacts on air, water, soil and human health throughout its life cycle, from raw material extraction to end of life (“from cradle to grave”).

Cedar Foundation Executive Director Mark O’Sullivan present-ed the charity activities and projects of Cedar throughout Bulgaria. Cedar facilitates positive social change in Bulgaria by assisting in the provision of quality, community-based care for disadvantaged children and young persons.

The organization was founded in Kazanlak, Bulgaria in 2005 and it is a registered Bulgarian charity and licensed social service provider. The head office is now in Sofia, but the com-pany has full-time personnel located in Kazanlak and Kyustendil. n

How to Make Businesses Invest in Environmental Products

AmCham member companies, among them Deloitte, participated in the meeting.

Nadejda Hristova, Senior Expert in Industrial Pollution Prevention, ministry of environment and waters Milen Georgiev with Mercurius Sofia

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AmCham Vice-President Tanya Kosseva-Boshova, Thomas Higgins, AmCham Board Member, Valentin Georgiev, Executive Director and AmCham Government Affairs Director Sevdalina Voynova had business breakfast on June 23 with this year’s American Marshall Memorial Fellows: Paul Schultze, Government Affairs director of Hunt Consolidated, Inc., Dallas; Dena Montague, PhD candidate, University of California, Los Angelis; Chandak Ghosh, medical consultant for Federal Policy U.S. Department of Health and Human Services, New York; Staci W. Lynch, director of External Affairs, the Ron Clark Academy, Atlanta; and Jennifer Algire, executive director, Community Health Services of Macklenburg County, North Carolina.

The Marshal Memorial Fellowship Program of the German Marshal Fund

aims to acquaint the new generation of American leaders with the European realities, transatlantic partnership and global challenges facing both sides of the Atlantic Ocean.

AmCham representatives discussed with

the American fellows current business and economic challenges and trends, capital market and investment climate, as well as specific business areas like energy secu-rity and renewable energy sources, corpo-rate success stories, anti-corruption efforts, services to members. n

AmCham Meets with American Marshall Memorial Fellows

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The eighth AmCham Tennis Tournament brought together AmCham members and journalists with Tennis Club Journalist and Capital weekly on June 13-14. Forty one players with 13 com-panies took part in this year’s games hosted by Gloria Palace Club.

Orkikem and Gloria Palace Club play-ers became the team finalists, with Orkikem team (Georgi Ginev, Ivan Zapryanov, Elena Yolovska, and Plamen Dimitrov) coming on top in a head-to-head battle. Gloria Palace team placed second (Niki Bojinov, Stoyan Batov, Petko Malinkov).

At the first semifinals the Gloria Palace team played with another proven tennis players of Landmark Property Bulgaria, represented by Peter Kunzov and Peter Georgiev. At the second semifinals Pain

Businessmen and Journalists Compete in the AmCham Tennis TournamentOrkikem Team Wins the Contest

Niki Bojinov with Gloria Palace Club takes the cup for the second place.

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D'or team, represented by Tzvetan Traykov, Zhivko Kolev, Miroslav Petrov, played against Orkikem team.

The keen tennis players Irina Tzoneva with Bulgarian National TV, Eleonora Tarandova, Capital weekly, and Desislava Kulelieva with 24 Hours daily showed their best at the tennis courts as well.

Valentin Georgiev, executive director AmCham Bulgaria, together with Moni Monov, chief referee at the tournament, awarded the players.

AmCham is grateful to all sponsors and supporters who made the contest pos-sible: Bulgarian VIP Travel, Gloria Palace Club, Bankya, Pain d’Or, and Dunlop Sport & Sport Shops Chain SLS. Awards were provided by: Allied Pickfords Bulgaria, Radisson SAS Grand Hotel, Sport Shops Chain SLS.

The chamber appreciates the keen enthusiasm of all playing companies:

Adecco Bulgaria, Bulgarian Land Development, Bulgarian VIP TravelEricsson Telecommunications, Gloria Palace, Johnson Controls Electronics Landmark Property Bulgaria, Orkikem OOD, Pain d'Or, Schenker EOODSofiaconsultance EOOD. n

Journalists did their best at the courts: Tihomir Tinchev with Tennis Club Journalist and Desi Kulelieva with 24 Chasa

Schenker team played versus Landmark Property Bulgaria team.

Georgi Ginev of Orkikem pours the champagne in the cup given out to the Orkikem team for the first place.

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Tanya Kosseva-Boshova with Landmark

Property Bulgaria and Stefan Ivanov with

Citibank Sofia Branch were re-elected

unanimously to the AmCham Board of

Directors at the chamber’s General

Assembly meeting held June 24 at the

Grand Hotel Sofia.

Boshova, who acted as chamber’s vice-

president, has entered her third term at

the board, while Ivanov has begun his

second term. Currently Boshova is a

partner and executive director of

Landmark Property Bulgaria. Landmark

is one of the largest property investment

and management companies in Bulgaria

with assets under management of more

than 200 million Euro and GLA of more

than 110,000 m2.

In her presentation to the gathering she

pointed out that her personal interest in

seeking a third term as a member of

the board is to help AmCham increase

its impact in critical areas by promoting

US-Bulgarian relations, and providing for

transparent and ethical business envi-

ronment, as well as making Bulgaria an

attractive investment destination.

Stefan Ivanov is the Citi country officer for

Bulgaria. He joined Citibank in 1998 as a

Global Emerging Markets management

associate. Since February 2007, he is at

the head of the Citi’s operations in

Bulgaria. Stefan Ivanov elaborated on the

importance of encouraging and facilitating

the inflow of FDI in Bulgaria which is in

line with the mission statement of

AmCham, as well as generating ideas and

mustering government support for further

enhancements to the local regulatory and

business framework in Bulgaria.

The Assembly examined and approved

the financial statements of the audit for

2008 that was presented by Rossen

Plevneliev, AmCham Treasurer.

The General Assembly bid farewell to

U.S. Deputy Chief of Mission, Alexander

Karagiannis, and to Counselor for Press

and Culture Katherine Ingmanson, who

are leaving the country as their terms

have ended. Karagiannis and his wife

Ingmanson were honored by Anthony

Hassiotis, AmCham president, and

Valentin Georgiev, executive director. A

wonderful oil on canvas of Bulgarian

traditional houses was given to

Karagiannis, and Ingmanson received a

picturesque bouquet. n

Tanya Kosseva-Boshova, Stefan Ivanov Re-Elected to AmCham Board

Tanya Kosseva-Boshova, Landmark Property Bulgaria

Kenneth Lefkowitz , NECA, Olga Borissova, Ellief Center, meet with Alexander Karagiannis.

Stefan Ivanov, Citibank Sofia branch

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Alexander Karagiannis and his wife Katherine Ingmanson were honored by Anthony Hassiotis, AmCham President.

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AmCham Bulgaria leadership had series of meetings with major

political parties to discuss AmCham's White Paper: NMSS Council

on Economics and Finance in May, with the economic team of the

Blue Coalition (UDF and DSB), and with the economic team of

GERB, held in June.

On June 10th AmCham Vice-President Stefan Ivanov, Georgi

Georgiev, AmCham board member, Valentin Georgiev, executive

director, and AmCham Government Affairs Director Sevdalina

Voynova met with representatives of the economic team of the Blue

Coalition (UDF and DSB) to discuss AmCham's White Paper. The

Blue Coalition was represented by Dimitar Bachvarov, chair of DSB

economy and finance committee, and Valentin Stoyanov, member

of the oversight committee of UDF. AmCham and the Blue Coalition

found out many common principles, including sustaining economic

stability through maintaining the currency board at the current EUR-

BGN rate. Both sides expressed also many shared approaches and

measures such as implementing diversified mechanisms for gener-

ating fiscal surpluses, strengthening the government institutional

support for foreign direct investments, simplifying the regimes for

starting business by reducing the bureaucratic procedures and

implementing comprehensive but easy-to-follow regulations which

will not allow subjective or contradictory interpretation by the admin-

istration, reform in the public procurement system and promoting

transparency to all government contracts and agreements, increased

investments and government expenditure in infrastructure projects,

better utilization of EU funds, reform in the educational system.

On June 17th AmCham President Anthony Hassiotis, AmCham

board members Georgi Georgiev, Thomas Higgins, David Butts,

Zachary Hampson, Valentin Georgiev, executive director, and

AmCham Government Affairs Director Sevdalina Voynova met with

representatives of the economic team of GERB to discuss the

White Paper. GERB was represented by Rosen Plevneliev and Biser

Boev.

AmCham and GERB discussed measures for sustainable economic

stability, the major one being maintaining the currency board at the

current EUR-BGN rate and developing a stand-by agreement with IMF.

GERB is committed to reach an agreement with IMF, but only after a

thorough revision of the state budget. GERB presented the main

economic measures in their platform: to diminish the share of gray

economy by connecting electronically the customs and the National

Revenue Agency, to introduce a shorter VAT return period with recip-

rocal obligations for the businesses and the state, to optimize public

administration, to ensure efficiency in EU funds utilization by new

systems of project development, management and oversight, to unite

all companies with state participation in a holding company to ensure

their effective management.AmCham representatives pointed out that

the economic teams of political parties need to look not only inward

but also to communicate Bulgaria’s standing and competitive advan-

tages with the outside world. AmCham also expressed the hope that

the new government will be formed promptly to minimize the period

of lack of efficient decision-making.

GERB invited AmCham to prepare a short-list of most urgent legis-

lative amendments to be re-visited immediately after the elections.

AmCham will continue similar discussions with the other major

political forces to ensure the voice of our members is heard in

developing economic policies. n

N-Vision Energy is a fully integrated developer of renewable energy projects. The company is the part of a German family business with operations across Europe. N-Vision Energy has been devel-oping renewable energy projects in Bulgaria since 2007. The family business has one of the longest standing records of achievement in the European wind and renewable energy sector. Since early the 1990s more than 1000 MW of capacity were realized across Europe. With the experience and capabilities derived from its two decades in the industry, the com-pany develops projects from Greenfield through to turnkey delivery to investors. In addition, the company takes on select pre-developed projects of third parties. Most recently, N-Vision Energy’s development of two large, 100+ MW, wind energy projects in the regions of Karnobat and Kyustendil has been publicized. N-Vision Energy is based in Sofia with further locations of the

family business in Athens, Berlin and Düsseldorf.

Contacts: Mr. Sebastian Noethlichs

Managing Director Web: http://www.n-vision.biz

Tel: +359 2 959 0426 E-mail: mail@n-vision.biz

Address: 16, Boyanska Legenda Str. 1616 Sofia

As a global specialist in energy manage-ment with operations in more than 100 countries, Schneider Electric offers integrated solutions across multiple mar-ket segments, including leadership posi-tions in energy and infrastructure, indus-trial processes, building automation, and data centres/networks, as well as a broad presence in residential applica-tions. Focused on making energy safe,

reliable and efficient, the company’s 114,000 employees achieved sales of more than 18.3 billion euros in 2008. In the last year the company has migrated all of it’s very popular historical brands such as Merlin Gerin, Telemecanique, Square D etc. to one common brand – Schneider Electric.

The representative office of Schneider Electric Bulgaria was established in 1998 and commercial entity registered in 1990. In 2007 the company inaugurated a new factory for MCB’s in Plovdiv and was awarded Investor of Year 2007 in Electrical Equipment Industry. Schneider Electric Bulgaria is both ISO 9001:2008 and ISO 14001 certified.

Contacts: Andrew Sloan

Managing Director Tel.: +359 2 932 9320

Web: http://www.schneider-electric.bg Address: Business Park Sofia, Bldg. 10,

Fl. 1 1766 Sofia

ENERGY

Е Н - В И Ж Ъ Н Е Н Е Р Д Ж И Е О О Д

AmCham White Paper Discussed at Meetings with Political Parties

n e w m e m b e r s

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Ivailo Kalfin, Deputy Prime Minister and Minister of Foreign Affairs of the Republic of Bulgaria was an official guest of the golf event in June and took his first golf lesson along with the CEO of ADIS Real Estate Assen Makedonov, CIPS, TRC, CLHMS.

The winners in the tournament were:

A Division– Atanas Genov wit 67 points and B Division – Iordan Iordanov with 46 points.

The second place in A Division was won by Teodor Todorov with 70 points and third with 72 points was Jivko Tenev. Trophies for the second and third places in B Division won Milen Iankov with 43 points and Lubomir Kostov with 41 points.

The format of A Division for golfers with 0-12 handicap was Medal and for B Division for players with 13-28/36 handicap was Stableford. Mr. Makedonov handed the official tro-phies and certificates of excellence to the winners in each division. Special recognition received H.E.Mr. Tsuneharu Takeda, Ambassador of Japan and

H.E. Mr. Immanuel Robert Inkiriwang, Ambassador of Indonesia for their out-standing performance in the golf tour-nament.

The first places in the two divisions received Annual Gold Family Membership Card for Boyana Diplomatic Club & Spa, property of ADIS Real Estate. The award for the second places was Annual White Family Membership Card for Boyana Diplomatic Club & Spa.

Winners of the third place were given the opportunity to spend a relaxing all inclusive weekend at ADIS Holiday Inn, Golden Stands Resort. n

Financial Markets Department, ING Bank Sofia Branch, achieved its best results ever in 2008 and thus had a crucial influence over excellent financial results of the branch.

Now, just having passed through the first half of 2009, Emil Asparouhov, director Financial Markets, ING Bank Sofia Branch, says: “We have been always focusing on the fact that our main goal is to maintain sustainability in our revenues – despite their volatile nature. A month of record high results might be impressive, but more impressive is when you keep on doing it for a quarter, much more – for 6 months and really outstanding if you succeed in doing it throughout the whole year.

Well, we did it for a year but our ambitious goal is to make it for quite longer. ING Bank Sofia Branch Financial Markets 2009-H1 figures are as follows: Total H1 income from Financial Markets activities amounted to new record highs of EUR 6.3 million – this compared with previous record high of EUR 4.65 million in H1-2008 and EUR 1.65 million in H1-2007. The con-

tribution of Financial Markets to overall branch income is more than two thirds – compared with 52% and 10% in H1-2008 and H1-2007 respectively’. n

ING Bank Sofia Branch Expects High H1 2009 Results

Emil Asparouhov, CMT member, head of Financial Markets, ING Bank Sofia Branch

ADIS’ Golf Cup 2009 Results

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Microsoft Bulgaria launched a business-oriented web-based

platform that offers an effective response to the current eco-

nomic situation by optimizing production costs, administrative

expenses and personnel productivity. This initiative is part of

an informational campaign that raises awareness of versatile

IT solutions that create added value for virtually any type of

business. The platform reviews time-tested cost-saving alter-

natives ranging from VoIP telephony, through Business

Intelligence products, to server consolidation to make the

most of available IT infrastructure in the company. As part of

the campaign, experienced experts from Microsoft Bulgaria

will be available for personal consultations and diagnostics of

individual business needs. To find out more, please, call 0800

1 5555. n

After 16 years in Telekom Austria Group

and four years at the helm of Mobiltel,

the current CEO of the biggest Bulgarian

operator Josef Vinatzer decided to con-

tinue his professional career back in

Austria.

Under the management of Vinatzer,

Mobiltel started the first working UMTS

network in Bulgaria and thanks to it the

company became the fifth operator in

the world to offer HSDPA services; M-Tel

signed a partnership agreement with

Vodafone and this allowed its clients to

use one of the most innovative products

and services of the world giant such as

BlackBerry, mobile phones at preferential

prices, live TV on your mobile phone

through the multimedia platform Vodafone

Live! and attracted more than 5 million

customers. During his management

Mobiltel started LOOP – the youngest

mobile network in the whole country,

implemented the SMS car parking and

made a step on the fixed market through

the unique home and the office products

M-Tel HomeBox, M-Tel OfficeBox and

M-Tel VoiceBox. The company positioned

itself on the television market too through

QUARTO – the first service in Bulgaria

that offers high-quality digital television.

Thanks to Joseph Vinatzer, Mobiltel fol-

lowed extremely active policy in the

sphere of the corporate social responsi-

bility. This was recognized also by the

Presidency of the Republic of Bulgaria

and Vinatzer was given the Honorary

Mark of the President of Republic of

Bulgaria. The award is given for excep-

tional merits in the area of the corporate

social responsibility and for supporting of

culture and sports.

‘During Josef Vinatzer leading Mobiltel

had excellent performance. The compa-

ny maintained a stable position as the

market leader and a role model among

the business players in Bulgaria. The list

of company achievements is really long

and I would like to extend our gratitude

to Sepp not just for his excellent leader-

ship and the results of his team, but also

admiration to an individual who spent a

significant part of his life as an expert

working in Bulgaria’, said Hannes

Ametsreiter, CEO and chairman of the

Board of Telekom Austria Group and

Chief Executive Officer of Mobilkom

Austria AG

Since July 1, the supervisory board of

Mobiltel nominated Andreas Maierhofer

for the new CEO of M-Tel. He will con-

tinue to be in charge of the company’s

marketing, sales and services as well.

Andreas Maierhofer started working in

the sphere of the mobile communications

since the very establishment of the busi-

ness 13 years ago. He has worked in

different countries and on different mar-

kets – big and highly competitive, small

and monopolistic, developed and devel-

oping, in Western and in Eastern

Europe.

Andreas Maierhofer was born in Austria

in 1967. During his legal studies in

Vienna, he started his career at Telekom

Austria AG where he worked mainly in

the start- up project for Mobilkom

Austria. He graduated from Management

School of St.Gallen for Executives.

Since 1999 he was responsible as a

director for the Customer Service

Division at mobilkom Austria. In June

2004 Andreas joined the Si.mobil man-

agement board as a COO responsible

for the market area and in August 2006

he became CEO. Under his leadership,

Si.mobil`s net income was positive for

the first time and the company’s results

were showing significant growth. In May

2007 Andreas left for Mobiltel, Bulgaria,

to become a CMO.

The initial priorities of the new CEO will

be the activities bound to innovative

products and services, the social projects

and the loyal customers’ programs. ‘We

shall be active and for sure we shall fight

to keep showing further growth with full

focus on the customers. I promise to all

customers that together we shall witness

interesting innovations – by increasing the

quality of our products and services’,

explained Maierhofer his plans for the

future. n

Andreas Maierhofer Takes on as CEO of Mobiltel

Added Value for Your Business Through Cost Optimization by Microsoft Bulgaria

44

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The first of July concert of the band Sunrize and All Access project with special guest Ken Hensley from Uriah Heep was an official promotion of the maxi single “SUNRIZE on a July morning, feat. KEN HENSLEY and JOHN LAWTON” as well as the first July Morning concert ever happening in Sofia (the concert took place at Sofia Live club).

The conferencier - the actor Niki Sotirov announced also the video of the song July Morning, which was released for the first time to the public and introduced to the media Ken Hensley from Uriah Heep and George Marholev from Sunrize. Before the beginning of the concert journalists and fans had the opportunity to enter into non - formal discussion and to take autographs from the rock legend and the famous Bulgarian singer and blues and rock guitar player.

With the creation of a Bulgarian version of the cult song July Morning and the tradition for celebrating the 1st of July, George Marholev and Sunrize have started a campaign for establishing the first day of July as an official holiday of the free spirit in Bulgaria. The idea was given an entire support by the author of the song – Ken Hensley.

As George Marholev put it, the Bulgarians meet the first sun rays of the 1st of July ever since 70s, being a long period to become a tradition not observed anywhere else in the world. That is why, he as a singer and guitar player of Sunrize, as well as a producer of the song in its Bulgarian version and most of all as a Bulgarian himself, calls upon all Bulgarians with free spirit to support this initiative.

The ambition of Sunrize is the campaign July Morning to hap-pen all year round. As part of it, concerts have been played in Varna and Burgas and are planned to take place in Sozopol ,Belogradchik,Plovdiv,Stara Zagora! George Marholev with the vocalist Marieta Yaneva and Pavleta Semova of All Access Project will play and sing in the new album of Ken Hensley in his studio in Alicante,where the Sunrize’s new to come double album S.O.S. will be mixed and mastered.

The record of the song – July Morning symbolizes succession and tradition of the global message of the rock music. For Sunrize itself it is a dream come true – not only making con-certs with famous rock glories but also building a monument in the history of rock music, raised in Bulgaria.

The version of July Morning,recorded and produced in Bulgaria would be the first ever studio recording of John Lawton of this song! Interesting is the fact that Ken Hensley also sings in the recording-the second and third verse are sang by George Marholev and Yassen Dimitrov!

On the event of the concert Ken Hensley commented: “The concert in Sofia gave me a lot of positive energy. An unforget-

table experience happened here not only for the Bulgarian public, but also for me and in fact it happens always at the concers with Sunrize. I want to share with you one thing, which is that I’ve had a lot of concert all over the world, but, believe me here in Bulgaria the feeling is really different. Here the contacts with the public fills me up in a very specific way and make me feel the people. We have lived a sensation which we can never live over again and which sensation I will take with me ever after. That is why I am extremely grateful to my broth-ers from Sunrize, who offered their friendship, support and professionalism. Without them this could never happen.”

In the maxi single “SUNRIZE..on a July Morning, feat. KEN HENSLEY and JOHN LAWTON is also included the pilot origi-nal “ Bang Bang-No More Tears” and 3 video lives of SUNRIZE and All Access Project and the video of the song All The love from the previous successful album of the band!

At the moment Sunrize works over its double album, named S.O.S.(Sound of Sunrize) which will be at the market this autumn. It will consist of 11 author versions and 10 cover ver-sions of world rock classics such as Hey Joe (Jimmy Hendrix) , Perfect Strangers and Highway Star (Deep Purple), Come Together and With A Little Help From My Friends (The Beatles), July Morning, Stealing, Sunrize (the song after which the band SUNRIZE is named) (Uriah Heep), Supersticious (Stevie Wonder), Feels Like Making Love (Paul Rodgers), Play The Funky Music (Wild Cherry). Besides the cover versions and the author songs, mentioned in the maxi single SUNRIZE...on a July Mornning, S.O.S. will consist of the author songs Sure Got The Blues (lyrics from Phil Jackson – lyric writer of Massive Attack), Boogie Man (a song written after the American film with the same name), Summer In New York (dedicated to 11.09.2001 г.). As a bonus are foreseen the cov-ers of the songs Just A Giggolo, Georgia On My Mind, Route 66, which Sunrize recorded with the Big Bend of the Bulgarian National Radio with a conductor Janko Miladinov. n

www.sunrizemusic.com

Sunrize and All Access Project with a special guest Ken Hensley of Uriah Heep Shake Sofia with a Concert

July Morning in Sofia

From left: George Marholev, Ken Hensley and John Lawton