The EU Council Summit meeting in Brussels Friday agreed on the terms of Bulgaria's contribution to the cost of climate change. In addition, members approved compensation of EUR 300 M for closing Bulgaria's Kozloduy Power Station.

Bulgaria and another nine states from Central and Eastern Europe succeeded in getting an agreement on more beneficial terms with regards to climate change.

That became confirmed by the close of the European Council in Brussels, announced the government press service.

“It was a very difficult meeting. In the morning we had a working meeting with another 9 states and the final decision was to include a text that would guarantee that we won't become donors to countries like China, India, Russia and Brazil, Prime Minister Borisov stated.

“When it comes to paying, it will be synchronized with GDP and with the actual financial situation of the different countries", he added.

The Prime Minister conducted separate talks on the subject with Chancellor Merkel, the President Sarkosy of France, the British Prime Minister Gordon Brown and with the Prime Ministers of Poland and Hungary.

"For almost two hours we held negotiations before the richer countries agreed to our request, so we saved a minimum of BGN 40-50 M due to these meetings", he stated.

A working group has been established, to propose decisions on the topics discussed today. Its suggestions have to approved by consensus. This document is important, according to the government press service, as it enables the EU to be in a unified, strong and leading position in readiness for the Copenhagen meeting on climate change at the beginning of December.

As Prime Minister, Boyko Borisov will represent Bulgaria at this extraordinary meeting, which is likely to be scheduled for November 11 or 12.

The issue of compensation for closing Kozloduy was raised with the European Council by Bulgaria’s Prime Minister Boyko Borisov at the official dinner on Thursday.

Council members declared that they will do everything necessary to give the agreed compensation of EUR 300 M to Bulgaria.

“No-one expressed any doubts as to whether this should happen,” stated premier Borisov to Bulgarian journalists after the European Council meeting ended Friday.

According to him, these additional compensatory payments are requested as a start; later, further funds will be requested, because reactors 3 and 4 can operate for another 20 years.

Recently the European Commission had suggested compensations of EUR 300 M for Kozloduy, but expressly pointed out that the amount needed to be approved by the European Parliament and the Council of EU member-states.

Borisov described the Council meeting, which over-ran by more than an hour, as “very difficult”, largely because of the complex discussions over climate change contributions by the member countries.

After the shutdown of reactors 1-4 of Kozloduy, each of which was 440 MW, Bulgaria's only nuclear power plant is left only with the two 1 000 MW units 5 and 6.

Bulgaria’s former Finance Minister, Plamen Oresharski, and the Central Bank Governor Ivan Iskrov had a secret deal for depositing about 14% of the fiscal reserve into commercial banks.

This was announced Friday by Bulgaria’s Finance Minister, Simeon Djankov, after his predecessor Oresharski slammed the 2010 draft budget, and asked what was going to happen with Djankov’s idea to deposit part of the fiscal reserve in commercial banks over the expected interest revenue. This idea was put forth by Djankov in the recent weeks but was later rejected by PM Borisov and the GERB government.

“During the former government of the three-way coalition 14% of the fiscal reserve were deposited in 17 commercial banks. This is something that you did not tell the people,” Djankov declared addressing his predecessor.

In his words, his team at the Finance Ministry discovered a secret agreement between Oresharski and the acting Governor of the Bulgarian National Bank Ivan Ikrov which allowed the depositing of about BGN 1 B from the fiscal reserve into commercial banks at Oresharski and Iskrov’s discretion.

“During the government of the former three-way coalition, a large portion of the fiscal reserve was insecure. And not only was it insecure but those transactions were carried out secretly,” Djankov declared adding that his team was currently analyzing the reasons why the previous Minister and the Central Bank Governor made such a secret deal.

“We made this agreement in October 2008 when the banking systems all over the world received enormous public funds, and that included leading banks that had to be saved. We had a preemptive agreement to act in the same way in Bulgaria if that was necessary. Fortunately, we avoided those dangerous trends – with one small exception. But I would not make public things that would endanger the financial stability of the country,” Oresharski replied to his successor’s announcements.

Finance Minister Djankov claims, however, that Oresharski and Iskrov made their secret deal in May 2008, long before the financial crisis kicked in. At that point, the government’s deposit at the BNB was BGN 8,534 B, whereas the fiscal reserve amounted to BGN 9,763 B according to IMF data. 14% of that sum is BGN 1,36 B. The difference between the total reserve and the deposits in the Central Bank is generally the result of current financial transactions of the government.

The response of the Bulgarian National Bank READ HERE.

“The idea to deposit part of the fiscal reserve into commercial banks was generated by the need to raise more revenue for the state budget,” Djankov said regarding his recent idea.

“On September 30, 2009, Bulgaria’s fiscal reserve amounted to BGN 7,691 B. 86% of this sum is currently deposited at the BNB. 30% of that is in daily deposits, where the average interest is 0%. This interest rate varies because of the market, and in some weeks it is negative. In order words, the state budget is paying the BNB to guard 30% of the fiscal reserve. Another 63% are in weekly deposits at the BNB where the interest rate is 0,3%. In other words, Oresharski and the former government did not conduct proper revenue policies,” Djankov explained on Friday.

Bulgaria’s monthly budget deficit in September 2009 amounted to BGN 73,6 M, according to final data of the Finance Ministry released Friday.

This is BGN 18,7 M fewer than the monthly deficit for August 2009. Yet, despite the month-on-month decrease, Bulgaria’s total state budget deficit for the first nine months of 2009 is BGN 552,3 M.

The state expenditures under the consolidated fiscal framework (which includes the state budget and the National Social Security Institute) were BGN 19,077 B in the first three quarters of 2009. This includes Bulgaria’s payment to the joint EU budget paid in September 2009 amounting to BGN 532,4 M.

The above-mentioned sum is almost 62,8% of the planned state expenditures for 2009.

Bulgaria’s total state revenue in the first three quarter of 2009 amounted to BGN 18,525 B, which is 56,9% of the planned state revenue according to the 2009 State Budget Act. This sum is 88% of Bulgaria’s state revenue in the first nine months of 2008.

Of those, BGN 14,868 B come from taxes, BGN 2,611 B are non-tax revenue, and BGN 1,046 B are from EU funds.

The "secret" deal for the depositing of part of Bulgaria's fiscal reserve made in 2008 between the Bulgarian National Bank and the Finance Ministry was a precaution to secure stability of the banking system.

This was announced Friday evening in a statement of the Bulgarian National Bank regarding the claims of Finance Minister Simeon Djankov of a secret deal about the use of the fiscal reserve made by his predecessor Plamen Oresharski and the BNB Governor Ivan Iskrov.

“The agreement between the government and the BNB from 2008 mentioned by the Finance Minister aims at specifying the conditions under which funds from the fiscal reserve could be used to provide for the stability of the financial system. This agreement is a precaution, and it has not had to be used because of the normal functioning of the banking system, and no funds have been provided under it,” the Central Bank statement reads.

“The 17 commercial banks mentioned by Minister Djankov are servicing state budget funds based on agreements with the Ministry of Finance since the Central Bank performs no commercial activities in order to service financial transactions,” the BNB declared.

According to the Central Bank, the contractual relations with the commercial banks have been 100% guaranteed with state bonds and cash deposits.

The amendments of the Bulgarian Citizenship Act will allow for 30 000 individuals to become Bulgarian citizens each year, the Minister for Bulgarians Abroad Bozhidar Dimitrov believes.

Dimitrov said that currently there is a backlog of at least 50 000 applications that have piled up since 2005.

"People have to wait for an answer for 5 years and this triggers corruption; the fact the current Act has no deadline is a problem," the Minister explained.

Dimitrov also stated that lately ethnic Bulgarians who live abroad wish more and more to become citizens, which, according to him, is good for Bulgaria.

Currently about 2 - 2,5 million Bulgarians live in other Balkan countries and in the former Soviet republics. In 2002 – 2009 Bulgaria issued 19 825 passports to Macedonians, 14 231 to Moldavians, 2 185 to Russians, 1 825 to Serbians, 1 743 to Ukrainians, 1 029 to Israelis and 456 to Albanians.

The amendments will include granting Bulgarian citizenship in three months to those who have applied for it and have received their bachelors degree in Bulgaria. A certificate for Bulgarian origins will only be issued by the Agency for Bulgarians Abroad due to the many fake ones now.

Dimitrov pointed as example the fact that from 250 total applications from Moldova 249 are fake, adding it did not mean those people are not Bulgarians, but they used the services of some shady businesses and have themselves become victims of fraud.

With the new Act, Bulgarians, who lost their citizenship over historical events, like the ones living in places that were within Bulgaria's boundaries until 1944, would be able to reinstate it in six months.

Bulgarian President Georgi Parvanov held talks early Friday with Australia PM Kevin Rudd in Canberra at the PM’s offices in Parliament House.

Parvanov and Rudd discussed the two countries’ role in Afghanistan and the the importance of ensuring Afghanistan doesn't again become a safe haven for terrorists. NATO's ongoing role in leading the international military presence in Afghanistan was also part of the leaders' discussion.

Nuclear disarmament was also a focus of the talks, with both saying that they looked forward to working together at the upcoming conference on disarmament next year, at which Bulgaria will hold the presidency.

Parvanov’s visit to Australia has been widely criticized in Bulgaria. The rightist ‘Blue Coalition’ even called on him to cancel his planned visit to Australia and New Zealand over the huge costs of the visit during a financial crisis.

The Swedish investment fund EQT V (EQT) has acquired 100% of Eurocom and 70% of Cabletel, both Bulgaria's major cable operators.

The new was announced Thursday by Piotr Czapski, Partner at EQT Partners, advisor to EQT V.

The deal involves EUR 210 M of which EUR 120 M went for the acquisition while BGN 90 M are slated for future investments.

The two cable operators will continue working as separate providers until 2010 when they will merge into a new company under a new name, Istvan Polony, CEO of Eurocom said, adding the company will also include Cabletel in Macedonia. After the merger Polony will become CEO of the new company.

Ron Finley, current Cabletel shareholder, will maintain 30% minority ownership to be transferred to the new company and would make future investments.

The cable provider plans investments in the cable network in Bulgaria, new digital TV, broadband interneer and phone services and products at the level currently existing only in the US and Western Europe, Poloni is quoted as saying.

The expected profits from the new company are estimated at EUR 70 M per year.

The merger has been approved by the Bulgarian Commission for Protection of Competition. ING Bank had acted as financial advisor for the deal.

Armenian major businessman Gagik Tsarukyan have bought Bulgarian water bottling company Gorna Banya in a EUR 25 M deal, which was sealed at the end of last week, local reports say.

This is the first sale deal to be completed in the Bulgarian water bottling sector this year.

About EUR 20 M of the sale price will be used for covering the company's debts, one of the former owners Evgeni Goranov told Dnevnik daily.

The company owes EUR 12 M in long-term banking loans and another EUR 4 M in short-term funding.

It should pay a separate some EUR 3.5 M to a UK investment fund.

Gagik Tsarukian, arguably Armenia's wealthiest man, owns more than 40 medium and large companies, making up a business empire, which has seen an incredible expansion in recent years.

A former arm-wrestler, Tsarukian started out as a minority shareholder in one of Armenia's two largest breweries in the late 1990s.

Tsarukian has been a member of Armenian parliament since 2003, while a year later he established the “Flourishing Armenia” party. Chairman of Armenia's National Olympic Committee.

The news of Gorna Banya’s sale comes a month after one of its nearest rivals, Devin, majority owned by Austria's Soravia Group, signed an agreement for the sale of a 75% stake to global private equity fund Advent International.

The deal price is said to be around EUR 21 M to 22 M. Its final value will be fixed between the signing of the contract and its conclusion.

The German energy company RWE has decided to withdraw from the construction of Bulgaria's second nuclear power plant at Belene over the failure to achieve the key stages of the project.

This becomes clear from a letter of the RWE CEO, Juergen Grossman, to the head of the Bulgarian Energy Company NEK, which was supposed to be RWE’s majority partner in the Belene project, as cited by BGNES.

The letter is also submitted to the Minister of Economy, Energy, and Tourism, Traicho Traikov, and to Galina Tosheva, the head of the Bulgarian Energy Holding of which NEK is a subsidiary.

On Wednesday, October 28, 2009, RWE announced its withdrawal from the Belene NPP project. NEK selected RWE in December 2008 as a minority partner in the Belene venture. The Germany company was supposed to provide almost EUR 2 B in exchange for a 49% share in the future nuclear plant.

CEO Grossman says in his letter that key stages of the project, which had been negotiated between NEK and RWE, had not been achieved.

“The condition of the Belene project has been discussed in various meetings, including partly in summit meetings. Despite the sufficiently constructive attitude and the efforts of all sides, and especially of the new Bulgarian government headed by Prime Minister Borisov, it needs to be admitted that the key stages which were agreed upon in the Joint Venture Contract between NEK and RWE have not been reached,” Grossman’s letter to the Bulgarian side states.

In his words, the fact that those deadlines have not been obeyed is the reason the German energy giant terminated the contract.

He goes on to underscore the need for a complete financial concept of the project, especially in the time of the raging economic crisis. The RWE CEO does mention that certain successes have been achieved.

“For example, our joint project work with NEK confirmed that the technical design of the reactor of the AEC-92 type of the Russian company Atomstroyexport, and the purpose of the Belene construction ground meet the respective high international requirements,” Grossman’s letter reads.

The RWE head concludes by saying that the company has reached an agreement with Bulgarian Prime Minister Boyko Borisov to continue their dialogue and discussing of joint projects and opportunities in Bulgaria’s energy sector.

The Belene Power Company in which NEK had 51% and RWE had 49% was set up in December 2008. The nuclear power plant was supposed to be in operation in 2014, with a total electricity capacity of 2 000 MW.

The withdrawal of RWE puts the construction of the plant in question. According to the Bulgarian government, the new best-case scenario, should the cabinet decide to go ahead with Russian-sponsored project, would mean picking a new investor, which would cause a delay of at least 1,5 years.

German energy company RWE AG announced Friday that it had concluded an agreement for the construction of a new electric power station in Turkey.

The news comes only two days after RWE AG abandoned all plans to participate in the construction of a 2000MW nuclear plant in the Bulgarian Danube town of Belene, citing funding problems.

RWE AG, based in Essen, Germany, announced Friday that it will make a final decision about investment some time during the first quarter of 2010. Financial details concerning the deal have not yet been revealed, cites BTA.

The plant will be situated in the Turkish city of Denizli in a joint venture with Turcas.

Construction will be the responsibility of Metka, a Greek company that specializes in building power stations. German group Siemens AG will supply the main components, including gas and steam turbines, RWE announced Friday.

The plant is expected to be completed in 2012. Its generating capacity will be 775 MW; the design is for a gas combined cycle power plant (CCCP).

RWE AG is among Europe’s five largest utilities. The company is active in the generation and transmission as well as the sale and trading of electricity and gas. RWE AG is the largest power producer in Germany and second in the UK.

This agreement with Turkey is part of RWE AG’s strategy of expansion in Central and South-Eastern Europe.

The shareholders of the troubled steel-maker Kremikovtzi have rejected the recovery plan proposed by the assignee in bankruptcy, Tsvetan Bankov.

According to Darik Radio, the shareholders are unwilling to go ahead with the plan which provides for the recapitalization of BGN 944 M owed to creditors by transforming them into Kremikovtzi shares.

A month ago, Bankov invited all creditors to decide on whether they wanted to capitalize the money the factory owns them. According to the replies, the creditors wanted to transform into shares debts totaling BGN 1,6 B.

The total debts of Bulgaria’s former largest steel-maker amount to BGN 1,9 B, whereas the market value of all of its assets was estimated at BGN 837 M at the beginning of September 2009.

The creditors of the steel plant include the state-owned companies Bulgargaz (gas provider), the National Electric Company NEK, and the railway operator BDZ.

November 9, 2009, is the deadline for the bondholders to make a final decision on the recovery plan after any potential readjustments.

The Australian Global Carbon Capture and Storage Institute (GCCSI) will consult Bulgaria on the construction of Maritsa East 4, a new power plant with cleaner carbon emissions, focused on coal-fired power generation.

The Bulgarian Minister of Economy, Energy and Tourism, Traiko Traikov, and the Chief Executive Officer of the Australian institute, Nick Otter, had agreed, the ministry press center has announced. The two met in the Australian capital Canberra, where Minister Traikov is on an official visit.

Minister Traikov and Nick Otter also agreed that Bulgaria should become a member of the Global Institute (GCCSI).

The International Institute GCCSI is financed by the Australian Government, and its primary goal is the introduction of pure technologies in industry.

GCCSI offers expertise and financial consultancies to enterprises introducing technologies while preserving the environment. Such consultancy assistance may be used both for new power plants and for existing coal power stations.

In the context of climate change, the adoption of ecologically based industry in Bulgaria is of extreme importance. Fighting climate change is a priority of the EU as a whole, and of Bulgaria in particular.

In this respect, agreements of the kind made with GCCSI are of particular significance for the country. Bilateral trade exchange between Bulgaria and Australia in 2008 amounted to USD 101,4 M, a record level in the past eight years.

Czech Republic President Vaclav Klaus is satisfied with the opt-out that his country received at EU Council meeting in Brussels Thursday night, and is going to sign the Lisbon Treaty into ratification.

This has been announced by Klaus himself in a communique issued Friday, as cited by BGNES.

“I believe that the result that we have achieved is the best possible, and I am not going to set additional conditions for the ratification of the Lisbon Treaty,” the Czech President states.

Because of his opposition to the Lisbon Treaty, the Czech Republic still remains the only EU member state which has not ratified it.

Czech PM Jan Fischer has stated in Brussels he hoped President Klaus was going to sign the Lisbon Treaty ratification act before he left for a state visit to the USA on November 3, 2009.

Earlier French President Nicolas Sarkozy said the Lisbon Treaty would enter into force on December 1, 2009.

The EU Council is going to hold a special summit meeting, most likely in November 2009, with respect to the nominations for the positions of EU President and High Representative for Foreign Policy.

This has been announced by the Prime Minister of Luxembourg, Jean Claude Juncker, after the end of the EU Council summit in Brussels Friday.

“The Swedish EU Presidency has informed us that it is going to start consultations the day after the Czech President Vaclav Klaus signs into ratification the Lisbon Treaty, and that it is going to call up a special meeting of the EU Council regarding the nominations for the new positions,” Juncker said.

Meanwhile, France and Germany have agreed to support one and the same candidate for EU President once the Lisbon Treaty is finally ratified, French President Nicolas Sarkozy announced. He did not reveal which EU President bidder the two leading EU nations are going to support.

Sarkozy hinted, however, that former UK Prime Minister Tony Blair may not manage to get the new top EU job. Sarkozy said the names of those mentioned as favorites did not necessarily include the name of the person who will be the ultimate winner.

The crisis on the Bulgarian real estate market has affected severely the budget of the capital Sofia.

In the first three quarters of 2009, the Sofia Municipality raised only 28% of the total revenue for the period that it expected from property deals, according to data for the performance of the municipal budget. The local tax on real estate transactions is one of the major sources of revenue for the budget of the Bulgarian capital.

For all of 2009, the Sofia Municipality expected a total revenue from the real estate deals of about BGN 155 M, which was supposed to be 26% of the total municipal revenue.

However, only BGN 43,5 M were raised from the local tax on property deals in the first nine months of 2009.

The Sofia Municipality is performing better on other sources of revenue – 71% of the envisaged building taxes have been collected, and so have 91% of the car taxes.

In the first nine months of 2009, the Sofia Municipality had a total revenue of BGN 751,5 M vs. expenditures totaling BGN 666 M.

The acting Sofia Mayor Minko Gerdzhikov has stated he hoped that the municipal budget would end 2009 without a deficit.

In his words, a potential deficit in the budget would be compensated with additional revenue from anti-crisis measures such as collecting more of the overdue payments owed to the municipality.

Real estate property in Bulgaria is the most sought after by Russian buyers, according to data of the Russian company MIEL’ Distant Property Management.

The company, whose portfolio includes real estate offers in 20 countries, has released data saying that in the third quarter of 2009 25% of all inquiries it received were for properties in Bulgaria, Interfax reported.

This ranks Bulgaria first as an investment destination for Russian buyers, followed by Turkey with 17% and Spain with 13%.

What is more, the company says all of its Russian clients who considered buying real estate property in Bulgaria actually bought it.

MIEL’ DPM explains that Bulgaria is attracting buyers with the affordable prices, the decent quality of real estate, the variety of offers, and the simplified purchase procedure.

70% of those Russians looking for property in Spain have also managed to find what they want which places Spain second after Bulgaria on that criteria.

Legal charges are upcoming for former ministers who have abused millions of BGN, Interior Minister, Tsvetan Tsvetanov, promised Friday.

Tsvetanov said those charges are to be pressed in the next 20 days, adding this would be a long process from the legal stand point, but he is counting on the help of the public intolerance in the matter.

The Minister also informed new revelations about corrupt employees of the Interior were pending.

Tsvetanov is in the city of Pazardzhik to open the third Political Academy of the Youth Organization of his ruling Citizens for European Development of Bulgaria (GERB) party.

Bulgaria's Deputy Health Minister, Lyubomir Gaidov, has been dismissed Friday, the Health Ministry press center informs.

Darik radio further reports the Health Ministry made the clarification before them that Gaidov himself had requested to vacate the position.

Gaidov was in charge of the “Management of Programs and Projects” department.

In the meantime, the Health Ministry appointed Dr. Teodora Dzhaleva as Director of the Executive Agency for Transplantation. She replaces Professor Hristo Kumanov who resigned citing “lack of trust in his leadership.”

The Bulgarian Ministry of Foreign Affairs has ordered the Bulgarian Ambassadors to Turkey and the US to give explanations for ‘disciplinary violations’ in the July 5 general elections.

The Disciplinary Board of the Ministry of Foreign Affairs has presented the results of checks on the organization and conduct of elections of MPs on July 5, 2009 in Turkey and the United States, the Ministry press service statement reported.

The statement added that the Disciplinary Board identified disciplinary violations warranting disciplinary action appropriate to the employees.

The Foreign Affairs Minister, Rumiana Jeleva, has ordered the heads of the overseas missions in Ankara – Ambassador Branimir Mladenov, and in Washington - Ambassador Lachezar Petkov to appear on November 2 at the Ministry of Foreign Affairs to give explanations in relation to the imposition of specific disciplinary action.

Jeleva concluded that after receiving explanations of the above officials she will announce her decision on the case studies.

The ethnic Turkish party DPS has won the partial local elections in the Ruen Municipality in southeast Bulgaria.

As expected, the DPS candidate Ismail Osman received 52,5% of the votes and won without a run-off. The candidates of the Socialist Party and GERB received fewer than 5% of the votes.

16 000 of the 27 000 eligible voters cast their votes on Saturday.

85% of the Ruen Municipality, Burgas District, is from the ethnic Turkish minority.

One of the Bulgarian Ministers decided to take a walk in the streets of Sofia in order to see how ordinary people lived.

He met a young boy playing in front of a house, and asked him,"Where is your father?"

"He went to work with our new car."

"And where is your mother?"

"She went shopping with our older car."

"Well, is there anyone at your home now?"

"Grandma is at our place, she is watching a soap opera on our new home cinema system."

"See, kid, I am the one you should be thankful for all that!"

The boy started cheering,"Grandma, grandma, our uncle from America is here!"