FT: BULGARIA LOOKS AT TELECOMS DEAL

Politics | June 20, 2001, Wednesday // 00:00

The economist tipped to be Bulgaria`s finance minister in the new administration led by the former King Simeon II has said the privatisation of Bulgaria`s state telecom company will be a priority. Milen Velchev, who until May was a vice-president for emerging markets at Merrill Lynch in London, said the privatisation of BTC, the state telecom company, was a priority, with the government also intending to grant a new wireless license. He said the new government also planned to deregulate the energy sector, which might involve the renegotiation of recent contracts worth $1.4 Bln with AES and Entergy, the American electricity companies. `However if we think Bulgaria has gone too far and it is not financially advisable to break the contracts, then we will keep them. If the country has made too many commitments we will have to honor them,` he said. National Movement for King Simeon II, which won an overwhelming victory in Sunday`s parliamentary elections, has promised an ambitious program of spending on pensions and education, tax cuts and economic growth. Mr. Velchev said doubts about the viability of the National Movement`s economic program, which also envisages eliminating the budget deficit, were unfounded. `We are relying on filling the gaps with improved collection of taxes. At the moment only a small fraction of customs duties are collected and a lot of VAT escapes,` he said. Mr. Velchev also believes that accelerated growth and increased foreign investment will increase tax revenues.

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