Financial news

Bulgaria recorded a budget surplus of BGN 369.6 million on a consolidated basis for April, said the Ministry of Finance (MoF). However, deficits run up in the first quarter take the shortfall for January to April to BGN 1.29 billion. In April, revenue stood at BGN 7.49 billion, or 28.2% of the annual target. Expenditure totaled BGN 8.79 billion, representing 32.6% of the target. The fiscal reserve was BGN 6.67 billion at the end of April, according to MoF data. The surplus resulted mainly from the transfer into the budget made by the Bulgarian National Bank (BNB) each April. This year, the central bank transferred BGN 354.71 million into the budget, which accounts for 75% of the amount by which revenue outstripped expenditure last year.

Bulgaria’s unemployment rate dropped down to 9.53% in May 2010, according to data made public by Labor Minister Totyu Mladenov. According to official government statistics, after hitting a peak of 10.3% in February, the highest value since the beginning of the economic crisis at the end of 2008, the number of unemployed in Bulgaria has keep declining slightly over the last three months. “The results of a study carried out recently by the State Employment Agency show that the crisis is disappearing. The study shows that 53% of the employers in Bulgaria are planning to hire between 1 and 6 new workers over the next year,” Mladenov declared.

	Mineral Fuels, Tailoring Products, Canning, Perfumery and Cosmetics, Furniture, Meat Products, Wine, Wood-processing Industry

Companies

About 300,000 companies will have to undergo administrative liquidation, after 1 January 2011. This is when the three year period provided by the Trade Register Act for compulsory re-registration of all companies in Bulgaria expires. This was the prediction of Vladimir Penkov, lawyer and Managing Partner with Penkov, Markov & Partners company voiced at the discussions on the proposals for amendments to the Trade Register Act. He noted that currently there are 1.2 to 1.4 mln companies in the country. Over the past two and a half years, a total of 250,000 of them have re-registered. Sole proprietors, who have not complied with the procedure are about 500,000-600,000, but according to the law they would be closed down very quickly. Thus, if about 50,000 more companies conform with the law term, the threat of liquidation would remain for some 300,000 enterprises," Penkov explained.

The Electricity System Operator (ESO) posted BGN 42.7 mln in losses for 2009, company’s Executive Director, Ivan Yotov, said yesterday. He added that the operator was by BGN 5.9 mln in the red for the first four months of 2010. If the State Energy and Water Regulatory Commission (SEWRC) approves the proposal for new electricity prices, ESO would accrue another BGN 37.5 mln in losses from its operations. According to Yotov, the operator would not be able to guarantee the security of the power grid in that situation. It has already accumulated liabilities to the Bobov Dol and the Varna thermal power plants.

Swedish furniture maker IKEA will break ground on June 3 on its flagship Bulgarian outlet, which will be located in the capital city of Sofia. The chain, which is the world’s largest home furnishing retailer spanning 37 countries, plans to build its second Bulgarian store in the coastal city of Varna, said Greek company Fourlis SA, which holds the franchise license in Greece, Cyprus and Bulgaria. IKEA had been rumoured to be eyeing the Bulgarian market for four or five years. Fourlis purchased a site on Sofia’s ring road back in 2008. The new IKEA store in Sofia will be sprawled on 30,000 sq m and will have a 1,200-car parking lot. It should open doors in the second half of 2011. The store will stomach EUR 50 million.

Despite the prosecutorial examination was not finished, Holding Varna, which is part of the TIM group, received five permits by the Municipality of Varna to build in the Sea Garden. Doubts arose immediately on the legality of the actions of the mayor Kiril Yordanov and the chief architect of the city Peter Yordanov, who gave the permits. The chief architect explained that the granting of construction permits for a hotel, spa center and three other buildings was coordinated with the Ministry of Regional Development and Public Works (MRDPW). However, they said from the MRDPW that they had allowed only works with which the shore to be strengthened. It was declared by the Ministry that the prohibition in 1997 for construction of buildings in this region remains.

Crisis hit the powerful tailoring company Neoknit in Blagoevgrad, after 11 years of successful business the owners dismissed the 400 seamstresses for one month downtime. The reasons are financial and stem from the economic turmoil in Europe, but the manager Christos Leopulos paid all due wages to the whole staff are all insurances. Within one month the owners of the company, which is based in England, are to decide the fate of the factory in Blagoevgrad. The financial punch for Neoknit comes only a year and a half after the company built its own modern factory in Blagoevgrad, took a EUR 2.5 million loan, and equipped the plant with modern machines.

Timber company Kronospan in Veliko Tarnovo resumed operations yesterday. The regional eco watchdog announced that it will make frequent checks of the company and the necessary measurements of the air in the region and in case of odors from the operations it would impose sanctions. False signal were received at the ecological watchdog for gassing on Thursday last week. Residents of the residential district heated the green phone complaining about odors. After inspections no irregularities were established. The next day the ecologists visited the company but found that it really does not operate.

Europe

The Swiss government failed to act swiftly to prevent a credit and tax crisis that had endangered banking giant UBS AG in 2008-2009 and could have sunk the Swiss economy. The 360-page report, the result of a 15 month inquiry by two parliamentary committees and 59 closed-door hearings with senior Swiss officials, showed the government waited for five months before decisively stepping in to tackle UBS's credit woes in September 2008. The report said Berne also relied too heavily on information coming from the financial industry and failed to scrutinise itself or recognise the implications of a U.S. tax probe into UBS -- the world's second biggest wealth manager by assets -- that eventually pierced a hole in Switzerland's treasured banking secrecy laws.

America

Canada became the first of the G7 major industrialized countries to begin hiking interest rates following the global financial crisis, raising its key rate on Tuesday by a quarter-point to 0.50 percent. The Bank of Canada gave no guarantee it would continue hiking its overnight target rate, which it had kept at an emergency low of 0.25 percent since April 2009, saying the European debt crisis and uneven global recovery clouded its confidence in a sustained recovery. After two quarters of robust economic growth in Canada, the bank said activity was broadly in line with its expectations, as was inflation. The debt crisis in Greece and some other euro zone countries has so far had only a limited impact on Canada through lower commodity prices.

Asia

Honda has offered Chinese workers a 24 per cent pay rise in a bid to end a strike that has crippled its operations across the country, according to a company spokesperson. The offer would raise average monthly salaries at the Japanese carmaker’s transmission plant in Foshan, a factory town in southern Guangdong province, to Rmb1,900 ($280). Workers had been pressing for as much as Rmb2,500. On Tuesday morning, it remained unclear whether enough workers would accept the offer for production to resume. While some boarded buses to report to work, others said the industrial action was continuing. “The strike is still on,” one worker insisted. “There will be more negotiations today.” The strike, which began last week, forced the closure of Honda’s car plants in nearby Guangzhou, the provincial capital, and Wuhan in central China.

Day of Hristo Botev and all who died for Bulgaria’s independence

The day of Botev and all who died for Bulgaria’s liberation was marked for the first time in 1884 in Vratza and Plovdiv. It has been officially celebrated since 1901, when some of Botev compatriots, who survived, witnessed an official ceremony, held on the Vola summit (the place where the famous revolutionary was killed). Such a ceremony is traditionally held every year at that place. Hristo Botev – one of Bulgaria’s greatest revolutionaries and poets, was born on December 25 1847 (January 6, new style) in the town of Kalofer, in the family of the teacher Botyo Petkov and Ivanka Boteva. He studied in Karlovo for some time, and then went back to his hometown, where he continued studying, taught by his father. In 1863, he graduated the school in Kalofer. In October the same year, he went to Russia and became a student in the Second Odessa High School, but was expelled from it in 1865. He was a teacher in a small Besarab village for some time, and in 1867 returned to Kalofer and started preaching against the Turks. Soon afterwards, he left Kalofer for good. In October 1867, he was already living in Romania. In 1872, he was arrested for conspiracy and revolutionary activities and was sent to prison. He was released, following the interceding of Levski and Karavelov. He started working as printer, and later became collaborator and co-editor of the revolutionary magazine, issued by Karavelov. This was the beginning of his active career as a journalist. In May 1876, when the news of the April Uprising came, Botev started organizing his cheta (group). He, together with some of his followers, went on board of the Radetzki ship and on May 17 forced the captain to stop on the Bulgarian shore. On May 20 1876 (June 2) the last and most serious fight took place, in which Botev found his death.

On that day:  Augusta National Archeological Preserved Area Nikolay Gyaurov