Банкеръ Weekly

Briefs

THE CRUCIAL REPORT

LANDING OF EUROPEAN COMMISSIONERS IN BULGARIA EXPECTED IN OCTOBERThe sacral January 1, 2007 with which Bulgaria's integration into the European Union (EU) is associated will still be mentioned in the monitoring report that Brussels will prepare, the BANKER weekly learned. The document is to be published on October 25 and will clarify (although not finally)the possible delayof the country's membership by 12 months. According to diplomatic sources, the commissioners will probably declare that Bulgaria might join the community in the early 2007 if the government continues the course of the reforms. The European Commission will make its final announcement on whether or not Bulgaria is ready to become the EU's 26th member next spring when it is to write its final monitoring report. This is one of the reasons why Brussels is expected to avoid being too specific about the date, January 1, 2007, in its October analysis.In one of his first appearances to the media as a Minister of Foreign Affairs Ivaylo Kalfin said that the country aims at getting an acknowledgement in the monitoring report that it would be completely ready to join the community in slightly more than one year. However, in the middle of September the Prime Minister Sergey Stanishev admitted in the parliament's lobbies that such an optimistic scenario is not quite probable.In fact, by using its traditional conditional mood (as in its previous regular reports on the progress of Bulgaria), the European Commission (EC) will keep rulers in Sofia under pressure forcing them to fulfil the maximum number ofcommitments taken to the member statesThis approach was initiated by the EC Chairman Jose Barosu who met Bulgaria's President Georgi Parvanov in New York recently. The former Portuguese prime minister then alarmed that Bulgarian rulers should adopt an urgency feeling. The EU Enlargement Commissioner Oli Rehn will probably remind that time for implementing the urgent reforms is running out in early October. He will visit Bulgaria on 13 and 14 October in order to gain the last direct impressions on the country before the monitoring report is published. The visit to Sofia will be Mr. Rehn's second one in 2005. He came to the country in the end of March when in a speech to the National Assembly he appealed to the Bulgarian politicians to immediately start the judicial reform delayed for years. In fact, his new visit is only a part of the real landing of several commissioners next month. Markos Kiprianu, Healthcare and Consumption Commissioner, and Stavros Divas, his colleague in charge of Environment, are expected to come, too. Danuta Hubner, Regional Policy Commissioner, may arrive in Sofia as well.Before that, however, a Bulgarian governmental delegation led by the Minister of European Affairs, Meglena Kouneva, will go to Brussels on September 28. Its members will provide updated information about the voting of the European laws in the National Assembly that will be included in the October 25 report. The chief negotiator with the community already declared that since they were given a delay by the EC (until the first week of October), the MPswill cope in timewith all 22 priority draft laws. Among them are the new controversial Criminal Procedure Code as well as the voluminous draft Law on Veterinary and Medical Activity. But it would be naive to think that even if the Parliament pulls itself together, it will vote a huge number of urgent texts. It is not clear whether the rulers paid attention to what Mr. Barosu told Georgi Parvanov in the USA. The EC Chairman mostly stressed on the practical application of the laws that have been already voted - This is the conclusion from the review of what the country has done so far in five problematic fieldspointed by the EC (Justice and Internal Order, Agriculture, Free Launch of Services, Company Law, Environment). Because of them the Commission blamed the country in early June. It's true that the draft of a new Criminal Procedure Code is being discussed on second reading by the Parliamentary Committee for Legal Affairs, but the political forces have not yet reached an agreement on several controversial issues such as the actual liquidation of the investigation service and the introduction of monitoring prosecutors. Discussing the practical application of the code is absurd, since it will not become valid in the next six months at least. Experts from the Ministry of Agriculture declared they would make up for the delay in the preparation of the Payment Agency and the administration and control system (which allows for monitoring whether or not the estates are sown) by the end of August. The only thing that is certain now is that in the beginning of September the Council of Ministers obliged the Minister of Agriculture Nihat Kabil to provide a report on the implementation of Bulgaria's obligations under the General Agricultural Policy Chapter. The situation is slightly better in the section dedicated to the free launching of services. At the beginning of its mandate, the National Assembly abolished part of the discrimination texts in the Foreigners Act because of which Brussels criticized the country. Currently, the committees in the National Assembly are discussing the amendments to the Gambling Act. The Council of Ministers approved an updated variant of the Insurance Code draft. Still, there are problems with the protection of intellectual property and the waste transportation and they will inevitably be discussed in the Commission's report.It is not difficult to predict that in the section regarding the meeting of the political criteriathe European commissioners will not forget the almost two-month crisis provoked by efforts to form a new government following the parliamentary elections last June. The Brussels experts will definitely pay attention to the bad coordination between the ministries when utilizing the European funds, as well as to the unclear functions of the political cabinets and the paradoxical situations provoked by the lack of buildings for the Commission for Protection of Personal Data and for the National Ombudsman. The texts in the monitoring report dedicated to fighting corruption in the senior administration, education and healthcare sectors are expected with curiosity. The Prime Minister Sergey Stanishev boasted not long ago that the Government prepared a new Behaviour Code for ministers and politically appointed public administration officers. However, that will hardly increase the number of legal cases related to asking or giving bribes. The Prime Minister Stanishev should be aware that the corruption cannot be frightened by strategies or codes copied from those written by the member countries.In the last few years Brussels has not been frugal in flattering Bulgaria when giving assessment of its economic criteria implementation. One advantage for the country this time will bethe respectable growth of GDPby 6.2% in the first half of the year. One could not ignore the deepening negative balance in the foreign trade as well as the balance on the current account of the balance of payments. There have not been great achievements in the privatisation sector, either. In practice, the only company of those planned for privatisation in 2005 that was sold was Bulgarian River Shipping. However, the state still controls Bulgartabac, Bulgaria Air, ADIS, Teraton, Kintex and the Military Machine Building Plants in Sopot. Most of the sociological researches among business representatives keep showing that it is difficult to start a new business in Bulgaria, while taking permission or a licence is still a nightmare for the entrepreneurs.But a country applying for EU membership can hardly fulfil all membership criteria before it actually joins the single market. For example, the ten Central and East European countries that joined the EU in May 2004were criticized until the last minuteby the EC for the weaknesses of their fiscal policy, the restructuring of their economy, the privatisation procedure, the labour market and the healthcare sector. Last spring, among the ten excellent candidates there were countries with a budget deficit of up to 9% of GDP and unemployment of almost 20 per cent. Some of the ten suffered difficulties under the Free Circulation of People Chapter (especially regarding the mutual acknowledgement of professional certificates) - for example, the Czech Republic, Estonia, Lithuania. Others, like Poland, were criticized for the inefficient control over food products sold on the domestic market and the utilisation of the European funds.

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