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

700 People at the AmCham X-mas Party 2009

i s s u e 1 0 5d e c e m b e r 2 0 0 9

Energy:Richard Morningstar Praises Bulgaria’s Energy Policy

Events:AmCham Collects 20,000 Leva in Charit y for 2009Prime Minister Receives AmCham Board MembersForeign Minister Meets Chamber Before U.S. VisitTax Seminar Explains U.S-Bulgarian Treat y

Special Inter view:Simeon Djankov: Bulgaria Is Ready to Enter ERMII

AES is one of the world’s largest global power companies, with 2008 revenues of $16 billion and we own and manage more than $35 billion in total assets. With operations in 29 countries on fi ve continents, AES generation, production and distribution facilities have the capacity to serve 100 million people worldwide. We take leadership in the business of providing power in a safe and responsible way. We seek to continually improve the environmental performance of our businesses. In Bulgaria, Stara Zagora region the company constructs a 670 MW “AES Galabovo”, 1.2 billion euro Project.

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Dear Reader,

2009 was the year of financial and economic crisis that shook not

only the “world” but also the lives of practically every one of us.

Bulgaria was no exception and certainly we all felt its consequenc-

es.

Furthermore, during these difficult times we also had a change of

Government in the country. The change of power is a challenging

process in any country as the new Government has to assess what

it inherits and decide on how to move forward. To its credit the new

Bulgarian Government declared an ambitious agenda that rests on the principles of honesty, trans-

parency and open dialog with all stakeholders. This has been one of many encouraging signs that

lead us to believe that the worst is behind us.

AmCham Bulgaria has been an active and vocal partner to the new Government. We have had

open discussions with the Prime Minister and Cabinet on the AmCham White Paper and

Recommendations to the Bulgarian Government. And we are pleased to report that we share a

common view on the majority of issues and a mutual understanding on how to address the critical

challenges that our economy faces. The Chamber has already provided assistance on a number of

measures and reforms that the administration has started to implement.

We are further thankful that alongside the improved communication that has prevailed between the

Government and the business community, there is also a very pragmatic approach the Government

has taken in solving many of the issues that have confronted member companies for a long time.

Over the past year AmCham was successful in further developing its networking capacities with

“Meet the new members” gatherings, the traditional sports and fun events, and the CSR activities

that our members have actively engaged in.

Our achievements would not have been possible without the unwaivering support and commitment

of all of you, AmCham members, and in particular Ambassador Nancy McEldowney, DCM Alex

Karagiannis and Chargè d’Affaires ad interim Susan Sutton and Scott Pozil, the U.S. Commercial

Counselor. We sincerely appreciate all you have done.

In the holiday spirit I wish you a Merry Christmas and a very successful and healthy New Year!

Sincerely,

Anthony C. Hassiotis

President

American Chamber of Commerce in Bulgaria

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 5d e c e m b e r 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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a m c h a m b u l g a r i a

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

Christmas Party Draws 700 . . . . . . . . . . . . . . . . . 4

t h a n k s g i v i n g

AmCham Collects 20,000 Leva

in Charity for 2009 . . . . . . . . . . . . . . . . . . . . . . . 8

m o n e y

Simeon Dyankov:

Bulgaria Is Ready to Enter ERMII . . . . . . . . . . . . .12

By Milen Marchev

e n e r g y

Morningstar Praises Bulgaria’s Energy Policy . . . . . .14

Morningstar: Opera and Gas . . . . . . . . . . . . . . . .16

a n a l y s i s

Domestic Economy Set For Recovery

After Rapid Adjustment . . . . . . . . . . . . . . . . . . . .18

The Haiku President and

Complexities of Europe . . . . . . . . . . . . . . . . . . . .20

By Boyko Vassilev

a m c h a m m e e t i n g s

Prime Minister Receives

AmCham Board Members . . . . . . . . . . . . . . . . . .24

Foreign Minister Meets Chamber

Before U.S. Visit . . . . . . . . . . . . . . . . . . . . . . . .24

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

Government Officials Explain HR issues . . . . . . . . .26

Change Your Life to Save the Planet . . . . . . . . . . .28

Tax Seminar Explains U.S-Bulgarian Treaty . . . . . . .30

Cleveland Mayor Outlines

Business Opportunities . . . . . . . . . . . . . . . . . . . .31

Five New Members Presented. . . . . . . . . . . . . . . .32

m e m b e r n e w s

McDonald's, AstraZeneca Crowned

Best Employers in Bulgaria . . . . . . . . . . . . . . . . .34

Sasha Bezuhanova Was Awarded with

the Order of the Star of the Italian Solidarity. . . . . .35

Eurobank EFG Wins the Biggest

European Award for Eco-Management . . . . . . . . . .36

n e w m e m b e r s . . . . . . . . . . . . . . . . . . . . .36

AECOM

PPD

AMCHAM Members as of December 01, 2009 LIst . . 3M (East) AG . AA KRES EOOD . Abbott Laboratories S.A. . Accor Services Bulgaria . ACO Building Elements Ltd. . ACSIOR Ltd. . Adecco Bulgaria ltd. . ADIS Ltd. . Advance International Transport (Balkan) EAD . AECOM Bulgaria Branch . AES Corporation . AFA OOD . AIG Bulgaria Insurance & Reinsurance Company EAD . AIMS Human Capital . AIMS International Bulgaria EOOD . Air France Trade Representative . Alexander Hughes Bulgaria OOD . ALEXANDROV GROUP CORPORATION . Alfred C.Toepfer International . ALICO Bulgaria . 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 . AON Bulgaria . 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. . BMW Vertiebs GmbH - Branch Bulgaria . 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 . 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 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 . 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 . EKO Bulgaria . 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. . Entrea Capital . Equest EAD . Equity Share International OOD . ERATO HOLDING Plc . Ericsson Telecommunications Bulgaria EOOD . Ernst & Young Bulgaria . Etap Adress . Euro Energy Consulting OOD (2EC) . Eurobank EFG Bulgaria (under the brandname of Postbank) . EurOmax Resources Ltd. . European Bank for Reconstruction and Development (EBRD) . European Trade Center OOD . 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 . Interdean . 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 . Kolbis International Transfer Corporation . KPMG Bulgaria . Kraft Foods Bulgaria . LANDMARK Property Bulgaria . Lexim Sofia Ltd. . Lindner Immobilien Management EOOD . Lirex BG Ltd. . 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 . 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 . Movex Relocations . Mr. Dider Stoessel . Mr. Marco A. Bosman . Ms. Nadezhda Stoyanova . 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 . 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 . PMB EOOD . Polis Construction SA . PPD Bulgaria EOOD . Praktiker EOOD . Pratt & Whitney . Premier Tours Ltd. . PricewaterhouseCoopers . Procter & Gamble Bulgaria . Project Management Ltd. Branch Bulgaria . PSG Payroll Services Ltd. . Radisson Blu 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 . SigmaBleyzer Investment Group LLC - Representative Office . SKE Bulgaria EOOD . Sodexo Pass Bulgaria EOOD . Sofstroy AD . Soravia Bulgaria Ltd. . St. Sofia Golf Club & SPA . 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 . VIVACOM . 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 European Trade Center

Treasurer Mr. George Georgiev Motorola Bulgaria

Members Mr. David Butts CMS Cameron McKenna Bulgaria

Mr. Atanas Garov Colliers International Bulgaria

Mr. Thomas Higgins Balkan Accession Fund

Mr. Zachary Hampson Grenville Bulgaria

Ms. Dana Leff Niedzielska PPD Bulgaria

Mr. Peter Lithgow AES Maritza East 1

Mr. Bernard Moscheni Vivacom

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

Executive Director Valentin Georgiev

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Christmas Par t y Draws 700Every year AmCham’s Christmas party is gaining in admira-tion among our members and guests, and this time was no different, with more than 700 people coming to Sheraton Sofia Hotel on Dec. 9. Picturesque bells, small gifts for luck from Domaine Boyar, and a spirited “Jingle Bells” from Georgi Robev Choir provided party surprises at the Royal Hall gates.

Starting with the welcoming words of the AmCham leadership, the chamber’s recognition within a large community of partners and friends could be seen that evening. Except for being a season of gift-giving and celebration, December is a time associated with the abundance of social events where part-ners and friends meet to wind up the year and eventually initiate new projects. Ambassadors, U.S. embassy representa-

tives, AmCham board members, and many member companies were among the guests.

The well-known Dirty Purchase band and Georgi Robev Choir entertained the crowd. Adding to the Christmas moods, guests were welcomed at the entrance with a small gift - a bell to be put on the Christmas tree. AmCham greatly appreciates the kind support of Vivacom, Johnnie Walker, Domaine Boyar and Coca-Cola.

Following the spirited introductions, coworkers and friends enjoyed their time at the Sheraton, while waiters filled their glasses with assorted beverages. The fantastic music provided by Dirty Purchase drew the crowd to the dance floor, where the entertainment continued into midnight. n

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Christmas Par t y Draws 700

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During charity events in 2009 the

AmCham Bulgaria collected 20 000

BGN to let a helping hand to graduat-

ing orphans in favor of Projects:

Transition Home Together in

Gurmazovo, Sofia Integra, Samaritans

Stara Zagora, as well as for monthly

stipends for 12-grade orphan stu-

dents. As in 2008, the AmCham

Corporate Responsibility Committee

suggested to continue supporting the

orphans - children without parents or

living without parents in home-like

institutions.

The chamber is thankful to all gener-

ous contributors, bidders and spon-

sors who provided their help for the

beneficiaries at the annual family

Thanksgiving dinner on November

24th held at the Radisson Blu Grand

Hotel. The fundraising for charity

succeeded in gathering 16 000 BGN

collected during the open and silent

auctions, as well as from sold raffle

tickets and dinner registration fees.

Additionally the AmCham Independence

Day Celebration in July collected

4000 BGN for charity purposes.

More than 130 designated guests par-

ticipated in the charity event. The cham-

ber extends its gratitude to America for

Bulgaria Foundation, ENEL Maritza East

3, and Penkov, Markov&Partners who

kindly supported the party. Live music

performance was provided by well

known jazz singer Vassil Petrov and

AmCham Collects 20,000 BGN in Charit y for 2009

More than 130 designated guests of AmCham member companies participated in the charity evening within the American Thanksgiving tradition.

Ambassador of South Africa in Bulgaria Sheila Camerer and Anthony Hassiotis, President of AmCham and CEO of Eurobank EFG Bulgaria.

Peter Lithgow, AES Corporation, David Hampson, Grenville Bulgaria and Arthur Moore, Tishman International discussing joint strategy for successful bidding in charity auction.

In the middle: Patrick Favre and Stefane Delahaye from the French-Bulgarian Chamber of Commerce with many successful bids and presents.

Cheers with the Beaujolais Nouveau 2009! H.E. Etienne de Poncins, the Ambassador of France and Tanya Kosseva-Boshova, AmCham Vice President.

www.etc-bg.com02 976 9 976

www.colliers.com

The new business district of Sofia!

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Frank Bauer with America for Bulgaria Foundation (first right), David Hampson, Grenville Bulgaria and Kelly Adams-Smith (first left) among the guests at the charity evening.

Enel Maritsa East-3 company representatives actively participated in the charity auction at the evening.

Susan Sutton, U.S. Charge d’Affaires told the history of the Thanksgiving tradi-tion and customs in the U.S. Jazz-singers Kamelia Voche and Vassil Petrov.

Angel Zaberski’s jazz band and the sur-

prise present of the party was the per-

formance of Kamelia Voche.

The AmCham members and guests gen-

erously contributed or bided for various

items of the open and silent auctions.

AmCham is thankful to: H.E. Sheila

Camerer, Ambassador of South Africa to

Bulgaria, Accor Services , Albena Petkova

with Deloitte, Allied Pickfords, AVON

Cosmetics, Balkan Star Automotive, Brown

Forman Beverages, Bulgarian Land

Development, CenTransit.bg with Premier

Luxury Mountain Resort & Molerite

Bansko, Dana and Lukasz Niedzielski,

David Butts with CMS Cameron McKenna,

DEVIN, Domaine Boyar, Emmis Bulgaria,

ENEL Maritza East, Grand Hotel Sofia,

Grenville, Hotel Yastrebets Wellness &

SPA, Integra Association, painter Todor

Popov, Paul Tobin with PWC, Radisson

Blu Grand Hotel, Red Devil & Right

Rental, Rising Force, Roy Campbell with

National Distributors, Tom Higgins with

Balkan Accession Fund, Stefane Delahaye

with Euro RSCG, Patrick Favre with

Starbat, VIVACOM, Wolf Theiss. Several

companies and individuals kindly provided

additional financial support, among them

Bayer Bulgaria, CMS Cameron McKenna,

Eurobank EFG Bulgaria, Deloitte Bulgaria,

ENEL and PPD. n

...however the guitar went to David Butts, Managing Partner of CMS Cameron McKenna who was the biggest contributor in the charity auction.

The Chairman of the Board of Balkan Star Automotive Manfred Multz and the CEO of 3M Roumen Mihailov in tough competitive bid for the Fender guitar...

In big competition for the Harley Davidson auction items.

In the middle: Lukasz Niedzielski, PPD Bulgaria, one of the main contributors to the auction, the happy winner of a box of wine from the special collection of the Ambassador of South Africa H.E. Sheila Camerer’s winery.

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- Minister Dyankov, more than a few international experts have said that Bulgaria has been overcoming the fallout from the global economic cri-sis better than many other countries. For instance, Bulgaria boasts one of the lowest inflation rates in the EU. Will the government succeed in main-taining these macroeconomic indica-tors?

- Not only that, but I fully expect that after the first successes of our anti-crisis program, we will return to eco-nomic growth in 2010. When this hap-pens, the government will have an easier time balancing its fiscal and financial policies, which will help keep the macroeconomic frame intact. We came through a brief period of unchecked deficit spending in April-July, but returned to a fully stable fiscal policy and balanced budgets in October-December. In other words, our fiscal position is solid and from this point on, our main goal is the return to sustained economic growth.

- Entering the Eurozone will undoubt-edly help to maintain economic sta-bility, and thus will be much appreci-ated by the business community. What are Bulgaria’s positions with respect to the adoption of the Euro, and will we be able to keep up with the stated intention of qualifying for ERMII by the spring of 2010?

- The developments have been promis-ing so far. By the end of 2009, Bulgaria will be qualified by all criteria for entrance into ERMII, Eurozone’s “wait-ing room.” The situation will remain similar for 2010, too. By our current estimates, after the adoption of the budget Bulgaria is likely to become the only EU country, which will fulfill the

Maastricht criteria for 2010. This, undoubtedly, will prop us in our efforts to enter the ERMII and subsequently the Eurozone. We are stable in fiscal terms, and next year, actually, we will be among the few EU members without a super-deficit. From that foundation, we will have to accomplish only a few more tasks in order to submit a formal candidacy. One of them is preparing the so-called Convergence Program, which has a deadline by the end of January 2010.

We are making a few adjustments to align it with Budget’2010 and the expected improvement in the economic growth forecast for 2009 from negative 6.3% to negative 4.9 percent. By early January, we will be able to present this strategic document to the government, business community and trade unions through the Tripartite Council, so we can negotiate its domestic approval. After that we will submit the program to the European Commission, where the process may take a while because of the anticipated super-deficits in 23 out of the 27 member states. Most likely it will not be until mid March when all parties will have their programs evalu-ated. If Bulgaria receives positive feed-back, we will have all the necessary documents ready to apply for a formal admission to ERMII.

- Even though the perspectives you have just outlined seem to be quite promising, company layoffs continue, unemployment grows and more peo-ple are relying on social assistance to stay afloat. How far do you think can the levels of employment drop before Bulgaria’s economic situation starts improving?

- In times of crisis, usually exports suf-

fer a decline first, then investments dry up, and then the economic growth slows. These will also be the first indi-cators to bounce back. Unemployment actually starts growing fast six to nine months after the beginning of the cri-sis, which explains why we are feeling its effects so strongly now. Even after we see signs of economic growth pre-cipitated by the success of our anti-crisis program, we should expect unem-ployment figures to continue increasing. I expect a few hard months in the spring, even if we maintain strict fiscal discipline and achieve economic growth. Currently, unemployment stands at 8.3 percent, and I expect it to grow by the end of 2009, but to remain under 9 percent. In 2010, though, I anticipate unemployment rates in the order of 11.5 percent, which will still be among the lowest in the EU and in contrast to many other countries in the region.

This situation is ripe for social tensions and it generates additional expenses for the social services. We have includ-ed in our 2010 budget such disburse-ments intended to help the socially weak and unemployed. Therefore, of utmost importance in our plans is not just maintaining fiscal stability, but also attracting foreign investments. I am cer-tain that the recent increase in our Standard and Poor’s credit rating will aid in this respect. The adoption of Budget’2010 has already helped, as did the reforms in the customs system and National Revenue Agency.

- Many of AmCham member compa-nies work with foreign-based coun-terparts and therefore are concerned about the prompt refunding of VAT. What has the government done to cut the time for receiving these

Simeon Djankov: Bulgaria Is Ready to Enter ERMIIThe finance minister promises to refund VAT within a week to companies with excellent tax records

By Milen Marchev

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refunds?

- The amendments to tax laws adopted recently allowed us to slash in half the refund times. From Jan. 1 2010, the waiting period will be 45 days (from 90 before) in case of an audit, while in all other instances the time has been decreased from 30 to 15 days. This is a huge success for the government and parliament. We are currently working on another idea, which is to create and publish a so-called “golden list of tax-payers.” This roster will include compa-nies with excellent records as far as their timely tax payments go, and com-panies whose audits have shown no irregularities. Our ambition is to refund such businesses within a week. Medium- and large-sized companies will benefit most – and those are the majority of your members – because such an arrangement will make their dealings with tax authorities a lot smoother.

- What opportunities do you see for co-operation between the govern-ment, specifically your ministry, on one side, and businesses, such as represented by AmCham, on the other? What can the business com-munity do more for the improvement of the economic climate, except by paying taxes regularly?

- Strict payment of all due taxes is indeed a very important contribution to the well-being of Bulgaria. This guaran-tees improved infrastructure, education, health care, social services, which are all that more critical during the times of crisis. Our co-operation with the busi-ness community is a priority, because this government’s main foreign-policy goal is entering the Eurozone. I travel a lot all over the EU and talk to the respective finance ministers about our achievements and successes. To sup-plement such government-level efforts, though, we really need to have the lob-bying support of Bulgaria’s businesses and non-profit organizations. This will make it abundantly clear to European politicians, European Commission mem-bers and European Central Bank repre-sentatives that entering the Eurozone is a priority not only for the Bulgarian gov-ernment, but also for the businesses and society as a whole. In this sense I truly hope that AmCham will support us fully in making this a number-one prior-ity in our foreign policy. n

m o n e y

The Minister of finance Simeon Djankov will turn 40 next year. Before Boyko

Borissov asked him to lead the Bulgarian state finances in July this year, Djankov

was a chief economist on finance and private sector affairs at the World Bank

from 1995. He worked on the countries mostly threatened by the crisis world-

wide. He participated in various programs of the Bank on privatization, corporate

governance, regional reforms in North Africa, East Asia and other regions around

the world. Mr. Djankov was a principal author of the annual review of the World

Bank - World Development Report 2002. He is an author of more than 70 spe-

cialized articles in the most prestigious economic journals in the world - Quarterly

Journal of Economics, American Economic Review, Journal of Finance, Journal

of Financial Economics, Journal of Public Economics. He is creator of the

annual Doing Business report, the top-selling /in more than 100 000 copies/

publication of the World Bank Group. He is ranked among the 100 Most Cited

Economists in the world. He has a master's degree and PhD in International

Commercial and Financial Relations, University of Michigan and also established

a think-tank at Harvard University. Djankov is married, with two children

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Richard Morningstar, special envoy of the U.S. secretary of state for Eurasian energy, said he was encouraged by the efforts of Bulgaria to take a leading position in the EU energy policy. In his address delivered during the AmCham business discussion at the Sheraton Sofia Hotel, the guest said that Washington is working closely with Brussels, EU member states and Bulgaria on many energy issues as well as on the issues of alternative energy resources. Special Envoy Morningstar assured that he would like to work with Bulgaria to enhance European energy security.

“Bulgaria is on the right track. We notice and appreciate your efforts. The country is proactive with respect to the completion of the Southern energy corridor, which includes the Nabucco gas pipeline. It is important that you work and take a leadership position among other countries in the region in developing the alternative sources and alternative routes,” Morningstar said.

The U.S. envoy also commented on the opportunities for Bulgaria to participate in the gas pipeline projects.

“Bulgarians have to talk with the Russians regarding South Stream. There is no way to avoid this, but at the same time when looking at the energy policy of Bulgaria, in my opinion, you are doing the right thing,” added Morningstar.

In his words, U.S. companies will be interested to work with Bulgarian counterparts in nuclear field projects, energy infra-structure projects, and storage facilities.

“Bulgaria is looking for gas storage, nuclear options might be also of interest to the United States, there will be a lot of energy projects to help people of Bulgaria, as well as U.S. companies can be involved, as this will create opportunities,”

Morningstar Praises Bulgaria’s Energy Policy

AmCham BoD Members at the family photo with Ambassador Richard Morningstar (fourth left).

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Morningstar further said.

He also suggested there will be interest in the proposed priva-tization of the interconnectors. At the same time it is very important that Bulgaria maintains good investment climate, keeps up with the reforms and transparency, Morningstar added.

“The United States cannot tell Bulgaria what are the country’s interests. Those decisions must be taken here, and those are the decisions of Bulgaria, nobody else.”

Answering a question of whether Iran will be a part of Nabucco project, he said at the time that it is not likely to happen: “We held negotiations with Iran, and if our differences, including in the nuclear field, will be resolved, under these circumstances Iran should participate in Nabucco.” n

Anthony Hassiotis, AmCham President (left) talking to Ambassador Richard Morningstar and his assistant.

AmCham BoD and designated guests at the head table listen to the speech of Ambassador Morningstar.

Assen Agov with “Democrats for Strong Bulgaria” asked whether the U.S. administration is ready to support the diversification of energy sources in Bulgaria.

Angel Semerdjiev, State Energy and Water Regulatory Commission, Chairman and Tasko Ermenkov, executive director of the Agency for Energy Efficiency.

The media were eager to know more about the U.S. involvement in the energy issues in the Eurasian region. AmCham members and other companies participated in the meeting.

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He came to Sofia a week earlier than the Russian energy delegation. Richard Morningstar, special envoy of the U.S. secretary of state for Eurasian energy, was quite glib on Bulgarian soil. When I asked him whether he aims to forestall any messages the Russians wanted to make, he said that it was a mere coincidence. The diplomat learned about the Russian visit only after he had landed in Bulgaria.

That may be so. His visit is a good reason to remind our-selves, however, how complex are the options and the dilem-mas facing Bulgaria’s energy policy. These could be best exemplified by the two gas pipeline projects – South Stream launched by Russia and Nabucco, supported by the West. Bulgaria aims to participate in both.

It was considered until very recently that Russia has gas, and the West has plans; that Nabucco (named after the famous Verdi opera, which the five partners saw in 2002, after they had agreed to build a pipeline) will be nothing more than that – an opera; and that the major problem facing the Western project – where to find gas – will not be easy to solve at all. The statements made by Morningstar in Sofia, indicated that things have started to change.

Yes, Nabucco does have problems, the U.S. envoy admitted. But immediately after that he clarified where the gas could come from: Azerbaijan, Turkmenistan and Iraq (and obvi-ously not from Iran). A parallel could be made with the prob-lems faced by South Stream: it is not clear who will pay, while Nabucco is backed up by a consortium; will the gas be sufficient for everyone; what are the commitments behind the memorandums, which Russia has already signed?

„I will admit that I personally like Nabucco better,” Morningstar said adamantly.

”Nabucco is an opera, but it will be a pipeline as well.”

Obviously, the West already has some moves left for the energy-geopolitical check board in the region. Until recently, the call to diversify energy sources was in a limbo, as Bulgaria’s choice was gas from Russia or nuclear fuel from Russia. The problem was made clear during the gas crisis last winter. Bulgaria turned out to be one of the most strong-ly affected European states. At the same time, the energy projects with U.S. participation on the Balkans were slightly off-schedule. The Bourgas-Alexandropoulos oil pipeline (where Russia is the main player) was in a somewhat better shape than the AMBO project (Bourgas – Vllora), supported by the Americans. That is why the better perspectives for Nabucco provide an opportunity for Bulgaria to choose from more maps in the complex negotiations with Russian politi-cians and energy experts.

Nobody doubts that these talks will be exceedingly complex. From Russia’s side, Bulgaria has a legacy of memorandums for the South Stream project (with all the question marks), Bourgas-Alexandropoulos (which is opposed by almost all Bourgas citizens), and the expensive Belene Nuclear Power Plant project. The cabinet headed by Boyko Borissov will have to perform miracles in balancing the country’s energy needs, alliance commitments to the West, pro-Russian public opinion and lack of money stemming from the economic crisis. The United States played up not only the progress of Nabucco as an argument for sticking with the West, but also its readiness to invest in nuclear power utilities in Bulgaria. Ambassador Morningstar refrained from specifying what he had in mind, but it seems that Washington is viewing a new block at the Kozloduy Nuclear Power Plant rather than a new complex in Belene.

„Bulgaria must decide according to its own interests. Neither we nor Russia may tell you what to do.”

Ambassador Morningstar repeated this statement five times when we talked – and it is, of course, true. Nevertheless, it does not make Bulgaria’s energy problem more simple or easier to solve. n

Morningstar: Opera and Gas

Richard Morningstar, Special Envoy of the United States Secretary of State for Eurasian Energy meets Bulgarian President Georgi Parvanov during the envoy’s visit in Sofia. Morningstar also has a personal meeting with Prime minister Boyko Borissov.

By Boyko Vassilev

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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

The global economic crisis has impact-

ed the country causing a substantial

contraction in domestic and external

demand and bringing output growth to

a slowdown and ultimately to a reces-

sion this year. Strong growth rates over

the past few years, fuelled by robust

domestic demand, large foreign invest-

ment flows in the real estate and finan-

cial sectors, and fast credit expansion

have come to a dramatic slowdown

since the beginning of the year. The

adverse socks from financial instability

abroad and more importantly from

diminishing foreign demand has exposed

the vulnerabilities stemming from

domestic and external economic imbal-

ances. Foreign investments seeking

profitable projects in the new European

Member State have fuelled nominal

wage growth and inflation. This fed

back to further growth in private con-

sumption and demand for imports,

worsening the current account balance.

As a result of the fast expansion in

consumption, the tax revenues were

thriving and the government budget

posted persistent surpluses.

Major adjustments to the new domestic

and external environment have taken

place in the course of 2009. Due to the

limited possibilities to manage money

supply in currency board conditions, the

major burden of the adjustment is

bound fall on the product and labour

markets. Credit conditions have become

increasingly tight after the eruption of

the financial crisis, putting a consider-

able strain on domestic industries. The

real estate and construction sectors

were hit particularly hard. The credit

stock growth subdued to just 15.9% y/y

as of end-September relative to 33% y/y

at end-2008. Foreign investments fell to

6.3% of GDP in September compared to

19.2% y/y in 2008. The fall in domestic

demand has caused a contraction of

the current account deficit to 6.3% of

GDP in September from 25.4% last year.

This adjustment was mainly due to the

decline in imports to 25% of GDP in

September relative to 45% last year. The

decline in economic activity has brought

an increase in unemployment, a slow-

down in the nominal wage growth and a

deficit in the public accounts.

OUTPUT

After the sharp decline in GDP this year

from sound growth rates over the past

several year, output is expected to begin

to recover in 2010 and 2011 albeit at

much lower rates than the pre-crisis. As

domestic demand is still expected to

remain subdued the recovery has to be

driven primarily by the export sector and

is conditional on improving indicators

abroad. The latest flash estimates of the

statistical institute indicated that GDP

decline has steepened to 5.8% y/y in

Q3. According to the latest official gov-

ernment projection, GDP will decline by

6.3% this year and 2% next year. In the

autumn economic forecast of the EU

Commission, GDP is projected to decline

by real 5.9% this year and by 1.1% next

year. The IMF and EBRD also expect

GDP to decline by about 6% or more

this year. Although we still deem these

forecasts slightly on the downside, in our

view GDP decline will exceed 5% this

year.

PRICES

A downward correction in consumer

prices began after inflation peaked at

15.3% in June last year. Annual average

inflation posted about 12% y/y in 2008.

In line with weakening demand, price

growth began to decelerate substantially

until a decline of 0.1% y/y was posted

in October. The deflationary move in

October was backed by the steepening

decline in food prices as compared to

one year earlier, and the weaker increas-

es in services and catering prices. At

the same time, the non-food inflation

accelerated in annual terms helped by

footwear and natural gas price hikes.

The EU harmonised inflation index

(HICP) accelerated slightly to 0.3% y/y

in October from 0.2% y/y in September,

rising by 0.2% during the month. The

government projects average HICP of

2.3% this year and end-of-period of

1.8%. Next year harmonised inflation is

expected at 2.2% (both average and

eop).

WAGES AND EMPLOYMENT

The most painful adjustment will take

place in the labour market where unem-

Domestic Economy Set For Recover y After Rapid Adjustment

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ployment is crawling up (by 1.6pps y/y

to a period-average of 6.7% in Q3,

according to ILO/Eurostat methodolo-

gies; and by 1.9pps y/y to 7.8% in Q3,

in terms of registrations with the labour

office). On the other hand, wage growth

began to decelerate to 11.4% y/y to a

monthly average of BGN 582.7 (EUR

297.9) from 15.4% y/y in Q2 and 16.2%

y/y in Q1, the growth of real wages

decelerated rather marginally to 10.3%

y/y. In response to the economic down-

turn, the growth rate of the public sector

nominal wages continued slowing quick-

ly to 8% y/y in Q3 from 16.9% y/y in Q2

and 19.4% y/y in Q1. The branches that

suffered the most were the financial

intermediation, the electricity production,

state services, the real estate business,

and the extraction industries. While the

labour market seems more resilient so

far this is due to state policies to sup-

port employment in the crisis as well as

to general lag associated with downward

wage rigidity. Firms also switched to

more flexible temporary employment

terms, part-time arrangements and

unpaid leaves among others. Unfavorable

effects on employment are expected to

become stronger next year. Looser

labour market conditions and a down-

ward wage adjustment are bound to

reduce labour costs and raise domestic

competitiveness.

EXTERNAL BALANCE

The most obvious and the most benefi-

cial correction took place in the current

account deficit which shrank to just

about 6.3% of GDP in Jan-Sep, com-

pared to 25.4% of GDP in 2008. The

deficit is projected to continue to decline

to about 8% in 2010 in line with faster

export growth on the back of a pick-up

in external demand. The current account

posted a surplus of EUR 24.3mn in

September for a third month in a row

after the deficit started to decline as of

December last year. All components but

the net current transfers contributed

positively to the improvement with the

major impact coming from the foreign

trade deficit contraction. The net current

transfers are still lower on annual basis

in the ytd readings but show consider-

able increase in September only. The

financial account turned positive in

September after accumulating deficits

in the previous two months but the sur-

plus was much lower on annual basis.

The inflows in September were gener-

ated by a reduction in the foreign assets

of the commercial banks and foreign

deposits increase. The overall balance

of payments turned positive at EUR

99.4mn in September after posting defi-

cits in the previous two months. Net FDI

declined dramatically in the first nine

months of the year, by 56% y/y to EUR

1bn. The net FDI covered the CA deficit

at 95.8% in Jan-Sep as compared to

91.3% in Jan-Aug and 81.6% a year ear-

lier due to the sharp improvement in the

CA balance.

PUBLIC FINANCES

The economic downturn has also pro-

duced a sharp decline in government

revenue. However, the comparatively

better fiscal position of the government

at the outset of the crisis with large

fiscal surpluses and sound fiscal

reserve positions, will make possible

the achievement of a balanced budget

this year. Balanced budget or small

deficits are also targeted for 2010 and

2011, which are largely attainable due

to the strong contractionary stance of

the new government and the resolve to

fight tax evasion practices. In addition,

the government has scored success in

restoring the flow of EU project financ-

ing including the pre-accession pro-

grammes. EU fund utilisation would be

instrumental especially during the crisis

period.

Finance ministry data shows that the

general budget posted a deficit of BGN

552.3mn (EUR 282.4mn) in Jan-Sep,

which is by 2.1%, or nearly BGN 11.2mn,

more as compared to the preliminary

announced results. The deficit reached

0.87% of the projected full-year GDP,

expanding by 0.12pps during the month

as compared to surpluses of 0.3% of

GDP in H1 and 7.5% of GDP in Jan-Sep

last year. Revenues contraction flattened

at 11.2% y/y in Jan-Sep. In CPI-deflated

terms budget revenues were by 14.3%

lower ytd as compared to the same

period of last year. Expenditures growth

slowed further to 20.2% y/y in Jan-Sep

from 21.9% y/y in Jan-Aug and the peak

of 24.6% y/y in H1. n

GDP breakdowns in constant prices (%, y/y)

2002 2003 2004 2005 2006 2007 2008 Q1/09 Q2/09 Q3/09

Agriculture 4.7 -2.3 2.3 -9.4 -1.0 -29.7 24.6 -4.8 -6.3 3.0

Industry 4.6 5.7 4.1 4.8 7.8 14.0 3.0 -12.4 -7.2 -10.0

Services 5.9 4.8 5.7 8.2 7.1 7.5 5.9 2.5 1.4 -5.7

GDP 4.5 5.0 6.6 6.2 6.3 6.2 6.0 -3.5 -4.9 -5.8

Consumption 4.2 5.9 5.4 5.3 7.3 4.9 3.9 -5.4 -3.7 -10.6

Investment* 8.5 13.9 13.5 23.3 14.7 21.7 20.4 -14.1 -16.3 -22.9

Exports 8.1 10.7 12.7 8.5 8.7 5.2 2.9 -17.4 -15.8 -13.2

Imports 5.1 16.4 14.6 13.1 14.0 9.9 4.9 -21.1 -24.3 -28.7

Source: Statistical Institute, preliminary data for 2007 and 2008

* Investment growth refers to fixed capital formation and does not include change in inventories

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A leader must be as well educated as Winston Churchill. Or not that much, but the he must be a believer – like Reagan. Or not to be a firm believer, but he must be different from the others – like Obama. Or not so different, but he must stand firmly on the ground as Helmut Kohl. As you can see, a leader may be any kind of a person. This fall, however, we learned what the President of the European Council may not be. He must not be popular, uncompromising, popular and favorite. The leader must not be liked by the media and must not represent a great nation; besides, the leader must not be strong or authoritative. And he must not be British.

Belgium’s Prime Minister Herman Van Rompuy matched all these requirements. He was quickly elected as the first ever President of the European Council in an informal race against Britain’s Tony Blair, Netherlands’ Jan Peter Balkenende and Luxemburg’s Jean-Claude Juncker. All we know about the win-ner is that he is a master of compromise and likes to write Haiku verses. We learned also that the post of the High Representative/Vice President of European Commission may be handed to a British. The role of the EU foreign minister in all but name was assumed by Catherine Ashton – that is,

Baroness Ashton of Upholland, in England.

Even the British media started asking: „Who’s that Catherine? Who’s that Herman?” The journalists have always failed to understand the discrete charm of the European Union. Neither Churchill, nor Reagan, nor Kohl, not even the favorite, Tony Blair, would qualify as leaders of united Europe. From the 1957 Rome founding agreement to the Lisbon Treaty, which was painfully enacted in late 2009, a real strong leader would stick out like a Haiku poet in Sofia’s Sin City night club.

Let us look at the Beginning. Great leaders such as Conrad Adenauer and Charles de Gaulle brought Germany and France together and encouraged the European idea. The European institutions, however, were created by

a bureaucrat, Jean Monnet,

together with a pastor-come-politician, Robert Schuman, the self-willed Belgian Paul-Henri Spaak and some other less-than-famous people. Besides, de Gaulle swallowed the Rome Treaty with some distaste. „He was against it, but then he

The Haiku President and Complexities of Europe

By Boyko Vassilev

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allowed himself to be convinced,” Simon Veil, the first woman ever to chair the European Parliament, told me.

Monnet, the architect of the European Coal and Steel Community and maybe the most genuine father of United Europe, never took any elected office. When I visited his estate in Houjarray, I was shown the forest where he walked for an hour or two every day thinking and generating ideas. A typical intellectual and bureaucrat, he was never a true leader in the

fundamental sense of this word. Perhaps he even thought that Europe did not need an elected leader (president, chairman, and leader) but rather something that could be called “an enlightened plot of the elites.”

Am I exaggerating? Then how should we interpret the following quote: „Europe's nations should be guided towards a super state without their people understanding what is happening. This can be accomplished by successive steps each disguised as having an economic purpose, but which will eventually and irreversibly lead to a [European] federation.”

This is how the Euro-skeptic British Conservative Adrian Hilton retells the vision of Jean Monnet – and this quote is often glued to the image of the bureaucrat-dreamer. It is said also that Monnet did say similar things (without, however, intending to mislead voters), or at least acted in this way without speak-ing too much.

The attitude of the said Winston Churchill is also quite interest-ing. In a speech delivered in Zurich in 1946 he spoke about the United European States; at that time, however, he had just

been removed from power. Churchill’s Euro-skepticism during the Second World War was consistent and unconditional. Churchill supported closer relations with the United States, and propped by his legacy Great Britain has emerged as one of the least willing members of United Europe. Margaret Thatcher transformed this unwillingness into politics, diplomacy – and pose. Blair may be grateful to Thatcher for creating the ideo-logical foundation for his career as prime minister of the United Kingdom, but – ironically – this very legacy ruined his chances to emerge as Europe’s top official.

The problem was not only in the fact that Blair is British, that he waged a war in Iraq and probably “sexed up” some secu-rity files. He is simply too strong a leader and the position of “President of the Council” is too small for him.

Europe is made up of small steps,

mutual compromises, slight tactical retreats and unavoidable offensives, during which one simply pretends to be absent-minded. You should try to charm, wink friendly, convince or simply break, 27 times in all. The display of genuine Brussels style oratory arts does not fit the voluble Blair. It intends saying a lot by as few words as possible, so that everybody would understand only what they would like to be told.

A Haiku here would do the trick. Let us borrow one from great Kerouac: „Snow in my shoe/ Abandoned/ Sparrow's nest.” This verse could make a brilliant statement if Poland decides to remain alone in a European discussion or Ireland

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votes again stop the European contract by a referendum. Obviously, Herman Van Rompuy has the potential to con-tribute to the European idea by his substantial experience in poetry.

Let us be frank: the Belgian prime minister accomplished a much more difficult job before being elected as the first President of the European Council – he saved Belgium. The country, which hosts the European institutions, was on its way to collapse, causing shock and horror. Flemish and Wallonian leftists, rightists and nationalists had reached a post-electoral impasse and changed two prime ministers within 12 months. An internet joke to offer Belgium for sale was starting to gain momentum, Van Rompuy solved the problem with tact, compromise and amenability. The poet-politician demonstrated a typically European quality – to be able to save the consensus at a time when all parties have reached to end of disgust. These qualities would be indis-pensable for Van Rompuy at the top position in the European Union.

Besides, the history of his post closely resembles the Belgian drama. First, there was draft European Constitution, which stumbled on the negative referendums in France and the Netherlands. Then, the Constitution was replaced by the compromise Lisbon Treaty, which also stumbled on the Irish “no.” At the end, this agreement was also touched up in order to achieve the current situation. According to its latest revision, the president of the European Council will be elect-ed for two years and a half, an incumbent president may be reelected for only one more mandate; besides, the president is elected by a qualified majority, and his prerogatives are basically symbolic. It may sound as paradox, but Baroness Catherine Ashton will have much more on to do than President Rompuy.

Henry Kissinger will be disappointed. He asked once: “Whom shall I call, when I want to talk to Europe?” The post of the president of the European Council was advertised exactly in this aspect: Now Europe will have a phone number; the newly elected Belgian said he is ready to take the first call. Well,

it will not be a single line but a switchboard

Kissinger will ring up Van Rompuy, who will pick up and say: “Oh, Henry! Glad to hear you! But the person you actually want to talk to is Nicola Sarcozy (or Silvio Berlusconi). What should I tell him?”

Let us be realists, this is not that bad. United Europe remains a complex, consensus-prone, sluggish – and entirely insane – mechanism. This is, however, a guarantee, that Europe will not be saddled by a tyrant or silently captured by a corporate or ideological interest. The charm of its “soft power” (as opposed to America’s “hard power”) has already started to generate followers. Some say that “the Americans are from Mars,” while the Europeans “are from Venus;” others describe Europe as Hellas and the United States as Rome; others still, like American Jeremy Rifkin directly claim the “the European age is coming.” Whole generations of West Europeans are coming into being attuned to the “soft” rather than the “hard” (and to

the “green” rather than the “red”) – and the world is becoming gentler and somehow more streamlined.

For states like Bulgaria (the small and medium sized EU members) the Van Rompuy news is good. The symbolic top European post was not given to large Great Britain or to dwarfish Luxemburg. The first makes Europe more accept-able for the “small,” while the second indicates that

the Union does matter.

Bulgaria must keep in mind a statement by right-of-centre Van Rompuy: "Turkey is not a part of Europe and will never be part of Europe." At the same time it must never forget that the incumbent President said these words as an opposition politi-cian five years ago. In other words, assuming different views while in power and while in opposition is obviously a European tradition – from Churchill on.

Never mind the details, we will have to get used to the fact that Bulgaria already has one more president. The person bearing a name, which is difficult for Bulgarians to pronounce, comes from an EU founding member state, no matter how patient he is, he will never tolerate any Balkan tricks. Here again, the glass is more half-full than half-empty. The Belgian Haiku-president will understand not only the smaller poetic forms, but also the problems of smaller countries – and, let us hope, will take care of their interests. Europe remains selfless … and complex.

Is that good? I am convinced that – yes, that is good. The most important promise made by Van Rompuy the intellectual, was that Europe will continue to be led by the “enlightened elites” and not by commercialized forces, populism and demagogu-ery. United Europe seems to be secretly aiming to avoid the direct choice, the referendum, and the national assembly. Thus, it creates mistrust; popular media grumbles against the “Brussels bureaucrats,” while people simply wait for their chance to exercise their right to a punitive “no” vote. When the Irish, Danes, Dutch or French manage to stop one agree-ment or other, the enlightened elites start talking about the “unenlightened people”. Finally, the voters correct themselves and next time they vote “properly.”

And why is that? Maybe because, above all, there is the per-ception that European integration is driven by the best among us. Thy, we say, may never be wrong. Time will show whether this is true, as cheap political analysts like to say. That is why we should be more explicit, at the end:

"Three waves roll Along the harbour The trio's home."

The author of this analysis is Herman Van Rompuy, the first president of the European Council. The verses are posted on his web site and refer to the so called “European trio” – and he means something different from what you think. He means the former, current and next presidency of the European Union

Now, everything should be finally clear, right? n

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Prior to leaving on an official visit to

the United States, Minister of Foreign

Affairs Rumiana Jeleva held a meeting

on Nov. 18 with the Board of Directors

of the American Chamber of

Commerce.

At the meeting the minister was

informed about the activities and the

current initiatives of the chamber. The

discussion focused on the future co-

operation between the ministry and the

chamber to promote further develop-

ment of the U.S.-Bulgarian economic

and trade relations.

AmCham representatives commented on

the pragmatic approach of the new gov-

ernment and the openness to engage in

a dialog with the business community

encouraging economic development and

investment in Bulgaria.

The Chamber was represented by

Anthony Hassiotis, president, board

members Tom Higgins and Peter

Lithgow, and Valentin Georgiev, execu-

tive director. n

Prime Minister Boyko Borissov held a

meeting on November 24 with the board

of Directors of the American Chamber

of Commerce. He was informed about

the activities and the current projects of

the Chamber as well as given a copy of

AmCham White Paper and

Recommendations to the Bulgarian

Government.

The discussion focused on the busi-

ness environment and the investment

climate in the country as well as how

the Chamber can assist the govern-

ment in developing the regulatory

framework for foreign investments.

AmCham offered help in promoting the

business opportunities Bulgaria pro-

vides for American companies by orga-

nizing trade and investment missions in

the United States and combining these

initiatives when possible with govern-

mental official visits to the United

States. AmCham representatives con-

gratulated the prime minister and the

new government about the open dialog

with the business community and the

pragmatic approach the government

took in solving many of the issues that

companies have been facing for a long

time. Boyko Borissov acknowledged the

Chamber for its work in attracting for-

eign investments and the engagement

in the process of creating business

regulatory framework based on princi-

ples of transparency and fair competi-

tion. AmCham was represented by

Anthony Hassiotis, president, Stefan

Ivanov and Tanya Kosseva-Boshova,

vice-presidents, and Valentin Georgiev,

executive director. n

Prime Minister Receives AmCham Board Members

Foreign Minister Meets Chamber Before U.S. Visit

From Left: AmCham Board members Tanya Kosseva-Boshova, ETC, Anthony Hassiotis, President of the BoD, Bulgaria’s prime minister Boyko Borissov, Stefan Ivanov, Citibank Sofia, and Valentin Georgiev, AmCham executive director.

AmCham BoD reps in the office of Minister of Foreign Affairs Rumiana Jeleva.

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Labor visas for non-EU nationals, devel-opment of the labor market, unemploy-ment and training vouchers were the hot topics discussed at the latest AmCham Human Resources Committee meeting on Nov. 25. Guest speakers were Krassimir Popov, deputy minister of labor and social policy, and Rositsa Stilianova, executive director of the National Employment Agency. More than 70 mem-ber companies took part in the discus-sion and inquired on various issues such as ways to ease procedures for employ-ment of U.S. citizens in the country, the difference between high- and low- quali-fied work force, and measures facilitating temporary employment.

In the words of the deputy minister, the government launched anti-crisis measures in order to protect the national labor mar-ket as close to 500,000 households have been affected by the unemployment rate. At the same time hiring of qualified work-ers from abroad is not considered as market problem but rather as a stimulating market factor, he added.

There is a deadline for adopting in the

Bulgarian legislation of the EU directive on the EU Blue Card until 2011, Popov said, adding that it takes time and con-sultations with the business associa-tions in order to create such legislation. The EU had been preparing the direc-tive for three years. Answering a ques-tion on the temporary employment Popov said there is a deadline for transmitting in the national legislation of three EU directives: on the tempo-rary employment, work from home and distance working.

About three months are needed in general for a foreigner to issue a working permit in Bulgaria, Stilianova said. There is an initial procedure of gathering the docu-ments that takes 30 days, and issuing a visa takes an additional 1.5 months. The Agency had acted on many cases in order to facilitate the visa issuing permits when there were hindrances, said Stilianova. According to Deputy Minister Popov, the training vouchers will be issued until Dec. 15, and will be distributed in the first two months of 2010. n

Government Officials Explain HR issues

Krassimir Popov, deputy minister of labour and social policy (second left) and Rositsa Stilianova, executive director of the NEA elaborated on HR and labour issues.

CEO-s of AmCham member companies and HR managers participated in the event.

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If you want to save the Planet from the devastating climate changes, you should start to make changes in your lifestyle. Especially in case you work from home, as bringing work home is not anymore a taboo. How one can have a green-er office and home? Some nice advice on the topic was provided by Ward Miller, denkstatt at the last AmCham CSR committee meeting on Dec. 1.

It is not regarded as sustainability notion anymore that the development meeting the needs of the present without com-prising the ability of future generation to meet their own needs, Ward Miller explained. What has to be considered in every human activity is the impact on environment, on soci-ety and on the economy. The environmentalists call it “triple bottom line”. The big challenges that the world is facing now are: current economic model, climate change, resource depletion, and biodiversity loss. That is why it is vital to reduce the energy resources by different activities: turning off the lights, TV-s and computers when we not use them.

In line with the EU regulations, it is necessary to use energy efficient light bulbs and to keep the office tempera-ture at 25 degrees in summer, and 22 degrees in winter in order to prevent the environment. Purchasing only class A, A+ and A++ energy rating electric appliances is also a necessity.

Peter Seizov with denkstatt presented some stunning envi-ronmental facts: in every 1 minute the deforestation on the planet is equal to the size of 36 football fields! In addition, we eat much more than the Earth provides, and for example 76% of the world fisheries have been fully exploited already!

To add to the spirit of green ideas the Association Integra welcomed the audience at their stand where one could buy

nice Christmas handicrafts and “fair trade” goods made by small producers from Bulgaria as well as from developing countries. Dessislava Chalamova with Integra told the audi-ence about the activities of the organization in several areas: human resource development, adult education qual-ity language teaching & learning, entrepreneurial education, training for SMEs, etc. Integra projects are supported by Citibank Sofia. Galina Tomova with Citibank elaborated on the ways the bank is helping Integra. n

Change Your Life to Save the Planet

AmCham member companies, among them Mobiltel, who participated in the Volunteer days were awarded with certificates of recognition.

Nice X-mas handicrafts of Association Integra that the guests could buy to sup-port the people in need. Company reps listening to the denkstatt presentations.

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Tax Seminar Explains U.S-Bulgarian Treat y

AmCham Public Affairs & Advocacy Committee and

PricewaterhouseCoopers Bulgaria co-sponsored a seminar

on the U.S.–Bulgarian Treaty for the Avoidance of Double

Taxation (TADT) on Nov. 17. The event focused on the pro-

cedures for implementation of the treaty. During the introduc-

tory session Maria Toromanova, director with

PricewaterhouseCoopers Bulgaria, presented a general over-

view of the Bulgarian tax system. She said that there is a

shift from direct to indirect taxes, and more VAT and excise

audits are introduced.

Krassimir Merdzhov, senior consultant with

PricewaterhouseCoopers Bulgaria, discussed in detail TADT

specifics. The treaty went into force on Jan. 1, 2009, and is

applied to direct taxes. It excludes indirect levies, such as

value-added and excises taxes, as well as all social contribu-

tions. TADT applies to all sources of income that residents of

either country have received "at source" in the other country.

TADT reduced the tax burden for residents of Bulgaria and the

United States, which should stimulate cross-border trade and

investment. The treaty followed the U.S. model tax conven-

tions.

Marieta Getcheva, senior consultant with

PricewaterhouseCoopers Bulgaria, elaborated on work permits,

residency requirements, taxation and social insurance of indi-

viduals covered by the treaty. She focused on the tax resi-

dency criteria, income from employment, directors’ fees and

social security, as well as the immigration regime for U.S. citi-

zens.

Tania Pavlova, senior manager with PricewaterhouseCoopers

Bulgaria, spoke on the Bulgarian VAT package that enters into

force as of January 1, 2010. The package will affect any busi-

nesses engaged in the cross-border supply of services, includ-

ing those making or receiving inter-company recharges. The

VAT package is going to impact the flow of services and recov-

ery of VAT incurred in another member state. It represents

series of measures designed to simplify VAT accounting for

businesses providing cross-border services. n

Maria Toromanova, director with PWC Bulgaria Around financial experts and 50 accountants took part in the discussion.

Krassimir Merdzhov, senior consultant with PWC Bulgaria.

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AmCham member companies enjoyed a business luncheon Nov. 18 with Frank Jackson, the mayor of the city of Cleveland, who was visiting Bulgaria. The mayor was accompanied by represen-tatives of the Greater Cleveland Partnership (GCP), an organiza-tion with 16,000 member companies, Small and Medium Enterprises Union, and other business organizations from Ohio.

Mayor Jackson hosted a press conference at the Sheraton Hotel in Sofia where he answered questions about the opportunities for cooperation in fields such as health care, technology, com-munications, renewable energy, scientific research, intellectual property rights protection, culture and education. Mayor Jackson told journalists that Bulgaria is attractive for U.S. investments because of its strategic geographic location and the business-friendly system of flat taxation. He also expressed confidence that this first visit to Bulgaria will help form a long-lasting friend-ship and open up opportunities for business partnerships both in Sofia and Cleveland.

“These are hard times both for America and Bulgaria. The purpose of our visit is to do business with you, and in our opin-ion it is worth founding partnerships here as we value very much the partnership with Bulgaria”, further said the mayor.

Some 62 percent of all foreign investment in Ohio come from Europe, the mayor said. The state features low business costs, good transport infrastructure and a favorable geographic loca-tion.

A number of large multinational corporations are based in Cleveland; the major sectors in the city are industrial production, financial services, health care services, and high technologies. Over the last few years, the GCP has been working for the mergers of smaller firms in order to bring about the creation of medium and larger entities generating greater income. n

Cleveland Mayor Outlines Business Oppor tunities

From Left: Peter Lithgow, AES Maritsa East-1, Anthony Hassiotis, AmCham President, and the Mayor of Cleveland Frank Jackson.

Susan Sutton, U.S. Charge d’Affaires and Mayor of Cleveland Frank Jackson.

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The quite popular Meet New Members party on Nov. 16 intro-duced five companies joining the AmCham family in the Sofia Hall of Grand Hotel Sofia. The guests were welcomed by Tanya Kosseva-Boshova, AmCham vice-president.

All Channels Communication/Fleishman-Hillard Associate is a group of agencies specialized in public relations and advertis-ing services, and is a leading PR consultancy, said CEO Alexander Dourchev. The company received awards for the best PR agency in Bulgaria in 2005 and 2007, as well as for a business super brand 2007-2008.

AIMS International Bulgaria is specialized in professional sup-port, advice and services in the field of congress & exhibition management, destination management and international meet-ing planning, said Rainer Kostka, the company’s founder.

Nana Serkedjieva, marketing manager of EKO Bulgaria, pre-sented the company’s network of 79 filling stations and four oil depots, operating all over Bulgaria and selling a wide range of high quality fuels and lubricants. The company offers to the

individual customers EKO Cards “Friends” – an attractive loy-alty program for all types of EKO fuel purchases. When paying cash with EKO Friends Card, you receive discount, Serkedjieva said.

The main activities of Etap Adress is to deal with domestic and international passenger road transport, said Nadezhda Bogdanova, manager for corporate sales. In addition the com-pany is active in food vouchers. It has concessions at the Black Sea cost (Kiten – Yug) and sells mineral water from the Barzia well, near Berkovitsa.

Power Machinery Business (PMB) is dealing with emergency power supply and offers complete engineering in the field, in the words of Antonia Getova, sales manager. PMB is the sole official distributor and service provider of the following compa-nies: GE Digital Energy, FG Wilson (Engineering) Ltd. (the United Kingdom), Hitec Power Protection B.V. (The Netherlands) – manufacturer of rotary UPS systems for supply of uninter-ruptible, continuous and conditioned power for critical applica-tions. n

Five New Members Presented

At least 80 members joined the party.

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Alexander Durchev, All Channels Communication.

Nadejda Bogdanova, Etap Address company.

Nana Serkedjieva, EKO Bulgaria.

Rainer Kostka, AIMS International Bulgaria.

Antonia Getova, PMB.

Dimitar Lazhov General Manager of the Greek Business Council and Miroslava Kostadinova, Cook Communications (second right) among guests.

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McDonald’s Bulgaria strode atop of the 2009 list of Best

Employers in Bulgaria among large-scale companies, while

drug maker AstraZeneca scooped up the gold for small

and medium-sized companies for a second year in a row.

The nationwide survey’s results were announced in

November.

The survey, carried out for a fourth consecutive year by human

resources specialists Hewitt Associates and Monday Insight,

studied the working conditions at companies with more than

50 full-time employees that have operated on the market for

at least two years. This year's poll was carried out among

13,176 employees as well as 353 top executives of 91 busi-

nesses.

Sodexo Bulgaria granted the “Employer with best social poli-

cies and practices” award to AstraZeneca to recognize the

company’s social policies. AstraZeneca is a leader in the cat-

egory for a second year in a row. Explaining the establishment

of that award Mr. Jean Istasse, General Manager of Sodexo

Bulgaria, said: “It was natural for us to choose exactly this

approach, because Sodexo’s services are aiming to improve

the quality of the employees’ life both on the working place

and outside the office.

McDonald's, AstraZeneca Crowned Best Employers in Bulgaria

All companies awarded in different categories in the Hewitt Associates survey.

Ivan Lissikov, General Manager of McDonald’s Bulgaria.

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Sasha Bezuhanova, Director Public

Sector HP Central and Eastern

Europe was awarded with the Order

of the Star of the Italian Solidarity

Nov. 26. His Excellency Mr. Stefano

Benazzo, the Ambassador of Italy in

Bulgaria gave to Mrs. Bezuhanova

the prestigious state award. Mrs.

Bezuhanova received the Oder for

her extraordinary contribution for the

development of the bilateral eco-

nomic relations.

“This is the smallest recognition for

the greatest achievements of Mrs.

Sasha Bezuhanova. I am confident

that the people we awarded during the

130 anniversary of the foundation of

the Bulgarian-Italian diplomatic rela-

tions really contributed to their devel-

opment”, stated His Excellency Mr.

Stefano Benazzo.

„I accept the award as a recognition

for my efforts and for the efforts of all

who work actively for the positioning of

Bulgaria as a respected and trusted

partner in Italy and the other European

countries”, said Mrs. Bezuhanova dur-

ing the ceremony.

The other two Bulgarians who were

awarded with the Order – the Director

of the National Opera Mr. Plamen

Kartalov and Acad. Bogdan Petrunov,

the Director of the National Centre for

Infectious and Parasitic Diseases, were

recognized for their contribution for the

development of the bilateral relations

in the areas of culture and science.

Mr. Boyko Borissov, Prime Minister of

the Republic of Bulgaria was awarded

with the title of Commander of the

Order of the Star of Italian Solidarity in

2006. n

Sasha Bezuhanova Was Awarded with the Order of the Star of the Italian Solidarity

McDonald’s Bulgaria is a socially responsible company

committed to addressing society issues. The company

supports many charity projects benefiting children.

“It is an important recognition and great responsibility for

us to take once more the lead in this prestigious study.

And I would like to thank to each and every employee for

the commitment and the efforts they show in their work.

Hewitt award comes in a very important step of the

development of McDonald’s in Bulgaria. In December this

year we celebrate 15 years from the opening of the first

McDonald’s restaurant in Bulgaria. I believe that this rec-

ognition represents a wonderful present for all of us in

the eve of our remarkable anniversary and we are all

very proud and gratified from this most high appraisal”

says Ivan Lissikov – Managing Director, McDonald’s

Bulgaria. n Zoya Paunova, AstraZeneca.

Sasha Bezuhanova awarded with the Order of the Star of the Italian Solidarity.

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PPD is a leading

global contract

research organization

providing discovery,

development and post-approval services as well as com-

pound partnering programs. Our clients and partners include

pharmaceutical, biotechnology, medical device, academic

and government organizations. With offices in 38 countries

and more than 10,000 professionals worldwide, PPD applies

innovative technologies, therapeutic expertise and a commit-

ment to quality to help its clients and partners maximize

returns on their R&D investments and accelerate the delivery

of safe and effective therapeutics to patients.

For more information, visit our Web site at http://www.ppdi.

com.

Contacts: Dana Leff Nedzielska

Tel.: ++359 2 9742790

Fax: ++359 2 9742791

E-mail: Dana.Niedzielska@ppdi.com

Address: Business Park Sofia, Building 5A, 1st floor

1766 Sofia

Eurobank EFG won the national award EMAS 2009 (Eco-

Management and Audit Scheme) for Greece, in the European

EMAS Awards, organized each year by the European

Commission. The aim of this institution is to highlight and

reward European companies that follow advanced environmen-

tal policies. It is the highest distinction in environmental man-

agement a European organization can obtain.

The competition theme for 2009 was the Supply Chain includ-

ing Green Procurement. Specifically, it examined the practices

applied by businesses on the management of the policy and

“green” profile of their procurement and their overall relation-

ships with their suppliers, to meet international standards on

green policies.

32 companies from 12 European Union countries participated

in the competition. These companies had been qualified by

the relevant official bodies of the countries in the national

competitions that preceded the European. The choice of

Eurobank to represent Greece was made by the Ministry of

Environment. Eurobank EFG is the only Greek bank registered

in the European Register of Businesses applying the EMAS

Regulation among the 69 EMAS certified organizations in all

sectors.

We would like to remind you that in September Postbank, a

member of Eurobank EFG Group, won the award for

“Ethical and responsible conduct towards stakeholders” in

the competition for Socially Responsible Company of the

Year, organized by “Pari” Daily with the cooperation of

Deloitte Bulgaria. Earlier this year the bank won first place

in the category “Investor in Environment” for its long-term

social responsibility campaign “Crystal Clear Pancharevo”

within the Sixth Annual Awards for Socially Responsible

Business organized by The Bulgarian Business Leaders

Forum (BBLF). n

Eurobank EFG Wins the Biggest European Award for Eco-Management

n e w m e m b e r s

AECOM is a global pro-

vider of professional tech-

nical and management

support services to a

broad range of markets, including transportation, facilities,

military, environmental, energy, water and government sup-

port services. With approximately 45,000 employees around

the world, AECOM is a leader in all of the key markets that

it serves. The company opened the office in Bulgaria the

end of 2006. Since then we have developed several major

projects for different government bodies and private compa-

nies.

Currently we are developing the General Transport Master

Plan for the Ministry of Transport, Information Technologies

and Communications.

The main objective of the project is to provide a long

term strategy for development of the transport sector, to

create a detailed transport model, which will provide the

necessary information and justification for any bids for

funding. For the Ministry of Regional Development and

Public Works we are designing the Water supply network

of Plovdiv town from Vacha Cascade. After the construc-

tion of the Vucha supply network 22 settlements, will be

provided with pure water.

Contacts: Peter Klissarov

Director Shared Services

Tel.: +359 2 981 0003

Fax: +359 2 981 3309

Web: http://www.aecom.com

E-mail: peter.klissarov@aecom.com

Address: 14, Tsar Osvoboditel Blvd.

1000 Sofia