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

i s s u e 9 2s e p t e m b e r 2 0 0 8

Business Goes Green

AmCham News:AmCham Board meets Ambassador Nancy McEldowney

U.S. – Bulgarian Treat y on Avoidance of Double Taxation Update

Alan Lev y Appointed as Bulgaria’s Honorar y Consul in the US

Analysis:Waiting for Elections

European Commission Shows Red to Bulgaria

Georgia: The Holiday War

The AmCham and Its Members Environment Saving Initiatives

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e d i t o r i a l

Dear Members and Friends,

Welcome back from the summer holidays! I hope you had enough time

to enjoy your vacation and simultaneously recharge your sources of

inner energy for the upcoming challenges of your business.

It was a truly emotional summer. For Bulgaria, it came with the

European Commission’s report on the progress of the country and the

suspension of a total of 825 million Euro from the pre-accession funds

due to poor results in the fight against corruption and organized crime.

A day after the official announcement of the report, Bulgarian farmers

went on massive protests claiming that there would be numerous bank-

ruptcies among them without the European subsidies. The government

efforts to deal with the situation were aimed at negotiations with the

EC in order to allow the allocation of subsidies from the state budget

to the farmers. This, however, created another puzzle whether such financial help might be

regarded as a state aid and therefore the country could face EC fines. On top of that, the ambi-

tions of the opposition to force early elections were revived by the situation, so several right-wing

parties started joint actions in achieving this goal.

Elections were also in the focus of U.S. politics because of the conventions of the Republicans

and the Democrats, which nominated officially the presidential candidates. We now have John

McCain-Sarah Palin pitted against Barack Obama-Joe Biden – and the most interesting part of

the presidential race is ahead of us. And while the convention of the Democrats went pretty

smoothly, the Republicans suspended their activities on the first day because of the impending

Hurricane Gustav.

August stormy weather in that part of the world caused severe devastation and hundreds of

victims, while another event posed a threat on the international relations. Georgian-Russian war

gave many analysts the reason to describe it as the beginning of a long-term confrontation

between Russia and the West, which would be the worst scenario not only for the region but for

the world.

But August was also full of hope. “One World One Dream” – the Olympic Games in Beijing

brought celebration and optimism. Along with the number of sports records of the athletes, the

games were the perfect demonstration of the common wishes of people all over the world inspired

by the Olympic ideals to strive for a brighter future for the mankind.

And August held a very special occasion for us in AmCham as the new U.S. Ambassador Nancy

McEldowney started her work in Bulgaria. We were extremely pleased to welcome her, and want

to assure the ambassador and her team that AmCham Bulgaria will remain a reliable partner to

the U.S. Embassy in our mutual efforts to develop the U.S.-Bulgarian friendship even further.

Best regards,

Valentin Georgiev

Executive Director

c o n t e n t s

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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 9 2s e p t e m b e r 2 0 0 8

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.

CPM MEMBERSHIPS

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a m c h a m b u l g a r i a

3M (East) AG . AA KRES EOOD . ABB Bulgaria EOOD . Abbott Laboratories S.A. . AbCRO - Bulgaria . Accor Services Bulgaria . ACO Building Elements Ltd. . ACSIOR Ltd. . ADIS Ltd. . Advance International Transport (Balkan) EAD . AES Corporation . AFA OOD . AIG Bulgaria Insurance & Reinsurance Company EAD . AIG Life Bulgaria . AIMS Human Capital . Alcoa Packaging Bulgaria . Alexander Hughes Bulgaria OOD . ALEXANDROV GROUP CORPORATION . Alfred C.Toepfer International . Alliance One Tobacco Bulgaria . Allied Pickfords Bulgaria . Alter Ego Company OOD . 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 . APIS - BULGARIA Ltd. . APOLO Ltd. . Aries Commerce . Ashtrom International Ltd. . Association Integra-BDS . Astra Zeneca UK Ltd. . Astral Holidays AD . AT Engineering 2000 Ltd. . Auditing Company Versi and Partners Ltd. . AVON Cosmetics Bulgaria Ltd. . BAE Systems International Ltd. . Balkan Accession Fund . Balkan News Corporation Plc. . Balkan Star Automotive EOOD . Baxter AG . Bayer Bulgaria EOOD . BC Serdon . Berlitz Schools of Languages . BG Radio . BMG Ltd. . Bodyguard-Fire-K Ltd. . Borislav Boyanov & Co. . Braykov's Legal Office . British American Tobacco . Brown Forman Beverages Worldwide Sofia Branch LLC . Bulgaria Platinum Group EAD . Bulgarian American Enterprise Fund . Bulgarian Charities Aid Foundation (BCAF) . Bulgarian Land Development EAD . Bulgarian Telecommunications Company AD . Bulgarian VIP Travel . Business Media Group . Business Park Sofia EOOD . CallPoint New Europe AD . Candole Partners EOOD . Car Rental Bulgaria Ltd. . Carlsberg Bulgaria AD . Cefin Bulgaria EOOD (IVECO dealer) . Center for the Study of Democracy . CENTURY 21 Bulgaria . Chelopech Mining EAD . Chris Thompson, Independent Consultant . Cisco Systems Bulgaria . Citibank N.A.- Sofia Branch . City University of Seattle . Cleves EOOD . CMS Cameron McKenna EOOD . Coca-Cola HBC Bulgaria AD . Coface Bulgaria Credit Management Services EOOD . Colgate-Palmolive Adria . COLLIERS International . ConsulTeam Recruitment and Selection Ltd. . Cook Communications . Corstjens Worlwide Movers Group . CPM Consultancy Sllc . Curtis / Balkan Ltd. . D&IC (Dun and Bradstreet Representative) . DeConi International . Deloitte Bulgaria OOD . DENIMAR Ltd. . Devin AD . DHL Express Bulgaria Ltd. . Diageo Bulgaria Ltd . Diamed Ltd. . Dimitrov, Petrov & Co. . Djingov, Gouginski, Kyutchukov, & Velichkov . DLA Piper Weiss-Tessbach Branch Sofia . 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 de Nemours International S.A. . DynCorp International LLC . Economedia AD . Effekten Und Finanz - Sofia AD . Ekotoi - Service Ltd. . Electron Progress EAD . Eli Lilly and Company . Elido (Lamel Ltd.) . Elmec Sport Bulgaria EOOD . Elta consult AD associated partner of CB Richard Ellis for Bulgaria . Emerson Process Management AG . Emporiki Bank Bulgaria EAD . Encouragement Bank AD . Enel Maritza East 3 AD . Enemona SA . Engineeringservice Sofia Ltd. . Environmental Quality Management, Inc. . Epsilon Interactive International . Equest EAD . ERATO HOLDING Plc . Ernst & Young Bulgaria . European Bank for Reconstruction and Development (EBRD) . Faustina Group Ltd. . Flying Cargo Bulgaria Ltd. - Licensee of FedEx . Force Delta Ltd. . Forem Consulting Bulgaria . 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 . General Security ltd. . Genmark Automation Bulgaria Plc. . GlaxoSmithKline . Global Benefits Group GBGI CEE LLC Representrative Office . Goodyear Dunlop Tires Romania . Grand Hotel Sofia . Grenville Bulgaria . Grey Worldwide Bulgaria EOOD . Hewlett-Packard Bulgaria Ltd. . Hild Group . Hilton Sofia . Holiday Inn Sofia . Honeywell EOOD . Hotel Yastrebets Wellness & SPA . IBM Bulgaria . IBS Bulgaria Ltd. . Ideal Standard Bulgaria . Immo Industry Bulgaria . In Time Ltd. . Industrial Holding Bulgaria . ING Bank Sofia Branch . Interbrands Marketing & Distribution Inc. OOD . Interdean . International University College . Investbank Plc. . IP Consulting Ltd. . ISI Emerging Markets (Internet Securities, Inc.) . Johnson & Johnson Doo. . Johnson Controls Electronics Bulgaria . Junior Achievement Bulgaria . Kaliakra AD . Kamenitza AD . Kamor Auto EOOD . Katilin Popov Enforcement Officers . Kempinski Hotel Grand Arena Bansko . Kimimpex Trade and Leasing Ltd. (2be) . Kolbis International Transfer Corporation . KPMG Bulgaria . Kraft Foods Bulgaria . LANDMARK Property Bulgaria . Lexim Sofia Ltd. . Lindner Immobilien Management EOOD . Lirex BG Ltd. . Lowe Swing Communications . M & M Air Cargo Service Bulgaria Ltd. . M3 Communications Group, Inc. A Hill & Knowlton Associate . Magnetic Head Technologies . Maria Vranovska, MD, MBA . Marsh EOOD . MARTERN EOOD . Mathnasium (Rossimat Ltd.) . MBL Ltd. . McDonald's Bulgaria Ltd. . Mellon Bulgaria EAD . Merck Sharp & Dohme Bulgaria . Mercurius-Sofia . Microsoft Bulgaria . Miltech Ltd. . Mmd, Corporate, Public Affairs & Public Relations Consultants . Mobiltel EAD . Monbat Plc. . Moody International Ltd. . Moten Sport . Moto-Pfohe Ltd. . Motorola Bulgaria EAD . National DISTRIBUTORS . NATO Defense College Anciens' Association . NDT Equipment Supplies Ltd. . Neochimiki Bulgaria S.A. . Neterra Communications . Neumann International AG . New Europe Corporate Advisory . New Europe Directories Bulgaria . Nexcom Bulgaria EAD . On Bulgaria Ltd. . Opet/Aygaz Bulgaria EAD . Oracle East Central Europe Limited - Branch Bulgaria . Orbit Ltd. . Orkikem Ltd. . OSG Records Management . Outsource Partners International . Ozone Laboratories Bulgaria . PANDA - IP Ltd. . Penev & Partners Law Offices . Penkov, Markov & Partners OOD . Pfizer Luxembourg SARL, Representation Office Bulgaria . Philip Morris Bulgaria EOOD . Pioneer Semena Bulgaria EOOD . Piraeus Bank Bulgaria AD . Plesio Computers Jsc . Popov Legal Office . Postbank (Eurobank EFG Bulgaria AD) . PostPath . Praktiker EOOD . Pratt & Whitney . PricewaterhouseCoopers . Procter & Gamble Bulgaria . ProSoft . PSG Payroll Services Ltd. . Radisson SAS Grand Hotel . Reader's Digest EOOD . Regus Bulgaria Ltd. . Renault Nissan Bulgaria SRL . Rising Force Co., Ltd. . Rockwell/Intelpack . S&T Bulgaria . Sanofi - Aventis Bulgaria EOOD . Scandinavia Motors Ltd. . Schenker EOOD . Schering - Plough Central East - Bulgaria . SEAF Management Bulgaria EOOD . Sheraton Sofia Hotel Balkan . Sherita M Ltd. . Siemens EOOD . Sienit Ltd. . SigmaBleyzer Investment Group LLC - Representative Office . SKE Bulgaria EOOD . Sofstroy AD . Soravia Bulgaria Ltd. . Stanton Chase International Bulgaria . Stefan Dimitrov, Norman Realestate Co. Ltd. . Symix Bulgaria OOD . TechnoLogica EOOD . TeleLink EAD . The Coca-Cola Company Bulgaria . Tishman Management Company Ltd. . Tissue Bank Osteocenter Bulgaria EAD . TMF . Totema Engineering . Trans Company Ltd. . TravelStoreMaker.com . Tumbleweed ® Communications Corporation 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 . VM Finance Group . VSK Kentavar Ltd. . Welcome to Bulgaria . Westinghouse Energy Systems Bulgaria Branch . World Courier Bulgaria . 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. Borislav Boyanov Borislav Boyanov & Co.

Vice President Mr. Anthony Hassiotis Bulgarian PostBank

Vice President Mr. Kenneth M. Lefkowitz New Europe Corporate Advisory

Treasurer Tanya Kosseva-Boshova Landmark Property Bulgaria

Members Mr. George Georgiev Motorola Bulgaria

Mr. Thomas Higgins Balkan Accession Fund

Mr. Andon Ichev General Electric

Mr. Stefan Ivanov Citibank N.A.

Mr. Bernard Moscheni BTC

Ms. Dana Leff AbCRO Bulgaria

Mr. Chris Thompson Consultant

Ms. Elitsa Tsaneva Ideal Standard Bulgaria

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

Executive Director Valentin Georgiev

Contentsg o g r e e nSmart Office Behavior Helps Save Energy ................. 4By VM Finance Group

The Initiatives of Kamenitza AD in 2007 to Present .................................................. 6

600 Million Liters of Water Prevented From Polluting ......................................... 8

10 Windows Vista = 1 Car off the Road ...................10

Corporate Social Responsibility at PricewaterhouseCoopers .........................................10

ING Bank Sofia Branch’s Contribution .....................11

Dobrev, Kinkin and Lyutskanov’s Office Green Initiatives ..............................................................11

Orbit Ltd. Practice .................................................11

UniCredit Bulbank restores two main touristic paths in Vitosha ........................11

Fighting Environmental Waste at Work .....................12

a m c h a m n e w sAmCham Board meets Ambassador Nancy McEldowney .............................14

a m c h a m i n t e r v i e wI Am Impressed by Your Energy and the Quality of AmCham Membership .................16

a m c h a m n e w sU.S. – Bulgarian Treaty on Avoidance of Double Taxation Update .........................................17

Regional Actions Needed to Resolve Global Energy Challenges .......................................18By Runa Hellinga

Alan Levy Appointed as Bulgaria’s Honorary Consul in the US .....................................22

p o l i t i c sWaiting for Elections ..............................................24By Marina Georgieva

a n a l y s i sEuropean Commission Shows Red to Bulgaria ..........28

Fuel Distribution Market .........................................34

Georgia: The Holiday War ......................................36By Boyko Vassilev

Bulgarian and U.S. Military “Fight” Terrorist Near Novo Selo .............................40By Panayot Angarev

m e m b e r n e w sEBRD Intensifies Support for Bulgarian SMEs ..........42

Bulgarian, U.S. students tutor orphans ....................42

John Mystakidis to Lead Ernst & Young’s Bulgaria Practice ...........................43

Coface Bulgaria Offers Free Business Search Service .................................43

s p o r tTeam Sofia Means Business in the Fledgling American Football League ...............44By Tom Sadowski

A Player’s Perspective – Part One ...........................45By Anton Doykov

n e w m e m b e r s ..............................................46Bulgarian VIP Travel

Hild Group

Faustina Group Ltd.

m u s i c

Guitar Alchemy: Yngwie Johann Malmsteen .............47

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Some 40 percent of overall energy consumption in Europe is attributed to buildings, with most of it used by offices. This situation can be easily improved by teaching those working in office buildings how to save energy without compromising on their com-fort. Studies indicate that office work-ers in general are interested in saving energy but they do not think this depends on them. Major economy in terms of energy consumption at office building may be achieved by providing correct information, means and options to assume control.

Energy efficiency. Myths and erroneous assump-tions

Many of us are prone to erroneous assumptions about the closed micro-climate in buildings, and this has a negative impact on energy consump-tion. A study conducted by EBOB*-project indicated that the erroneous assumptions about comfort in a closed micro-climate are actually widely spread. Here we shall list some of the most popular myths, which we have to

overcome in order to save on energy.

Close to 30 percent of the respon-dents think that the temperature within a building must be maintained at a constant level regardless of other fac-tors, for instance the season of the year. According to many of the respon-dents the suitable temperature must be between 18°C and 20 °C, no mat-ter that in summer this temperature would seem unpleasantly cool. Studies indicate that people feel much better at an interior temperature between 21°C and 23°C.

Smar t Office Behavior Helps Save Energy

By VM Finance Group

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Another 40 percent of the respon-dents consider that the temperature inside must be higher than in summer, although truth shows exactly the oppo-site. The recommended temperature setting in buildings according to ISO 7730 must be within 20°C and 24°C in winter and between 23°C and 26°C in summer. In summer people are dressed lightly and are accustomed to higher external temperatures, hence they may live with a higher temperature inside. Besides creating a more com-fortable micro-climate, this often leads to economy of the energy consumed by the powerful air-conditioning instal-lations. Windows are often left open at office buildings. This is – at least partly – due to another set of errone-ous assumptions. Many people for instance think that the quality of the outside air is better than the inside air circulated through the ventilations sys-tems. In practical terms, the quality of the outside air is often much worse that the quality of the filtered air cir-culated inside the building.

Another myth says that bad air con-tains less oxygen or too much carbon dioxide. These are factors, which human organism cannot detect unless in extreme situations. Opening win-dows does not result in any energy economy as it affects the performance of ventilation systems, besides more often than not it is simply superfluous. Windows are usually opened, for instance, when people think that the inside temperature is too high – and this could be valid for both winter and

summer. This means simply that peo-ple are inclined to think that the out-side temperature is always lower than the inside. A better management of heating and air conditioning installa-tions may eliminate such erroneous behaviour.

One more erroneous assumption relates to the use of electric lighting. It is generally assumed that switching on and off of the lighting when enter-ing and leaving some premises would result in a higher energy consumption compared to having the lights on at all times. The truth spells exactly the opposite. And although people usu-ally switch the lights off when leaving the premises (some 65 percent of all people do that), the lights are still left on during daytime in some types of premises like conference halls and coffee bars. It would be better to use an automated lights system in order to improve this situation.

Many computers are left on unneces-sarily, while the inbuilt energy saving options are only rarely used to their full capacity. Although it may have been true that switching computers on and off resulted in a higher power consumption, this is not so any more.

The power of the good user interface

Most of energy wasting practices can be eliminated by using a good user interface for managing the interior

climate in office buildings. The energy saving functions of internal controllers and the feedback about completed operations are an important factor, which should help overcoming the inertia that using controllers is a diffi-cult task.

The access to funds, the correct infor-mation, the easy management and the opportunity to be engaged in making decisions related to saving energy may serve as incentives for people working in office buildings to save on power consumption.

TAC is constantly engaged in efforts to improve the user interface for control and management of interior micro-cli-mate. We can reduce energy con-sumption in office buildings in Europe by 5 percent only by overcoming the generally erroneous assumptions regarding energy related behaviour as well as by designing of an intuitive interface directing the user in the proper direction. If we assume that office buildings account for 50 percent of the energy consumed by all build-ings in general, this 5-percent reduc-tion would amount to the economy of 38,000 GWh per year, which is equiva-lent to the output of 6 nuclear reac-tors. n

* EBOB is an EU project, in which TAC participated between 2001 and 2004. The project objective is to popularize an energy efficient behaviour in office buildings

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1. Message to the consumers

Since the beginning of 2007 the com-pany is labeling all of its plastic, canned, glass pack for single usage with a special sign and a text: “Kamenitza AD: For separate collection

of wrapping waste. For a cleaner Bulgaria.” In addition the company puts the same labeling and sign at the advertisement banners which are more than 800 000 annually where this mes-sage is put. The firm believes that the consumers and the fens of Kamenitza’s

products will reflect on the message.

2. Plant a grove

In October 2007 volunteers from the head and trade offices of Kamenitza, together with their families, planted 1400 spruce seedlings on the territory of around 1.23 acres on Vitosha Mountain.

3. Separate garbage collection at the offices of Kamenitza AD and in the breweries.

In every office of Kamenitza trashes are available for separate collection of dif-ferent materials. There are ongoing trainings with the staff and employees regarding the separate collection.

4. Limited paper printing.

Printing is made on both sides of the paper, and the staff is encouraged to print only official documents that are to be signed. Repeated usage of enve-lopes is encouraged when sending internal mailing from one to another office of the company. n

g o g r e e n

The Initiatives of Kamenitza AD in 2007 to Present

Environmental issues are taken more

seriously by IT experts than by any

other experts within the corporate

world. More than 40 percent of the

CEOs in Europe are criticizing the

environmental policies of their employ-

ers – reports recent research con-

ducted in the United Kingdom, France,

Italy, Spain, Austria and the Netherlands.

One of the conclusions of the survey

is that the IT experts knowledge,

understanding and personal aspira-

tions should be used when building the

green initiatives of the company.

Tumbleweed’s team in Bulgaria is into

environmental lifestyle no less than our

colleagues around the world. Cycling

to work is one of the initiatives that are

characteristic for our approach to city

life and more than 15 percent of our

employees use this means of travel to

the office. One of the obstacles

though is that not all buildings in the

Mladost Business Park have stands for

bicycle parking. Our appeal to the

management of the complex is that

every modern facility should encour-

age its tenants and guests to be more

environmentally responsible and should

build the necessary facilities for that.

Paperless office is the other direc-

tion of our team attempts. Our aver-

age consumption would be 120 kg

per month if we were to print all

materials that we use. This is being

reduced to 30 kg now as we encour-

age – online storing. It is important to

note though that the quality of the

monitors used in this case should be

high enough to allow constant on-

screen reading without risk for our

employees’ comfort. The minimum

monitor resolution / frequency that

we recommend if you decide to go

for paperless office is 75 Hz and

1280/1024 pixel resolution.

We shall keep increasing our green

initiatives portfolio but another thing

that provides us with a green “feel

good” factor is that our business prod-

uct is helping companies reduce

excessive energy use through man-

aged file transfer, e-mail security and

spam protection. n

“I want to ride my bicycle, I want to ride my bike”

Volunteers from the head and trade offices of Kamenitza Ad during their planting initiative in Vitosha mountain

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600 000 liters of water are polluted by a single phone battery dumped in the environment – this is 1/3 of the capac-ity of an Olympic-size pool but you can cast any remorse away since the leading mobile technology and servic-es retail chain of stores 2be has found a solution.

It has handed over more than 1000 cellular phones of various brands for recycling through its campaign “Old for new” – unique of its kind in Bulgaria. This significant amount of phones is brought back by 2be’s clients only in the first 6 months of this year. Most of them took advantage of the opportu-nity to hand over the old phone and buy a new one at a discounted price, while approximately 5% of the custom-ers have simply decided to bring back old phones for recycling without buying new ones.

The company is not focusing on the commercial side of the initiative since for us it is more important to educate our customers of the opportunity to be environmentally responsible. 2be chain offers this opportunity since the begin-ning of 2007 and so far is the only company on the market to offer such a handy link between once personal green needs and habits and the objec-tive needs of the modern lifestyle.

Few people realize that after handing over the cellular phone for recycling, the battery can be decomposed safely for the nature and the plastic, metal and chemical parts can be re-utilized. Great part of the ingredients of the cellular phone components are com-prised in the list of toxins of long last-ing accumulation in nature made by the US Environment Protection Agency (EPA). There are small quantities of gold, silver, platinum, lithium, iodine, nickel, metal and plastic mixture in every cellular phone battery. These are substances, with a semi-brake up period several times longer than the human life. Other harmful substances which can also be found in cellular phones or accessories are arsenic, cadmium, antimony, cobalt, cuprum,

plumb, beryllium and zinc.

We are all aware that the toxins of long lasting accumulation in nature sooner or later get into animals’ and people’s tissues through water and food. The poisonous chemicals or metal sub-stances in cellular phones cause long lasting damages to the environment by seeping into soil and subterranean waters. Gradually concentrating, they create a huge threat and increase the risk of disturbances of the neurotic system, reproductive abilities, cancer and genetic mutations in humans, ani-mals and the rest of living creatures on the planet.

By November 2007, the total number of mobile phone subscriptions in the world had reached 3.3 billion, or half of the human population. In Europe one in three people possesses a cel-lular phone and changes it every 18 months. Only 5% of these old phones are recycled. If all unused phones would be put in a straight line, they would cover the route from Bulgaria to Australia, and the approximate weight of the unused phones only in Great Britain equals to 30 aircrafts Boeing 747.

2be is taking this initiative because recycling is the only way discovered

so far to help nature and to spare natural resources. If, for example, old cellular phones were to be burned, other toxic and polluting substances, also responsible for the global warm-ing would be liberated in the atmo-sphere.

“Numbers are impressive and show how little it takes to make a big posi-tive impact on the environment. The ‘Old for new’ initiative is in line with the company’s concept of environmental protection. Recent surveys of leading brands report that consumers are not aware of the opportunity to recycle their old phones. Our statistics also show that if we make the effort to educate our clients and encourage them to assume a responsible attitude towards nature, slowly but certainly they will join the initiative for cellular phones recycling. In this way we make Bulgaria part of the global effort for environmental protection. I want to thank all our customers who joined the ‘Old for new’ initiative and appeal to mobile technology consumers to lead lives which do not harm nature.” – comments Stanislava Arnaudova, executive director of 2be and adds with a smile “Well, we haven’t yet cov-ered the route to Australia but we are determined to go on and this is our first green mile.” n

600 Million Liters of Water Prevented From Polluting

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The core values of PricewaterhouseCoopers are Excellence,

Teamwork and Leadership but they don’t just apply to our work

with clients. At PwC we recognise that we have a much wider

responsibility to our people, the environment and to the com-

munities in which we work. We are working hard to manage

our Corporate Social Responsibility footprint, to improve our

performance and to integrate Corporate Social Responsibility

into everything we do.

Below are some of the measures we take in PwC Bulgaria to

reduce the impact on environment:

Paper useDouble-sided printing for internal use

Over the past years we have promoted the reduction of the

use of paper through initiatives including deployment of multi-

function devices and setting printers and copiers by default to

double-sided printing.

100-percent recycled paper for internal use

We have recently deployed fully recycled paper for all our in

house printing and copying.

Recycling and waste managementRecycling bins - separate bins for collecting paper and plastic

waste have been placed in each department. Approximately 20

kg of paper are collected for recycling each working day.

We use mugs and glasses instead of disposable plastic

cups.

Energy management95 percent of our lightning consists of luminescent lamps.

TransportThere are employees who walk or bike to the office or use the

tram. n

To most people, it is common sense that leaving a light bulb on all the time is a waste of energy. However, many organi-zations do exactly that with their PCs. To make machines available for software installs, patching, and remote access, many organizations instruct their employ-ees not to turn off their machines at night. Usually, these machines are sitting idle and consuming power, without pro-ducing any useful work.

For example, imagine a 100-watt (W) light bulb powered on 24 hours (h) a day,

7 days a week. A single day’s worth of continuous usage would result in a con-sumption of 2,400 watt-hours (Wh) or 2.40 kilowatt-hours (kWh), that is, 24 h x 100 W = 2,400 Wh.

Windows Vista is Microsoft’s most ener-gy-efficient operating system to date. Enterprise IT staffs are very aware of the energy costs for operating PCs and the associated heating, ventilation, and air-conditioning (HVAC) required. As organi-zations are determining when they should upgrade, the potential for significant total-

cost-of-ownership (TCO) savings is a compelling reason for deploying Windows Vista. Energy costs are part of TCO for IT departments. With concerns about global warming, energy shortages, and potential oil crises, an energy-efficient operating system is one way in which Microsoft demonstrates that it is remem-bering environmental factors as it deliv-ers the next operating system.

To date, PC users have had few options for how to conserve energy when using their PCs. This applies both to while they are using the PC and while they are not.

Energy conserving features of Vista are affiliated with the centralized manage-ability for IT professionals, default set-tings optimized for best user experience and energy savings. Regarding perfor-mance there is an immediate responsive-ness to sleep or resume, reliability – improved idle detection, hybrid sleeps.

Each PC using Windows Vista prevents the release of half ton of greenhouse gas annually. 10 PC-s left on when in use results in the equivalent of 1 more car on the road in terms of greenhouse gas contribution annually. 1 PC with the soft-ware saves 760.14 kWh annually. Financial aspect is that the annual savings are between 96 and 122 leva. n

Corporate Social Responsibility at PricewaterhouseCoopers

10 Windows Vista = 1 Car off the Road

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For ING, being a responsible company not only compliments the bank’s long-term business objectives but it also helps to define the strategy and identity the way the institution does its busi-ness.

ING Bank Sofia Branch has purchased 2 containers from Eco Recycle Co in which paper for recycling is collected.

Recycled paper for 2007 (measured) was – 7,300 kg.

Four of our colleagues (Assen Assenov, Branimir Braykov, Velislav Bojilov and Yavor Dojdevski) are coming to work by bike. And quite a number of colleagues walk to work, so about 10% of ING Bank Sofia Branch employees Go Green to work (by bike or walking).

ING world-wide to which ING Bank Sofia Branch also adheres to:

ING has a special Environmental and Social Risk (ESR) Desk that is evaluating whether each our transaction is compliant with ESR policies.

ING is also a signatory of the Equator Principles (http://www.equator-principles.com/index.shtml), a benchmark for the financial industry to manage social and environmental issues in project financing. n

Dobrev, Kinkin and Lyutskanov’s Office Green InitiativesDefault double side printing set on computers and applied;

Default feeding set up in printers for using recycled paper as

the first choice and its application;

Using E-documentation and Distribution of electronic rather

than printed documents;

Installation of the energy-saving (move-sensitive) bulbs/lights;

Recycling of prints and fax cartridges;

Boxes for paper recycling placed in each office;

Regular collecting of the paper for recycling from the offices’

boxes;

Installation of the “Power Save” feature on all electronics;

Promoting the green initiative through the outgoing e-mails’

signature: Please consider the environment before printing this

e-mail. n

Orbit Ltd. PracticeSeparate collection of paper for recycling

All packing materials purchased are 100% from recycled

paper

Reuse of old packing materials whenever possible and with

Customer consent for dunnage/stuffing

Maintenance of company vehicles only at authorized dealers

Turning off of electronic equipment at night whenever appropri-

ate

Use of environmentally friendly cleaning materials

Encourage use of mugs instead of plastic cups at office n

UniCredit Bulbank restores two main touristic paths in Vitosha UniCredit Bulbank starts a unique green project with

the National Park Vitosha Management Office. The

project includes the restoration of two main touristic

paths in the mountain – from Aleko to Bistritsa next

to Yanchovska and next to Bistrishka rivers.

The restoration includes repairing and re-building

bridges, cleaning from fallen trees, new touristic

signs, reconstruction of benches, tables, fountains,

etc. This way because of UniCredit Bulbank more

than 30 km of touristic paths in the mountain will

become safe and pleasant place for rest and walk-

ing.

The project is financed by UniCredit Bulbank and is

a stage from the National Green Campaign that

UniCredit Bulbank launches as part of the plan for

Corporare Social Responsibility of the bank. According

to the agreement between Vitosha Park and UniCredit

Bulbank the restoration should be completed by

December 2008. n

ING Bank Sofia Branch’s Contribution

As many other AmCham members, on May 17 2008 ING was involved in the AmCham Volunteer Day for cleaning, forestation, gardening activities in Sofia and in Vitosha Mountain.

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A detailed study into the attitudes, conventions, and habits of the workforce towards environmental issues was commis-sioned by the Regus Group, and was jointly undertaken by Durham Business School and JBA. The societal and per-sonal gains in terms of reduced travel time, reduced com-muting distances, reduced travel costs, and effective use of office space that can be achieved through the introduction of alternative, more flexible working practices were explored.

The study into the social and environmental responsibilities of business focused on following the ‘conventional’ daily business cycle for so many of us – the commute, the ‘day-in-the-life’ at the office, followed by our attitudes to busi-ness environmental waste. The study started by considering the issues of the commute to work. How many of us still commute on a daily basis? Where are we typically going? How far are we commuting? And – the crunch question – what impact are these potentially out-moded working con-ventions causing to our precious environment?

The first big surprise was that the frequency of obligatory commuting conversely relates to the overall distance that staff are willing to travel. In other words, those working – or expecting to work just one-day a week in the office were willing to commute over three times further than those working five-days a week in the office. As the frequency and demands of commuting to the office changed – from five to four to fewer days per week, there was a clear and progressive change in commute distance. The study found:

l the 5-day working-in-the-office commute averaged 40 km

l 4-day working-in-the-office commute averaged 48 km

l and the 3-day working-in-the-office commute averaged 58 km per journey

This trend progressively accelerated towards the single-day working-in-the office where the average commute distance was around 126 km per journey, with a number reporting over 161 km commute distances in each direction.

The impact of our offices on the climate

The 25 European Union states, which emits circa 5.4 million tons of carbon each year (or 20.6 percent of the entire global emissions), needs to do far more to meet the European Commission’s pledge to cut carbon dioxide by a massive 60-80 percent by 2050.

The European Environment Agency (EEA) figures show that the ICT use, heating, lighting, and air conditioning of office

buildings and their associated commuting accounts for 40 percent of the major 15 EU states’ 4.3 million tons of car-bon emissions per year. Moreover, this does not factor in the additional emissions generated by the design-build of new office space – and one only needs to cast an eye around our city skylines to see how much unused office space exists. The heating, lighting, and air-conditioning of multiple large office spaces is significantly less efficient than achieving the same ambient conditions in smaller, more optimally utilized office space.

In simple terms, it’s highly ineffective to heat large open office spaces only for them to cool down at night, and then

Fighting Environmental Waste at Work

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to reheat them in the morning. These large office spaces act completely counter to our needs – they act as massive greenhouses during the summer months, and massive ther-mal convectors during the winter months – making them hotter when we need them cool and cooler when we need them heated.

With our research suggesting that large main offices are presently effectively utilized only around 30 percent of the time, this means our offices alone are potentially responsi-ble for a staggering 1.2 million tons of excessive carbon emissions per year across the EU.

To put this into perspective, were the firms to ask seven out of 10 staffers to head to the office, not do anything for the day, and then head home, they would be vilified. Yet, it’s become acceptable for firms to treat their second most expensive asset – property - in just this manner!

This is certainly ‘food-for-thought’ for your next trip into the office, the next time you leave your office PC running, or the next time you decide it’s someone else’s responsibility to turn off the office lights.

The commute factor

Our research has demonstrated that business is putting a ‘threefold’ strain on our environment by the nature that we currently choose to conduct business. Traditional methods of commuting, the management of waste, and the very way that we currently utilize our office space are all in need of radical overhaul in order to be more responsible for the wellbeing of our planet.

The impact of commuting each day has placed a heavy burden on our environment (office commuting alone contrib-utes 938 million tons of CO2 per year in the EU). The research has indicated that this can be significantly reduced were employers willing to evolve their work prac-tices away from a single, centralized office, and permit staff the spatial and temporal freedom to work from locations of their choosing. The ready availability of cost effective ‘drop-in’ offices, a host of easily attained serviced office solutions and a vast array of communication tools can provide work-ers the location of their choice, and the technology they need. This reduction in commute travel alone could result in lowering CO2 emissions by a quarter of the European Commission’s overall target by 2012.

The issues surrounding the management of waste are demonstrably linked to the culture we have created in our offices. There is a tangible malaise in the efforts to reduce waste; be it not turning off our PCs, reducing air-condition-ing levels, or simply not turning lights off in un-used offices. The impact on both the environment and the company’s bottom line can be sizably improved were efforts made to alter staff views and ownership of the space they occupy, and in turn to create a culture of individual responsibility for waste reduction. Workers who look to have greater spatial freedom in their work location choice will in turn be more positive in promoting waste management. The next chal-lenge is to extend this into the consciousness of every

employee, regardless of his or her working location.

Finally, the very way in which we utilize our offices simply must be addressed. The changing demographics of where and when employees choose to work has driven down the actual utilization of office space to close to 30 percent. To provide heating, lighting, and other services for about 70 percent empty space is utterly nonsensical, in both financial competitiveness and environmental terms. Again, employers should be looking at using alternative work locations, in order to more effectively control their carbon footprint. The ability to share fully optimized office space with others cre-ates effective economies of scale savings that will have a positive contribution the bottom line, whilst simultaneously helping to reduce our carbon footprint and creating a more productive workplace.

The bottom line is that business could do far more for the environment by making just modest changes to working practices. Combining the gains from commuting with effec-tive office utilization and a more inclusive, social and responsible attitude to waste could reduce the short-term business carbon footprint by 32 percent – and deliver sub-stantial financial gains for business. n

A summary of the key findingsIt’s beyond debate that the way business operates today

cannot continue – the penalties to our environment are

simply not sustainable. The key findings from our research

were;

l The European Commission sees climate change as

“probably, long-term the single most important issue we

face as a global community”. The Commission’s commit-

ment is, when compared to 1990 levels, that carbon emis-

sions must be reduced by 20 percent to 2012, 30 percent

to 2020 and 60-80 percent by 2050. Just modest changes

in the habits of European office based staff could deliver

a quarter of this overall target ... tomorrow!

l At present utilization levels, our offices are responsible

for 1.2 million tons of excessive carbon dioxide. The use

of office space accounts for about 40 percent of the EU’s

carbon emissions.

l Our research found that offices are only being effec-

tively utilized around 30 percent of the time.

l Employees constrained to five days a week in a main

office are spending ever-decreasing amounts of their

actual working day at a dedicated workstation or office.

l Some 34 percent of those working in main offices

rarely consider reducing waste, yet by contrast, 28 percent

of those working at alternate locations often consider

reducing waste.

l Office commuting alone contributes 938 million tons of

carbon dioxide per annum in the EU.

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t h e o f f i c i a l c e r e m o n y

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The AmCham Bulgaria Board of Directors had a meeting August 27 with the newly appointed U.S. Ambassador Nancy McEldowney to discuss the future cooperation between the U.S. Embassy and the Chamber in developing the bilateral U.S.-Bulgarian economic and commercial relations.

AmCham Board members shared with Ambassador McEldowney views on the business climate in Bulgaria, the ways the country’s competitive advantages can become more visible for the American companies and how the Chamber may help in attracting more foreign investors. Alexander Karagiannis, deputy chief of mission, and Scott Pozil, commercial counselor, took part in the meeting as well.

On August 26 Ambassador McEldowney presented her creden-tials to the President of Bulgaria Georgi Parvanov. Ambassador Nancy McEldowney was confirmed by the Senate on April 29, 2008, and took the oath of office on July 25, 2008.

The ambassador landed on August 14 in Sofia, accompanied by her husband Tim Hayes, a retired Air Force pilot, and two daugh-ters - Jessica and Alyssa. “It is a privilege for me to represent the United States in Bulgaria,” Nancy McEldowney said in excel-lent Bulgarian. “From now on, we have many important tasks to accomplish such as safeguarding regional security and promoting the mutual understanding between our two nations,” the ambas-sador explained. “I am looking forward to starting my work here,”

McEldowney ended, again in Bulgarian.

She previously served as the Deputy Chief Mission in Ankara, Turkey, from June 2005 to March 2008. Prior to that, she served as Deputy Chief of Mission at the U.S. Embassy in Baku, Azerbaijan. In her most recent Washington assignment, Ambassador McEldowney served at the White House as Director of European Affairs on the National Security Council.

Ambassador McEldowney has also served overseas at the U.S. Embassies in Cairo, Egypt and Bonn, Germany. In addition, she was a member of the U.S. Delegation to the Strategic Arms Reduction Talks with the Soviet Union in Geneva, Switzerland. Within the Department of State, Ambassador McEldowney has worked in the Office of Soviet Affairs, the Office of European Security Affairs, the Front Office of the European Bureau and the Office of the Deputy Secretary. She has also served in the Office of the Secretary of Defense at the Pentagon.

Ambassador McEldowney completed her undergraduate studies at New College and holds graduate degrees from Columbia University and the National Defense University. Ambassador McEldowney has been granted the State Department’s Superior Honor Award on four occasions. She is also a recipient of the Sinclair Linguistic Award and the National War College’s Distinguished Writing Award. Ambassador McEldowney is a mem-ber of the Senior Foreign Service. n

AmCham Board meets Ambassador Nancy McEldowney

Оn Tuesday, August 26, Ambassador Nancy McEldowney present-

ed President Georgi Parvanov with accreditation letters from

President George W. Bush.

Stay flexibleand work smarter

One address in Sofia 950 in the world

Fully equipped offices - walk in, start work Drop-in offices & lounges Support when working from home Meeting rooms & training facilities

Call +359 2 805 75 75 or visit regus.euAP_Vagabond_0908 1 4/09/08 14:55:50

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What is your view of the AmCham?

AmCham is a hallmark of success, and I am impressed by your energy and the quality of your membership. Your powerful advocacy efforts have made AmCham the №1 chamber in Europe last year and №2 this year, and I am delighted to be able to work with such an accomplished group. By focusing your business programs on Bulgaria’s EU membership, you have brought attention to the burning trade and investment issues facing this country. The diverse AmCham mem-bership represents the best of Bulgaria, and your industry expertise, business practices, and innovations will help strengthen and grow trade and invest-ment here. I am ready to work with you on building an even more suc-cessful future.

What role do you see for the AmCham in further developing U.S.-Bulgaria trade relations?

The business environment in Bulgaria is ripe for U.S. investment – bilateral trade between our two countries last year was approximately $750 million, but it could be much higher, and the AmCham is in a position to encourage such growth. For example, outreach programs – especially targeting specific industries – would go a long way to publicize the commercial benefits of Bulgaria’s membership in the EU and NATO.

In addition, the AmCham can help raise the level of investor confidence and improve the business climate. Bulgaria is at a crossroads, and the path it chooses will determine its role in the European Union and in the global arena. Targeted strategies that incorporate input from U.S. industry and expose the root causes of major investor problems are key components for success.

Scott Pozil joined the Foreign Commercial Service in February 2001, and

assumed his role as the Senior Commercial Officer (SCO) at the U.S. Embassy

in Sofia in June 2008. He is responsible for assisting U.S. companies in pursu-

ing business and trade opportunities in Bulgaria. Previously, Scott served as the

Deputy SCO in Singapore, and as the Commercial Liaison Officer to the African

Development Bank and acting SCO in Abidjan, Cote d’Ivoire. Scott joined the

U.S. Department of Commerce in 1996 as a Presidential Management Intern

(PMI). He worked as an international trade specialist in the Trade Information

Center (TIC) from 1996-1997, and then in the Middletown, CT Export Assistance

Center from 1997-2001.

Scott received an MPA (Masters in Public Administration) from American

University in 1996, and a BA from Lake Forest College in 1993. During 1994,

Scott served as Fulbright Scholar in Zimbabwe, where he worked for an econo-

mist and wrote & presented a paper on “The Commercial Banking Sector in

Zimbabwe.”

I Am Impressed by Your Energy and the Quality of AmCham Membership

Scott Pozil:

An Interview with the U.S. Commercial Attaché to Bulgaria

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Finally, the U.S. Embassy / AmCham connection is a vital element of main-taining a strong bilateral trade relation-ship. By working together to provide advocacy assistance to American firms, organize business programs on key top-ics, and rally support for legislation and policies to improve the business environ-ment, we make it possible for our com-panies to succeed and prosper. The ratification of the U.S.-Bulgaria Double Taxation Treaty is an excellent example of such efforts, and I look forward to building on our successes in the future.

What steps would you recommend that the Bulgarian government pursue to improve the business environment for U.S. companies in Bulgaria?

Many U.S. investors have complained about bureaucratic delays, lack of trans-parency, and a weak judicial system. Corruption and organized crime are a stain on Bulgaria’s reputation and dis-suade some firms from looking at investment opportunities.

Some changes should be fairly simple – such as making it easier for foreign investors to deal with government agen-cies. For example, InvestBulgaria could employ a one-stop approach to assist investors through the process of setting up operations in Bulgaria, or each min-istry could designate a liaison to guide foreign investors through the bureau-cratic processes in their respective

ministry. Investor confidence is key, and the Bulgarian government must do more both to support existing investors and to implement an effective, integrated approach that compellingly attracts new investors. Regional competition is fierce, and the government needs to be a savvy participant.

We have seen large U.S. companies invest in the telecommunications and energy sectors in Bulgaria in the past three years. Would you please name some other sectors where U.S. com-panies can find attractive investments in Bulgaria?

Bulgaria offers U.S. companies invest-ment opportunities across the spectrum, particularly the environmental technolo-gies and transportation & logistics indus-tries, as well as the fields of medical technology, biotechnology, clean energy, transportation, and real estate. American companies that provide innovative tech-nologies and solutions to improve Bulgaria’s infrastructure are in the best position to succeed.

What are some of the new challenges that Bulgaria and the United States are facing in trade and economic issues?

Bulgaria is in a fortunate position – the global economic downturn has not seri-ously affected the country, and with previously-record FDI inflows there are major opportunities for foreign compa-

nies to contribute to the nation’s devel-opment. Both the government and the business community must keep Bulgaria on the right path. In other words, to create and sustain an environment where foreign investors and trade part-ners are welcomed with open arms and a commitment to help them succeed here.

A key challenge – and opportunity – for Bulgaria is “awareness.” Bulgaria is not on the radar screen for American com-panies; now is the time to change that. An integrated outreach program that showcases the benefits of doing busi-ness here should be a priority.

The same could be said as a challenge for the United States – U.S. companies are some of the best worldwide at brand management and marketing, but the average Bulgarian has a relatively low level of awareness about the extent of U.S. investment here already. They, too, need to see the value these investments will provide in the future.

What message do you have for the AmCham members?

I am excited about the opportunity to live here and to work with you. These are exciting times in Bulgaria. The commercial relationship between our two countries is blossoming and we must work together to ensure it contin-ues. Together we can and will make a difference. n

The ratification of the Treaty on Avoidance of Double Taxation between the United States and Bulgaria has been a top priority on the lobbying agenda of AmCham Bulgaria Public Affairs Committee for the last few years.

This summer we witnessed an important development when on July 11, 2008, the Parliament of Bulgaria ratified the Protocol of Amendment, following an earlier ratification of the Treaty.

AmCham Bulgaria took the opportunity to actively advo-cate for bringing the Treaty ratification by the U.S. Senate to a conclusion by the end of 2008, so that it may come into force as of Jan. 1, 2009. The ratification of the Treaty and the Protocol of Amendment will help accelerate the

growing flow of U.S. – Bulgarian trade and investment, and will ensure that investors maximize the economic benefit from their projects.

Among AmCham’s lobby initiatives in that regard were the meetings of Borislav Boyanov, AmCham president, and Kenneth M. Lefkowitz, Public Affairs Committee chair, with Senator Wilson, co-chair of the U.S. Congressional Bulgaria Caucus, during his visit to Sofia in August, as well as letters sent to Senator Joseph R. Biden, U.S. Senate Committee on Foreign Relations chairman, and Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce. AmCham Bulgaria kindly request-ed cooperation for early and favorable consideration and timely action to ratify the Treaty. n

U.S. – Bulgarian Treaty on Avoidance of Double Taxation Update

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“High energy prices and environmental concerns send a message to the world that drastic changes are needed in the way that we produce and use energy. That ‘revolution’ can only succeed if everybody involved is prepared to work together to develop a new and sustainable model for the energy sector,” says Leslaw Kuzaj, regional executive for GE in Central Europe.

On 7-8 October 2008, the Second Regional Energy Forum will take place in Budapest, Hungary. Initiated by GE in 2007, the Regional Energy Forum is a cooperation between AmCham Bulgaria, Czech Republic, EU, Hungary, Poland, Romania, Slovakia, and Ukraine and the largest players in the energy mar-ket in CEE, with the aim to change attitudes and foster coopera-tion in Central and Eastern Europe (CEE) on the region’s most critical energy challenges.

“Conferences on energy are not rare”, adds Kuzaj “but they tend to focus on specific groups of participants: scientists, NGOs, or

government officials. GE as a major investor in CEE is ready to use its global understanding, size, and expertise to help the region to become more competitive in the global economy. One of the tools that we have designed to achieve this goal is a series of regional stakeholder dialogues on global challenges and possible regional answers, the first of which was held in Poland in 2006 together with AmCham Poland and the Regional Environmental Centre (REC). The Regional Energy Forums are unique by mobi-lizing high-level representatives from all stakeholders, from govern-ments to companies to NGOs, in the debate to find effective long-term solutions. It aims to set an example for regional energy cooperation within the EU,” says Kuzaj.

Kuzaj puts much emphasis on the role of global and regional companies in finding solutions to rising energy prices, energy shortages and environmental concerns. As an important example he quotes the recently announced NETS project, in which Hungarian oil and gas company MOL and six other regional gas

Regional Actions Needed to Resolve Global Energy Challenges

Second Regional Energy Forum 7-8 October 2008By Runa Hellinga

Regional Actions Needed to Resolve Global Energy Challenges

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transmission companies plan to connect their transmission sys-tems, thus creating a regional market.

GE sees new technology as the key answer to the challenges the world is facing. The company invests a great deal in the research and development of different energy solutions, including nuclear energy, biomass, solar and cleaner coal. Investors, like local municipalities and state-owned companies, often shy away from the costs of such new technologies, but EU legislation, growing environmental awareness, energy prices and concerns about energy shortages have resulted in a changing attitude towards new solutions in the region. As Kuzaj also adds: “New GE tech-nologies make our customers more competitive, as they reduce operating costs and improve reliability and flexibility. That enables companies to meet today’s and tomorrow’s environmental and legislative requirements they have to operate within.”

Stimulating dialogue

“As CEE aims to strengthen its position in the global marketplace, global energy challenges are increasingly jeopardizing our short- and long-term economic prosperity and sustainability,” says Gusztáv Bienerth, president of AmCham Hungary. At the same time, he adds, “these challenges could represent a unique oppor-tunity for the region, but that requires joint cooperation”.

“In the past, cooperation on energy matters within CEE has been limited. But by recognizing our common historical, cultural and economic heritage, and by cooperating on a regional level, CEE can better identify and develop competences and technologies, and also better attract regional and international financing to implement solutions to its most pressing energy challenges,” Bienerth says.

“Therefore, last year’s First Regional Energy Forum, was a unique and momentous occasion. It was the first time that so many influential people from all over Central Europe sat together and discussed from many different perspectives the implications of the global energy question and the challenges it puts to us. By establishing this forum, we aim to put issues on the table and stimulate a fruitful dialogue between people who normally don’t meet. Last year, it was a revelation how much information there was, which people hadn’t shared before. In October there will be a new chance to broaden the cooperation, and to build on the momentum generated last year” Bienerth says.

Similar problems and situations

Because of their joint history, countries in Central Eastern Europe face very similar problems and situations in connection with energy issues, says Judit Barta, director of Budapest-based GKI Energy Research and Consulting. All CEE countries share the same characteristics: a GDP that is much lower than the EU average, falling energy consumption in the beginning of the nine-ties as a result of the collapse of state industries, followed by rapidly growing demand today.

Energy consumption per capita is still much lower than in the ‘old’ EU countries, a difference which, according to Barta, is largely due to lower car ownership. “Industrial energy use per product unit is actually very competitive in the region, as most present day industries in the CEE were built after 1995 by international com-

panies which implemented modern, low-energy techniques,” she adds.

In contrast, energy consumption per household is high. According to Barta, that is especially true for Hungary, as until recently state subsidies kept energy prices at a very low level, and subsidies for insulation only took off in the last three years. Energy waste in the state service sector, like schools, hospitals and government buildings is also rampant. “Actually, rising energy prices for the first time really offer a real motivation to invest in energy friendly heating and hot water systems,” she adds.

All CEE countries see themselves confronted with growing energy shortages. Besides, there is the new EU energy policy that obliges them to reduce carbon emissions. Solving those matters requires enormous investments in new, clean energy plants as well as in renewable energy sources. “But interaction and coop-eration as promoted by the Regional Energy Forum could help to find practical solutions and make the region attractive for investors in the energy sector,” says Barta.

Involving the entire society

In the ‘70s, when Arab countries closed their oil taps, Western Europe was hit by a serious energy crisis. “But that crisis com-pletely passed by the Central and Eastern European countries, because, as members of the communist trade block Comecon, they could rely on the steady supply of cheap oil and gas from the Soviet Union,” says Marta Szigeti Bonifert, executive director of the Regional Environmental Centre (REC), a non-partisan, non-advocacy, non-profit international organization with the mission to assist in solving environmental problems in CEE.

“Confronted with soaring energy bills and real shortages, Western Europeans quickly learned to turn down their heating, put on a pullover and invest in insulation”, she adds. “But citizens in CEE have been programmed completely wrong. Energy was incredibly cheap, and instead of turning down the heating when it became too hot in winter, we opened a window. In big apartment blocks with communal heating systems, there was not even the possibil-ity to turn down the heating. But nobody cared, because what belongs to everybody, belongs to nobody.”

Essential to changing this attitude is the use of a multi-stakehold-er approach on which the REC puts high value. “NGOs are often suspicious when companies get involved in environmental ques-tions.” says Bonifert, who herself held senior management posi-tions within a number of multinational companies before joining the REC. “We can only change things, if society at large – gov-ernments, businesses, organizations and the men in the street – supports it. When such support is lacking, people are not going to be prepared to pay the price. There is no doubt that the finan-cial costs of all these new techniques and requirements are high. But we have to realize that, at one point or the other, we have to pay that price anyway. It is much better to pay one percent more over a period of 20 years, than having to pay 20% more at once in 20 years time,” says Bonifert.

The Second Regional Energy Forum is sponsored by GE Energy; MOL; KPMG; Squire, Sanders & Dempsey LPP; MAVIR; Elmű (Budapest Electric Works); U.S. Steel Kosice; and AES. For more information, please visit www.energycee.org. n

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AmCham Bulgaria warmly congratulates its member Tishman International Companies for the appointment of Alan David Levy, company’s chairman, as Bulgaria’s honorary consul in Palm Springs, Calif. The U.S. citizen Alan Levy, whose cor-poration is rebuilding the World Trade Center in New York, has been appointed as Bulgaria’s honorary consul with the decision of the Bulgarian government of Aug. 21.

Levy, representing Tishman International, received a Class A investment certificate in Bulgaria in 2007. The company is a large-scale investor, executor and manager of big com-mercial areas in the USA and Great Britain.

The company has been present on the Bulgarian market with its big project for the construction of a logistics and business complex – Sofia Airport Center, amounting to 250 million Euro. Tishman International plans to realize further big investments in Bulgaria.

The appointment of Alan Levy as Bulgaria’s honorary consul in Southern California will contribute to the development of the relations between the two countries, as well as to defending the rights of Bulgarian citizens in the United States. n

Alan Levy Appointed as Bulgaria’s Honorary Consul in the US

Alan D. Levy is the chairman of Tishman International Companies, headquartered in Los Angeles, with offices in London, Sofia and Vienna. Tishman has developed, built and managed over 40 million square feet of commercial real estate assets through its many offices in the United States. Tishman’s joint venture partners have included many of the world’s most prestigious financial institutions. Since 1985 Tishman’s European headquarters in London has developed and managed over 4 million square feet of commercial property in the United Kingdom and Ireland. In addition the firm was involved in the development of shopping centers for a major European retailer in the Czech Republic. In 2004 Tishman commenced operations in Southeastern Europe and is currently developing the premiere mixed use development in Bulgaria, Sofia Airport Center, a 250-million-Euro project offering 1.8 million square feet of offices and logistics space. Levy is a graduate of Washington Universities School of Real Estate and is a licensed general contractor, insurance broker and real estate broker in America.

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Political analysts claim that in a democ-racy the door to early elections, for good or bad, is never closed – especially in a parliamentary democracy with a propor-tional electoral system, which leads to the creation and government mainly by coalitions.

Incumbents usually avoid the issue of early elections. Something more – they would do anything possible to take this issue out of the focus of discussions in the political space, in the media and in the society. It is only logical that the parties in power would insist that the incumbent majority will stay till the end of its mandate and will win a next man-date; that the incumbent majority is firmly at the helm and rules with author-ity. For the incumbents, success is unconditional and unavoidable, and their routine message is that the early elec-tions will not change the correlation of forces but will slow down the country’s development.

The opposition, in its turn, is using even the smallest opening to raise issue of early elections and move things forward to an early vote, if possible. Opposition routinely claims that the incumbents have failed to deal with the problems, that they have lost the confidence of the public, that a new political configuration is in the making and that a change is necessary. Populism and demagoguery are widely used by both incumbents and opposition, which is not a coincidental effect as the final goal is power.

Tension again

Sofia Mayor Boyko Borissov urged Prime Minister Sergei Stanishev to call early elections. This is necessary to preserve the stability of the state. “I expect Prime Minister Sergei Stanishev to call early elections,” Borissov said. Otherwise, he added, the state will collapse and “the responsibility will fall on the Prime Minister, as Zhan Videnov was responsi-

ble for the previous collapse.”

In his turn, Stanishev responded to the challenge voiced by Borissov by saying, “I understand why GERB is so eager for early elections – because they would never win under normal circumstances.” According to Stanishev, Bulgaria must work a lot and not meddle with elections. The country needs political stability to attract foreign investments, Stanishev added. „One must be blind in order not to see what is happening in Europe and in the world. All experiments and attempts to destabilize the situation serve only one single purpose – the political and per-sonal objectives of a portion of opposi-tion, who aim only to acquire a ministe-rial position and start sharing the pie.”

The National Movement Simeon II (NMS) speaker Stanimir Ilchev said that the “yellow” party will discuss at its forth-coming convention the possible future moves within the tripartite coalition.

Waiting for ElectionsPolitical autumn starts with dangerous tensions for the ruling coalition

By Marina Georgieva

Three Bulgarian political parties – GERB, UDF and DSB, all members of the European People's Party agreed on joint actions against the current government on a meeting in Sofia, 1st of September 2008. Luchezar Ivanov DSB, shakes hands with Luba Panayotova, UDF.

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„Currently, there is no change in the parameters of cohabitation with the other two parties in the coalition. The dominant expectations are that at the convention there will be discussions whether there are reasons for NMS to leave the coali-tion,” Ilchev explained.

The Democrats for Strong Bulgaria (DSB), headed by former Prime Minister Ivan Kostov, also announced a month ago that it is preparing for early elections. According to Ekaterina Mihailova, DSB deputy chairwoman, there is a huge level of discontent from the incumbent govern-ment. She was adamant that the early

vote is necessary because of obvious violations perpetrated by ministers Plamen Oresharski, Assen Gagausov and Petar Mutafchiev, more specifically – violations related to the management of the Road Fund. Sergei Stanishev does not demon-strate any will to fight corruption, Mihailova said. She recalled that the DSB has already urged the three ministers to resign but the response of the prime minister lacked sufficient will to act in this direction.

Kostov’s people will insist to restore, by amendments to the electoral law, the observers during the elections. The party

will ask for both local and foreign observ-ers. The observers must be not affiliated politically to any party and must be out-siders to the administration, organizing the vote. DSB said it will insist to intro-duce certain limitations in the Local Elections Act, so that only national par-ties would be allowed to participate.

The rest of the opposition parties – Ataka, the Union of Democratic Forces (UDF), the Bulgarian New Democracy (BND) party – also insist on dissolving this parliament and on convening early elections.

Ataka proposed in late August the oppo-sition and the incumbents to sit down and agree on the transition to early par-liamentary elections. Ataka’s leader, Volen Siderov, said that such an arrangement was made in 1993, when the Bulgarian Socialist Party (BSP) and the UDF agreed to call early elections and the president appointed a caretaker govern-ment. According to Siderov this is the only way to exit the government crisis, which he said is threatening to evolve into an all-out political crisis. “If we move behind the scandal, there is the danger that we will go only deeper into it, there is a danger that country’s image will be blackened, that political relations will reach a dead point, where most of the people will not want to vote for any Bulgarian party,” Siderov said.

“The early parliamentary elections issue entered the political vocabulary of the Bulgarian New Democracy. In Bulgaria, we are in some kind of a permanent election campaign. Besides, the option of early elections in the autumn is becom-ing more and more probable. I used to deny this possibility until recently, as I did not believe that Bulgaria’s political life can bring about the emergence of a pre-election situation. However, Europe’s sanctions and the attitude of the European Commission towards Bulgaria may to a major extend change the situation into a pre-election status as early as this autumn,” said BND Chairman Nikolay Svinarov.

With all those cries about early parliamentary elections

some political forces want to focus the attention on them in order to preserve for several more days their presence on the

Voters prefer a coalition between GERB, UDF, DSB and VMRO The parties, which are seen as the best choice to form a right-of-centre ruling

coalition, are GERB, UDF, DSB and VMRO, according to a survey conducted by

the ESTAT polling agency. The data were collected by phone among 509 adult

citizens in Bulgaria’s 10 largest cities on July 2-4, 2008. The party of Sofia Mayor

Boiko Borissov was supported by 35.4 percent of the respondents questioned

about their preferences for a right-of-centre coalition. Next follows UDF with 27.6

percent, DSB with 9.4 percent and VMRO with 6.4. GERB continues to be the

leading political player in Bulgaria; respondents however admit that the party will

need coalition parties. The coalition format as drawn by the respondents’ prefer-

ences is characterized by the established image of the traditional rightwing par-

ties, which however are still incapable of using this image to generate a genuine

electoral potential, according to a sociological analysis of the data. The decision

to exclude Yane Yanev from the parliamentary group of the United Democratic

Forces is seen as the right measure by 40.6 percent of the respondents, while

another 17.7 percent think this was a mistake. Almost half of the adult citizens

in Bulgaria’s ten largest cities are of the opinion that buying votes must be sanc-

tioned by a ban on political activities. A much smaller group spoke out for sanc-

tions like fines or imprisonment.

Boyko Borisov, who is now more of a fighter for early elections than a mayor of Sofia during his meeting with the leader of Union of democratic Forces Plamen Yurukov.

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political scene; otherwise they would turn into political corpses, said BSP member of the parliament Georgi Yurukov. He stressed that there will be no early vote. He motivated his words by recalling that Bulgaria is currently implementing an action plan, which will be presented to Brussels. An active political session will start in September, and the government has not stopped to work. A serious autumn is coming, during which Bulgaria will show a different face and demon-strate a different will to its EU partners, Yurukov went on to say. According to him the behaviour of the opposition parties is understandable, as they realize they have no political weight on the political scene.

Pre-election coalitions to the right

Borissov’s proxy in GERB, the nominal party leader Tsvetan Tsvetanov, called in late July on the president to immediately initiate consultations with the political forces on the early termination of the mandate of the 40th National Assembly and to appoint a caretaker cabinet.

GERB insists the Parliament to skip the summer recess, which had been approved, and to take up the legislative initiatives necessary to secure the hold-ing of the early parliamentary elections. GERB called on the opposition as well, urging to start preparations for early elec-tions in order to assure the best possible performance and the stability of the future right-of-centre government.

The 17 measures, listed by GERB as necessary to restore the confidence of the European institutions in Bulgaria, include also the call on the cabinet to assume the political responsibility and to launch measures to take control over the crisis in the period until the early elec-tions in the autumn. GERB insists on a clear crisis management program, con-taining schedules and explicit responsi-bilities.

Tsvetanov urged the cabinet „to stop behaving arrogantly and haughtily when dealing with Bulgarian voters.” The GERB chairman added that Bulgaria „is at the threshold of an even bigger crisis“ and stressed that he expects Bulgarians to be more active and block all efforts to apply corruption practices. GERB also warned that if the 17 measures are not

implemented, it is probable that in the autumn Bulgaria will witness the sponta-neous outburst of citizens’ discontent. Tsvetanov, however, admitted that GERB as a political party will not spearhead such a protest.

He stressed that his party will participate independently with its own lists in case of early elections. If, however, the party fails to win a majority, sufficient to rule alone, GERB will look for a coalition with the old members of the European People’s Party, Tsvetanov said.

Elsewhere in the public domain, a debate has been going on for months on the possibility to form a pre-election coalition between Kostov’s party, DSB, and the UDF. The main problem, which stops Kostov from offering an alliance to Plamen Yurukov is that the new leader at 134 Rakovski St. (the UDF headquarters) has allegedly expressed his unwillingness to join forces with DSB. The former prime minister has allegedly started to think about a coalition because of the unrest among his co-partisans, who seem to be fed up with supporting a party, which seems like doomed to remain in opposition. The DSB members of parliament are also aware of the fact that they have almost no chance to emerge above the 4-percent barrier at the elections next year unless the party joins forces with the UDF.

Sociologist Antonii Galabov claimed that UDF and DSB have a genuine chance to negotiate the 4-percent barrier and enter the next parliament. Having in mind the difficult characters of the right-wing lead-ers, they will have to seal an agreement before the elections for a coalition after the vote,“ Galabov said. According to him, the clear and adamant signal by the European People’s Party that UDF and DSB have to join forces would serve as an incentive to quickly find the ways and means for an alliance. „Such a coalition would be tied both on a local and an international level,” he added.

With an expected turnout of 40-43 per-cent, Galabov said, there is a genuine basis to claim that a stable ruling coali-tion between GERB, DSB and UDF would be possible. „According to current esti-mates Boiko Borissov’s party will win between 75 and 95 seats in parliament. The maximum UDF can hope for would be 25-26 parliamentary mandates, and

DSB could win 14 to 16 seats. “In this case, with good results for GERB, the three parties could form a stable coali-tion,” Galabov said.

Prof. Mikhail Konstantinov made a similar forecast. He quoted the results of sur-veys, predicting between 100 and 110 seats for GERB. “The UDF alone, if it ever wins enough votes to enter the next parliament, would have up to 15 parlia-mentary deputies. If UDF and DSB man-age to form an alliance a sufficient time before the elections, their previous sup-porters could be united and then the two

Konstantin Trenchev, chairman of the Podkrepa Trade Union Confederation: „It is an undispu-table fact that Bulgaria is not governed well.“

“We approach seriously the meet-

ing proposed by the opposition. It is

an undisputable fact that Bulgaria is

not governed well. For us the oppo-

sition is the necessary corrective

force for the incumbents,” Trenchev

said. He added however that his

words do not mean that the

Podkrepa trade union confederation

communicates only with the opposi-

tion. Syndicate organization would

never allow to be used to solve the

problems of others, he stressed.

Zhelyazko Hristov, chairman of the Confederation of the Independent Trade Unions in Bulgaria (CITUB): „The dialogue with the opposition is very impor-tant for us.“

“After three years of silence the

incumbents there are some signs,

albeit belated, of activity. No one

has so far initiated any measures to

amend the Social Security Code.

Bulgarian workers continue to work

for the lowest salaries, every tenth

Bulgarian receives money from rela-

tives living abroad. One third of

Bulgaria’s economy is in the grey

sector,” Hristov said. The CITUB

leader had told Ivan Kostov that the

dialogue with the opposition is

important. We have to search for a

solution with the incumbents of the

issues on the public agenda, he

added.

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parties would have the potential to wing between 25 and 30 seats. This would be a perfect coalition with a majority in par-liament,” Konstantinov said. According to him, however, if the two parties decide to play alone, the votes for DSB would be lost.

“The deadline for forming such a right-of-centre alliance is February next year. Before that however the leaders will have to offer an excuse for the insults their supporters had to suffer for years as people started to feel after DSB split from the UDF like the children of divorced parents,” Konstantinov said. Such a policy would bring to the united right-of-centre close to 40 parliamentary seats. If, however, Kostov and Yurukov refuse to shake hands on the deal and only the UDF manages to sneak into the next parliament. GERB will have to form a coalition also with Ataka, in order to be able to form a government majority, he pointed out.

According to the provisions of the Bulgarian Constitution, if the cabinet resigns, the president will hand the man-date to form a cabinet again to the larg-

est party in the National Assembly. Then he will have to try with the second largest etc. If none of the parties represented in Parliament manages to form a cabinet, then the President will have to schedule parliamentary elections and

appoint a caretaker govern-ment

This means that even if the incumbents decide that it would be better to step down and opt for early elections, they will simply not be able to do it, as the basic law of the Republic stipulates that they will have to hand the power before the elections to the caretaker prime minister appointed by the President.

Early elections now would certainly not change anything. Elections legislation will not be amended, and the legislation gov-erning party financing will also remain unchanged. Authorities and institutions will simply abandon their normal opera-tions and switch to a campaign mode. All expected revelations concerning those involved in the scandals, no matter whether they are really guilty or not, will have to wait for some unknown future.

The president, who is also subject of the attacks by the opposition, will have to appoint a caretaker cabinet. All kinds of clever and knowing people will start dis-secting all aspects of such a situation – as if they have just dropped out of a picture on the wall and have never been party to decision making.

One could always find the ways, the means and the methods to precipitate early elections - legal and/or illegal means, by parliamentary and/or extra-parliamentary forms, derived from social and economic quakes, parliamentary and/or government crises, coalition and/or inter-partisan misunderstandings and conflicts, etc. Regardless of how stable, united and unshakable a cabinet looks, it could collapse very quickly. At first glance it may appear that there are no indications and prerequisites for such a collapse to happen, and it is always unexpected when it happens. Success and failure of a government in today’s global world depends mostly on whether it is capable of sensing the forthcoming troubles and whether it is capable to find adequate and efficient measures to avoid the collapse. n

The last time when Ivan Kostov, DSB and Plamen Yurukov, UDF were seen together was during the local elections in Sofia in 2007. In general they avoid each other.

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It is very easy for politicians to believe that they would never fail. Just because this is the only convenient and comfortable position. And when they find themselves facing an awful fiasco, instead of feeling guilty or be angry, they give full play of verbal justifications. At the end of July 2008, the European Commission (EC) sus-pended a total of 825 million Euro from the pre-accession funds for Bulgaria due to insufficient progress in the fight against cor-ruption and organized crime. This was the sentence of both EC reports on the progress of Bulgaria. At the moment, when Sofia takes the required steps for better financial management and control, the European Commission will be ready to release the funds, the report said.

The facts

The European Commission imposed a ban on four Bulgarian agencies to absorb the EU funds because of corruption, thus freezing about 1 billion Euro from the pre-accession funds and threatened to block funds under the operational programmes. According to the report on the European funds absorption in the poorest EU member-state, the corruption among top offi-cials and the organized crime have affected mainly the capac-ity of administration and the judiciary. “Urgent action is needed because deadlines for contracting some of the funds

are approaching, after which the funds will be lost to Bulgaria,” the report says.

Most funds might be suspended under the Phare Programme, which provides technical assistance to EU acceding countries. Under the report, the funds of two key agencies have been sus-pended and their amount stands at about 610 million Euro, 250 million of which have not been released yet. As a result, the agen-cies will not be able to receive these funds until they do not provide guarantees that an efficient, working mechanism and a control system have been established. The other two agencies are the Paying Agency under the SAPARD Programme with 210 million euro and the Executive Agency with the Regional Development and Public Works Ministry, which will not receive 144 million Euro for construction of roads.

Three ministries have Executive Agencies under the Phare Programme – the Labor and Social Policy Ministry, the Ministry of Economy and Energy and the Ministry of Regional Development and Public Works. Their authorities include implementation and management of projects under the pre-accession programme. These agencies play the role of Paying Agencies for absorption of funds under the operational programmes, by means of which Bulgaria is absorbing EU funds as an EU member-state.

European Commission Shows Red to BulgariaFarmers respond with protests, the unions – with threats of a general strike

By Marina Tzvetkova

Clashes between the protesting Bulgarian farmers and the police in front of the government headquarters downtown Sofia. The protesters claimed that the government is responsible for stopping the EU funds for the local agriculture.

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The Agriculture Fund is the fourth paying agency, which affects the payments under the SAPARD Pre-accession Programme and the Rural Regions Development Programme under which Bulgaria has to absorb almost 4 billion Euro until 2013.

The Bulgarian Finance Ministry gives the final approval of all pay-ments, which are made by the four agencies. The total sum of the European funds for Bulgaria for the 2007-2013 period is almost 12 billion Euro.

By stripping the four paying agencies of accreditation, the projects under the operational programmes will most probably be approved directly by the European Commission. This will be carried out via a Commission’s own mechanism. Bulgaria has not concluded yet the absorption of funds under the pre-accession Phare, SAPARD and ISPA Programmes.

Excuses of the rulers

In the position of a spokesman of the ruling coalition, Deputy Prime Minister Ivailo Kalfin explained the situation in the following way: “Payments for some projects under two pre-accession pro-grams, ISPA and SAPARD, have been suspended. The negotia-tions for them should be made by end-2009, and decision whether payments to continue, will be taken in the autumn, when EC will see what measures have been taken so far. Regarding the third pre-accession programme, Phare, the accreditations of two of the four agencies, working under this programme, were temporarily removed. This means that they will be able to carry out tenders for new contracts, but they will receive funds only if accreditations are returned. Since the deadline for negotiating these programs is at end-November 2008 , how much funds this country could absorb depends on whether and when the accred-itation will be recovered.”

About 200 Million Euro are at risk,

Kalfin acknowledged and added this country has to reconcile that, even without these problems, it would have not been able to absorb all funds under this programme.

“We are just at the beginning of the absorption of the “big” money from the European Union, which is the normal schedule observed in all new member-states, and these funds are neither suspended, nor taken away. The negotiation deadline for them is 2013. Subsequently, no funds have been taken away so far; there is money, which is at a risk of loss, however, not to the amount as specified by media. I do not deny the problems, which have led to the delay and suspension of funds. By the way, it was not found out that any money were stolen from the European funds in Bulgaria,” Bulgaria’s foreign minister said.

The most shocking sentence in the European Commission’s report, however, is hanging over the head of the incumbent gov-ernment as a millstone. It simply says:

„Bulgaria speaks only rather than act.”

The criticism of the European Commission, which has no precedent, terminated the timelessness, put Bulgaria into a coordinate system, which clearly shows where it is located, said Ognyan Minchev, Director of the Institute for International

and Regional Studies.

Centre for Liberal Strategies Director Ivan Krastev added that the tone of the European Commission is caused mainly by the lack of a response by Bulgarian authorities regarding obvious problems. “These are the harshest words used so far in regards to a mem-ber-state. The government is right that there are abuses with the European funds in the older EU member-states, however, this time the problem was, that in the case of an evident conflict of interests at the Road Infrastructure Fund, the Bulgarian institutions had been explaining for a month that there were no conflict of interests and no problems there,” he said. Social scientist Mira Yanova explained that the political authorities have collapsed and people do not trust even those who have not come to power yet.

Avalanche of protests

A day after the official announcement of the European Commission’s report, Bulgarian farmers blocked the way from Kurdzhali to five municipalities in the region due to the irrevocably lost 121 million Euro under SAPARD. According to them, the deci-sion of the European Commission is unfair and only Bulgarian producers are affected by it. Many farmers have obtained credits to maintain their farms. The protest participants said that there will be mass bankruptcies without European subsidies. Some of them have decided already to liquidate their stock. They insisted to receive the European subsidies for pastures, for the milk they have produced in the last year.

Meanwhile, Bulgarian Association of Dairy Processors called on the government to start immediately negotiations on budget pay-ments to projects under SAPARD, and after that to take the necessary measures to lift the ban over the three measures.

The government tried to neutralize the pressure quite clumsily when the Agriculture Minister Valeri Tsvetanov said that the Cabinet is immediately extending additional aid worth 60 million Leva to milk producers without waiting for an approval from Brussels. According to him, even if the government is fined by the European Commission, the sacrifice is worthy.

The move is convenient for the current Cabinet, because penalty procedures of the EC are quite slow and take years, so the pay-ment of the fine will certainly be a concern of the next govern-ment. Then the authority, no matter what it is, will pay out of the budget, i.e., the penalty will be levied on all taxpayers. There is also another possibility – the fine to be collected from all milk producers who had received the subsidy banned by the EC.

That is why the proposal of the Bulgarian New Democracy leader Nikolai Svinarov sounded logically - if Bulgaria is fined, the penalty should be paid by the three-party coalition whose mandate brought stock-breeding to its knees. It is still possible to find sufficient number of sponsors among the companies around the Movement for Rights and Freedom that would

buy out at least some of the sins of their ministers

within the agriculture sector. Since the protests have broken out, voices from the coalition in power are heard all the time that GERB’s early elections ambitions stand behind the protest of the

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milk producers. Recently the new agriculture minister Valeri Tsvetanov admitted that no national system for identification of animals has been developed yet, without which the budget can-not pay a subsidy per animal. Our farmers are only entitled to European subsidies according to the size and the type of cul-tivated land. The paradox is that the system that had to be ready and approved by Brussels by the end of 2006 is not functioning yet. Currently, the ministry is promising to finalize it by Sep. 15, and Brussels will be checking it at least until mid December.

There are additional delusions spread among the public. The latest agreement with the protest participants stipulated that a working group will be established with the participation of the Agriculture Fund, the Finance Ministry and the National Revenue Agency to prepare a reduction of the Value Added Tax on dairy and meat products from 20 per cent to 10 per cent. It turned out, however, that Bulgaria’s Finance Minister Plamen Oresharski has never heard about this idea.

The new Agriculture minister easily promises amendments to the Agricultural Land Tenure Act. Under these amendments, state, municipal land and pastures will be leased to cattle own-ers without a tender or a competition for a period of at least 5 years. In the middle of protests such a proposal has relieving effect, but will politicians understand that the step from here to corruption is very small? What will guarantee that attractive municipal pastures will not be given only to people who are close to local powers that be?

Since the beginning of the year, the Agriculture Fund allocated a total of 58 million Leva to stockbreeders. Of them, 9.1 million Leva were spent for January and February as subsidies for milk production. A proof for the sluggishness of the Agriculture Ministry is the fact that farmers started receiving aids for March

only in August.

For the purchase of fodder, 41.75 million leva have been ear-marked under the pressure of the protesting farmers during the

SMEs Least Interested in EU Funds Citizens, as well as the representatives of the small and

medium business are least interested and least imformed

regarding European operational programmes, a study of

MBMD sociological agency showed. According to its poll,

46 percent of small business representatives have not

sought any information about opportunities to apply under

the operational programmes at all, despite the fact that

two of them, Human Resources Development and

Competitiveness are targeted at small and medium-sized

enterprises (SME). Over 80 percent of society is not

interested in the European programmes as well and does

not seek information about them, however, as a whole,

such a reaction is normal, as citizens are not direct ben-

eficiaries under the EU Funds.

Meanwhile, the awareness of the main beneficiaries - the

municipalities and the nongovernmental organizations

(NGO) - increases, as well as the one of the consulting

companies participating in project development. The share

of projects ready to participate in the approval procedures

increased compared to November 2007. With municipali-

ties the increase is by 24 percent and reached 67 percent

readiness. NGOs show a similar growth of 20 percent to

42 percent readiness. Regarding consultants, whose ser-

vices are used by half of the potential beneficiaries, the

increase is 12 percent.

Farmers throw away 400 liters of milk on the streets of Veliko Turnovo, a protest against the lack of EU money for the agriculture sector.

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last eight months. This aid was given out under the notorious “de minimis” regulation. Pursuant to it, Brussels allowed the treasury to pay 300 Leva per cow; however, the total sum per a farm should not exceed 15,000 Leva. Owners of big farms complained that the aid was sufficient to breed 40 cows only and farms of bigger number of cattle were deprived of food. Subsidies were also given out for breeding pedigree animals and low-interest loans were extended for fodder.

The absolute carelessness of the Agriculture Ministry was clearly demonstrated at the time the first subsidies were given out for processing of fields, common land and pastures. The minister personally explained that applications for funds had

been so confusing that one and the same field could be entered in different columns as they qualify various requirements, thus resulting in excess of land and fines for the farmers. Besides that, the digital map, on which landplots to be supported are outlined, was full of mistakes and showed cultivated land as barren land. The Agriculture Fund will from now on review rejected applications for subsidies demanding protocols from the checks made by the municipal agriculture offices.

In cases where it will be established that fields are cultivated and pastures maintained, the subsidy will be paid. It is disput-able, though, whether money will be found from the budget for the correction of these officers’ mistakes. n

„A government riddled with corruption

and a country beset by crime. That’s the

European Commission’s grim verdict on

Bulgaria, a nation that was supposed to

have cleaned up its act when it joined

the European Union 18 months ago.“

This is the comment of Time Magazine,

after the publication of the European

Commission’s monitoring report on

Bulgaria. The magazine reminded the

decision of the European Commission to

freeze EU aid for Bulgaria worth about

half a billion euro and to strip two

Bulgarian agencies of the right to man-

age EU funds. There is no doubt how

grim the situation is.

„Since 1990, more than 150 people in

Bulgaria have been killed in contract

killings linked to corruption and orga-

nized crime..... Senior government offi-

cials have leaked files to mafia suspects

and the interior minister himself had to

resign after he was found consorting

with two dubious businessmen. Ten

Bulgarian MPs were stripped of their

immunity from prosecution last year

because of alleged involvement in cor-

ruption,“ Time wrote. The magazine

mentioned also that the „Bulgaria’s new

anti-corruption agencies are effectively

toothless and that there is no political

will to deal with the fraudulent mishan-

dling of E.U. funds.”

“Bulgaria’s plight is also a failure for the

E.U.,” wrote the magazine. „In the past,

wayward new members have avoided

punishment because Brussels’ attention

has slipped. The Commission’s new

tougher approach will establish whether

punishment can set Bulgaria on the

straight and narrow.“

British daily The Independent reported

that “Bulgaria’s dismal performance is

also blow to the European Commission,

which has struggled to fend off accusa-

tions that it was too hasty in welcoming

the newcomer last year. The European

Union has suspended hundreds of millions

of Euros in aid to Bulgaria for its failure to

purge the country of crime and sleaze.

The unprecedented move is a major

embarrassment for the bloc’s newest and

poorest member, after it was given repeat-

ed warnings to prevent fraud and get to

grips with Mafia-style criminal gangs.”

The daily further comments that the

case of Bulgaria should serve a lesson

to Europe. A simple rule is in effect in the

political life and in life in general: you

may want something from somebody

who wants to join your club until he tries

to join. After the accession you are losing

all mechanisms, due to the lack of the

basic opportunity to expel him.

The Financial Times wrote that „the

strong language on Bulgaria and Romania

was contained in two reports, which

nonetheless made clear the Commission

was not threatening to suspend funds

earmarked for the EU’s 2007-13 budget

cycle. Neither is the Commission prepar-

ing to invoke a clause in their EU acces-

sion treaties, under which it could lift the

obligation on other member states to

recognise Bulgarian and Romanian court

decisions.”

„EU diplomats said the Commission’s

decision to talk tough and act more

softly reflected the nearimpossibility of

taking severe steps against countries

once they had joined the EU, which

thought of itself as a “family” of like-

minded states,“ said the British daily.

„The European Commission froze hun-

dreds of millions of Euro in aid to Bulgaria,

citing poor administration, corruption and

organized crime and casting a cloud over

the future expansion of the European

Union,“ International Herald Tribune

reported. „The stakes are high for Bulgaria,

which is slated to receive 6.85 billion Euro

from EU structural funds in the 2007-13

budget. The report highlights the risk that

some of this will be siphoned off illegal-

ly.”

French daily Libération wrote that the

Bulgaria’s and Romania’s EU accession

has been rushed. The European

Commission published three reports,

which were harsh to Sofia and Bucharest,

and which blamed them that they are

erroded by the mob and corruption witout

making any efforts to get healed. daily

added. Libération added that no European

Commissioner was brave enough to give

explanationsto the European media and

two spokesmen were left to deal with the

task.

According to Le Monde, the European

Commission has undertaken unprece-

dented attack against corruption and

organized crime, which are eroding

Bulgaria, and has stated in the long run

that it freezes part of the European aid

until Bulgaria copes with the situation.

The daily mentions that according to

European representatives, the application

of a safeguard clause might have a

reverse effect, as it might be harmful for

the court cooperation between the

Bulgarian authorities and their European

neighbours in the fight against organized

crime, Le Monde also said.

EC report echoes in the media

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Domestic and foreign investments in the Bulgarian fuel distribution network have been quite dynamic since the early phase of transition from planned economy to free market in the early 90’s. The number of fuel traders and retail fuel facilities has risen substantially shortly after the market liberalisation and features one of the high-est penetration ratios in Europe in terms of fuel stations per capita or fuel stations per registered transport vehicles. As of mid-2008, the number of fuel stations in the country is estimated at about 3,100 on population of 7.5mn and 2.8mn road trans-port vehicles. The market is covered by a large number of small distributors and large networks of powerful international brands like Shell, OMV, Lukoil as well as regional players such as Greece’s Hellenic Petroleum and Romania’s Rompetrol. The Dutch fuel company Shell has been the first to expand on the local market through franchising deals and acquisitions of local players.

The major investments in the sector how-ever took place after the end of the Serbian crisis in 1999 with follow-up entries of OMV, Lukoil, Hellenic Petroleum, and Romania’s Rompterol. In the meanwhile, the Turkish fuel trader Opet has announced plans to leave the local market and has launched procedures for selling out its fuel stations.

Several acquisitions and asset transfers in the field of fuel trade in 2007 and 2008 have led to significant changes in the mar-ket shares, especially in sales terms. The large fuel trade networks succeeded to expand their positions on the market not only through equity or asset transactions but also through green-field investments in new retail units. As a result, the aggregated market share of big and medium-sized players widened to about 80% in 2008 as compared to 50-60% in 2005. The esti-mates are based on data presented by Lukoil Bulgaria for the leading fuel distribu-tors and adjustments for recent acquisi-

tions and green-field investments by the rapidly expanding local networks of Rompetrol and Hellenic Petroleum, which is presented on the local market by Eko Bulgaria and is traded under the Eko Elda brand line.

Market leaders

The former state-owned monopolist Petrol retains the largest number of fuel stations in 2008 but the largest share in sales terms has moved to Lukoil Bulgaria. The calculations of the sales volume reflect the recent sale of 75 petrol and gas stations of Petrol to Lukoil. According to data of Lukoil Bulgaria presented in June 2008, Petrol has 383 retail units out of a total of 3,000 in the country, followed by Lukoil (184), Shell Bulgaria (108), and OMV (84). In sales terms the market positions are quite different, as Loukoil estimates its share at 20% against equal shares of 17% for OMV and Shell (OMV sees its share at 18%), and 16% for Petrol. These four dis-tributors cover about 70% of the fuel trade in volume terms and additional 10% are controlled by the next largest players Eko Elda and Rompterol. The remaining 20% of the market is assigned to a large number of smaller distributors. Given that the local refinery of Lukoil covers most of the local demand, the company is gaining strong market power through vertical and horizon-tal integration. The level of competition

however will continue to protect consum-ers, as the large number of other retail traders as well as the liberalised import regime will not allow Lukoil to keep high price mark-ups.

Share of LPG, CNG sales are steadily rising

The fuel trade structure is constantly shift-ing from standard oil derivates towards LPG (liquefied petroleum gas) and most recently CNG (compressed natural gas) due to more favourable tax terms. The share of LPG sales in the total retail fuel trade widened to about 30% in 2008 due to significant price advantages vis--vis benzene and diesel fuels. This is com-pared to a zero market share about 15 years ago. Many of the fuel stations are selling both standard and LPG fuels but there are also traders specialised in only one segment. Most of the LPG sales are covered by imports. Local and foreign investors have launched many projects for building biofuel refineries in the country, for production of both biodiesel and bioetha-nol, but there is no retail market for them yet due to various regulatory restraints and limited consumer demand.

M&A Activities and Asset Transfers

The state antitrust commission approved in April 2008 the acquisition of 75 petrol and gas stations and a storage facility of the country’s major fuel trader Petrol by the local fuel trade division of Russia’s oil major Lukoil. The price of the fuel stations stands at EUR 156.1mn while the storage facility is valued at EUR 80.9mn. The regulator believes that the take-over will raise the market share of the buyer only marginally and will not affect negatively the competition. The concentration of the fuel retail business would balance the market position of the companies. The acquisition of the storage facility is expected to opti-mise the transport expenditures for trans-

Fuel Distribution MarketFuel market remains highly competitive despite recent consolidation

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

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porting fuel to Sofia and the region and would improve the supplies’ schedule. Petrol and Lukoil have signed also an agreement to arrange the court dispute between the two companies. The fuel sta-tions under consideration were jointly run by the two companies since 2001. Lukoil started court proceedings against Petrol last year over BGN 90mn (EUR 46mn) delayed payments under that contract; Petrol on its part asked Lukoil to repay EUR 84mn debt at about the same time. Petrol wants to increase the volume of sales by 10% this year. The company oper-ated 519 stations before the acquisition and had plans to expand its network by 140 new units until 2010. Lukoil Bulgaria runs a total of 180 fuel stations at present (16-18% market share, according to com-pany’s estimates) and plans to expand its retail network to about 300 units. The fuel trader is striving to take the leading posi-tion in terms of retail sales from Petrol, which accounts for more than 25% of the sales at present. The total share of Lukoil and Petrol on the retail fuel market is esti-mated at about 40%. Lukoil Bulgaria, however, has a dominant position on the wholesale market of light and heavy fuels.

In May 2008, the state antitrust commis-sion allowed Eko Bulgaria, the local subsid-iary of the Greek fuel supplier Hellenic Petroleum, to take over 7 of the 9 fuel sta-tions and a storage facility of the smaller competitor Tempo Petrol. The regulator believes that the acquisition will increase the share of Eko Bulgaria, traded as Eko Elda, only marginally and will not lead to market dominance. The price of the take-over is not revealed officially but press speculations point to about EUR 10mn. Eko Bulgaria services 50 fuel stations in the country as of June 2008 and will expand to 57 stations after completing the integra-tion of the newly acquired assets from Tempo Petrol. The company plans to invest EUR 76.7mn in four years in order to double the number of retail units and to expand its market share to 10%. It is the fifth largest player in the sector at present after Lukoil, OMV, Shell, and Petrol. In June 2006, the antitrust body approved the request of Eko Bulgaria for taking over about 20 fuel stations of its local competi-tor Ecopetroleum. The latter has practically left the market after the deal.

In February 2008, the state antitrust com-mission approved the request of OMV

Bulgaria to take over three fuels stations controlled by the local company Brothers Beevi. Two of the stations are located near the southern city of Pazardzhik, while the third is on the territory of the southern resort Velingrad. The analysis of the com-mission shows that the market shares of OMV Bulgaria will remain far below the 35% benchmark for market dominance after the acquisition. The newly acquired stations will be operated under the trade mark Avanti targeted at price sensitive consumers. OMV wants to expand the network of Avanti outlets from 8 to 44 until 2010.

The state antitrust commission approved in June 2007 the acquisition of the LPG (liq-uefied petroleum gas) distribution business of Royal Dutch Shell in Bulgaria by Stichting Tigrane, which is owned by the French company Rubis and has not other businesses in Bulgaria. The acquisition follows a bigger deal of Shell for selling out its LPG distribution business in several countries, including Bulgaria, to Rubis. Shell Bulgaria however claims it will con-tinue expanding its petrol distribution net-work despite the withdrawal from the LPG segment. n

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“You cannot blame me for a planned aggression. I was on holiday when the war started!” cried out in a BBC interview Georgia’s President Mikhail Saakashvili. The anchor person looked as if he did not believe, and the “fiery Mikhail” pulled out his next argument – “My defense minister was also on holidays”.

At the very same time Russia’s Prime Minister Vladimir Putin was not actually on a holiday, as he was attending the Beijing Olympic Games, which, for all practical purposes was more or less the same; President George Bush was there too. The European Commission was unquestionably on holiday, same as all Bulgaria’s politicians. That was August, after all. Who would even imagine that Georgian troops would enter into South Ossetia on August 7, and that, in the same surprising manner, they would unexpectedly be challenged by some 100 Russian battle tanks. The lightning-quick response of people and armies seemingly on holidays... A holiday war – quick, short and unclear, as all August wars fought recently.

Really, what did you learn about Georgia after the world media blasted you with news about Georgia all summer long? Did you understand exactly how the rebels in South Ossetia had pro-voked Tbilisi? Did you manage to follow the battles – how did the Georgians take the provincial capital Tskhinvali and how

did the Russians take it back? It is clear to you who actually was engaged in ethnic purges and to what extent? Do you have any objective answer to all these questions? Here comes the strangest one:

Why did Saakashvili order the attack

against South Ossetia? Why did he move boldly on after he should have known that that and army that is a hundred times stronger than his would rise against him and his country?

You do not understand, do you? Neither do I. But I will at least try to display the possible versions. And after the strangest question comes the most important question: How did a “holi-day war” change the world?

First, something had been brewing there for at least a month before the conflict. The provocations between Georgia and the self-proclaimed republic in the Georgian province of South Ossetia followed in quick succession. The exchange of fire was almost a daily exercise, with the people of the Ossetian leader Eduard Kokoity – and enemy of Tbilisi and a friend of Moscow – taking an active part in the skirmishes. The handful of Georgian villages in South Ossetia were subjected to an especially harsh harassment – some 20 years earlier the

Georgia: The Holiday WarAbout the new cold war, values and natural gas

By Boyko Vassilev

A Russian tank passes by a huge portrait of Russian prime minister Vladimir Putin as it passes through Tskhinvali, South Ossetia, Georgia 20 August 2008 as part of a convoy.

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Kosovo Serbs had demonstrated how bad it is to be a “minor-ity within the minority,” to be a Serb in the Serbian province of Kosovo (dominated by ethnic Albanians) or a Georgian in the Georgian province of South Ossetia (dominated by Ossetians).

Were these provocations a sufficiently good excuse for the

order issued by Saakashvili? He is known for his quick temper even in the Caucasus, where nobody stops to count to 10 before unleashing his anger. Besides, Saakashvili had prom-ised publicly before the elections that he will bring back South Ossetia back within the borders of Georgia. Still,

betting everything,

simply because someone has been buggering you? To rise against the power of Russia and contrary to what the United States advised? Unofficial U.S. sources stubbornly claim that Washington had until the very last moment told Georgia to refrain from an attack. Is it possible to play such a bold poker game with your own career and with your own country?

Both friends and opponents of Saakashvili are still searching for explanations. Georgian authorities claim that their attack preempted an imminent Russian aggression. Here are their arguments shaped like questions:

- How was it possible for so much Russian military equipment to emerge in South Ossetian within a couple of hours? Is this possible without a preparation?

- Why did Abkhazia – the other rebel province - also emerge

as ready for battle? Why did Russian forces take positions there, too?

- Why did the Russian forces enter deep into Georgia and take positions at key roads and ports, and why did these troops delay their pull-out for weeks?

In other words, Russia had coached its puppets to provoke in order to explain its own invasion in Georgia.

Moscow angrily denied and came up with its own theory. The attentive audience of the Russian TV channels heard this theory for the first time from Russian political analysts in mid-August; Vladimir Putin himself developed the theory on CNN at the end of the same month. According to this theory, Saakashvili “Blitzkrieg” had been planned in Washington, with a possible presence of U.S. military instructors at the battle grounds. The objective: a success or failure of the small war had to generate arguments in support of the anti-Russian rhetoric of the hawkish contender for the White House John McCain. Official Washington, of course, denied.

Then the fog obscured not only the cause for the war, but also the war itself. Some sources claim that the Georgians were quickly defeated and fled even before they glimpsed the gun barrels of the Russian battle tanks. According to others, the Georgian army, well trained and financed by the West, fought surprisingly well while the over-praised Russian army managed to take Tskhinvali back only after the second attack. Nevertheless it was confirmed that when the war broke out, Georgian “peacemakers” in Ossetia attacked their Russian colleagues and killed at least 15 of them. It was confirmed

Georgian police arrive in Gori, northwest of the Georgian capital Tbilisi, Georgia on 23 August 2008. Georgia's President Mikhail Saakashvili called for interna-tional peacekeepers in the conf lict zone around the country's two breakaway provinces, South Ossetia and Abkhazia.

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also that Russian air forces bombed the Georgian town of Gori with outdated and very dangerous cluster bombs, killing civil-ians and journalists. Both sides claim civilian victims, gradu-ally downgrading their claims from thousands to hundreds.

The Georgians were driven out of South Ossetia,

and their villages were burned – so that they could never return there. The Georgian cause in South Ossetia, supported by a minority until now, has been reduced to ashes, perhaps for a long time.

This means that, speaking in poker terms – if Saakashvili ever played poker – the Georgian leader’s four of nines was topped by a royal flush. Georgia may never return to Abkhazia and South Ossetia by peaceful means. And when the fog of war settles, the Georgians will not forgive Saakashvili for his weak-ness. The bad thing is that – as we have on many occasions commented in AmCham Magazine – the change of the guard in Georgia never takes place after election, but after demon-strations, coups and putsches.

The West also lost. The European Union was fractionalized, and the United States was too busy with the presidential elec-tions. Nicolas Sarkozy and Condoleezza Rice managed to broker a ceasefire, with the bitter end of it for Saakashvili – their exalted, but disappointed ally. We have commented, again in the AmCham Magazine, on the lack of strategy and the obscure signals from NATO to Georgia and Ukraine emitted during the Bucharest summit. The consequences were quick to emerge.

This is exactly why the Georgians were backed most deci-sively by their comrades in fate – the pro-Western govern-ments of the former Soviet Union republics – Ukrainians, Estonians, and Latvians. The situation is however more com-plex for the Bulgarians and the Hungarians, who support Tbilisi, but rely on Russian energy supplies. The Czech Republic was forced to return 40 years back and remember the Russian battle tanks in Prague. Poland used the circum-stances to poke Moscow by joining the U.S. anti-missile shield.

Despite the string cards, however, Russia also had little reason to celebrate. Winning against the small Georgian army is a poor achievement, especially when the price, which have to be paid is a

long-term confrontation with the West.

Medvedev and Putin, of course, play their cards as if they do not need the cooperation with the EU, NATO and the United States – hoping that Europe will come begging to Russia, and not vice versa. And although the situation regarding oil and natural gas does seem to merit such an approach, Russia is far from indifferent about the mood of world markets and world media.

Moscow pulled its top trump after the war. Recognizing the independence of South Ossetia and Abkhazia, it responded to the Georgian military blitzkrieg by its own diplomatic offensive.

The Ossetians responded to this opening by expressing their willingness to join Russia. Thus, Moscow tried for a double success – applause at home and wrapping up an old conflict abroad: “You see, we warned you that Kosovo will become a precedent. We warned you against recognizing Kosovo, against opening a Pandora chest. What makes South Ossetia and Abkhazia different from Kosovo?”

It is not in my habit to quote myself again, and quoting com-ments made for the AmCham Magazine at that, so I will only note this – yes, South Ossetia does look a lot like Kosovo. Kosovo Albanians cannot stand the Serbians, the same applies to Ossetians and Georgians. The Kosovars refused in 1913 to join a Serbian state; the Ossetians did not want neither the Tiphlis governorate in the 19th century, nor the Georgian state in 1918, or the Georgian Soviet republic later on (the fact that Georgia voluntarily joined Russia in 1801 is quite a differ-ent issue). Both the Kosovars and the Ossetians were force-fully driven into a state – the Kosovars by King Peter, and the Ossetians by Stalin and Beria. Both had an

autonomous status

within Serbia and Georgia; both demonstrated their ambitions to split in 1990-1992. The then Tskhinvali War was bloody – schoolyards were used for burial grounds, bombs killed chil-dren, and CNN was far away. And when later Georgian and Ossetian leaders started trying to solve the issue by peaceful means, the international media and the international commu-nity again stayed away.

Here we come to the differences between Kosovo and Ossetia. For nine long years – from 1999 to 2008 – the inter-national community (including Russia) was engaged in peace talks with the objective to find a mutually acceptable solution for the status of Kosovo. Many sources claimed that the outcome of the talks had been decided in advance, that the Albanians, with the support of the United States, would never accept anything less than independence. Let it be so. But the West waited for nine years, while Russia decided to act uni-laterally and with a lightning speed on South Ossetia and Abkhazia.

This may seem a negligible difference, but it is actually quite substantial. It indicates both the “oil” self-confidence of Russia and the hesitation of the West, which seems to be realizing that something wrong has been done with Kosovo.

Some analysts say that a new Cold War is coming after the holyday war. Let us not try to think so far ahead. The United States will have a new strong-minded president – no matter the name, Obama or McCain. South Ossetia will start counting the states which will recognize its indepen-dence – and if the count stops, as it has already stopped with Russia and the same-minded separatists in Transdnistria and Nagorno-Karabakh, its future will be far from exciting. And Brussels will start thinking again about the Russia issue: Which is more important – the natural gas or the universal values?

Brussels will go deep into the issue and … shall we believe in wonders? … may come up with a solution. n

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If the joint Bulgarian-U.S. military exercises held in Bulgaria could be interpreted as a natural display of the increasing military cooperation between the two states, then the Bulgarian Panther’08 exercise, which started on Aug. 28 at the Novo Selo Range should fully disclose the military and economic potential of the future use of the joint military installations in this country by the armed forces of the two states.

U.S. Army Command in Europe signed three contracts for more than $300,000 for the purposes of Bulgarian Panther’08. The contracts provide various services to the military person-nel, including rest and recreation and temporary transportation (see insert).

Until now, the U.S. Army has signed a total of 13 contracts of a total amount of $7.6 million. Besides, U.S. Army – Europe

has allocated close to $60 million for the construction of per-manent installations at the Novo Selo Range. The range is one of the military facilities, which, in line with a Bulgarian-U.S. agreement, are used for training of armed forces personnel from both states. The other facilities include the Graf Ignatievo and Bezmer air force bases, and a warehouse near the town of Aitos.

The joint military exercises codenamed Bulgarian Panther’08 shall continue until Oct. 30 with the participation of close to 900 U.S. military and civilian personal and 300 Bulgarian troops. The US military contingent includes troops from the 5th Battalion of the 7th Air Defense Artillery and Utah National Guard units.

The main objective of the exercise is to help U.S. military

Bulgarian and U.S. Militar y “Fight” Terrorist Near Novo SeloU.S. Army Command in Europe signed three contracts for more than $300,000 for Bulgarian Panther’08 military exercises

By Panayot Angarev

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personnel improve their links with their NATO partners Bulgaria and Romania. The major objectives of the exercises are: to streamline the command system during multinational opera-tions; to build in the military personnel the skills and habits typical and necessary for missions in Iraq and Afghanistan – patrol and convoy missions, countermeasures against impro-vised explosive devices, medevac, etc; shooting practice with weapons mounted on battle machines and small arms used by the participating states; shooting-range exercises at a platoon and detachment level; support for improving the infrastructure of the host country and participation in joint humanitarian projects.

According to the preliminary plan for the exercises, it takes place in five phases. The objective of the first – preparatory - phase, which ended on Aug. 28, was to build a camp for accommodating the personnel and the equipment of the par-ticipating Bulgarian and U.S. units. More than 15 Bulgarian companies and 200 workers from neighboring villages were employed to provide support services for Bulgarian Panther’08. A camp with commodities, volleyball and basketball grounds, modern fitness center, coffee bar, internet center and movie theatre were built. The equipment is typical for any U.S. mili-tary base and was imported from Germany, said Edward Bogovich, the officer in charge of the training camp.

The second phase – from Sep.1 to 5 – was dedicated to shooting practice, using the armament on armoured personnel carriers as well small arms, as well as using non-lethal arms. The third and the fourth phase – which will continue until Oct. 16, will be focused exclusively on joint anti-terrorist operations. The training program includes a field convoy mission using the tactics, techniques and procedures employed during the Iraqi Freedom and Enduring Freedom operations, as well as actions in case of attacks with explosive devices, clearing of buildings of enemy combatants, training for response in case of a direct confrontation in a real situation and during patrol and convoy missions, the preparation of humint (human intelligence) recon-naissance groups, of sigint (signal intelligence) groups, and groups for tactical reconnaissance.

Joint humanitarian projects will be carried out during the exer-cises with the participation of a battalion of the U.S. Navy engineers and 55th Engineering Regiment of the Bulgarian Army. The training program will also include medical check-ups performed by mixed medical teams. The medical component of the training exercise will take place in the towns of Sliven, Kotel, Mamarchevo and Mokren. Joint medical teams will visit also the villages of Bezmer, Zimnitsa, Padarevo, Chubra, Grozden, Sungurlare, Slavyantsi and Mokren, where missions will include also an educational aspect. n

Contracts for services for the Bulgarian Panther’08 exercisesA two-year contract for rest and recreation services for a

total of $74,000 was signed with the Caravan Logistics

Company Ltd. Car Rental Bulgaria will provide temporary

transportation in line with a two-year contract worth a total

of $210,000. Fuduric will take care of rest and recreation

equipment, after signing a contract for $47,000.

The equipment is typical for any US military base and was imported from Germany.

The camp has a fitness centre with tennis tables.

The main objective of the exercise is to help US military personnel improve their links with their NATO partners Bulgaria and Romania.

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The European Bank for Reconstruction and Development (EBRD) has provided a 25-million-Euro credit line to Postbank for on-lending to Bulgarian small and medium-sized enterprises (SMEs). The loan comes under the EU/EBRD SME Finance Facility and will be complemented by grant support from the EU to include technical assistance support.

The EBRD and Postbank have been partners since 2003 when the EBRD granted the bank a 15-million-Euro mortgage line. More recently, Postbank also became a partner in the Residential Energy Efficiency Framework and the Energy Efficiency and Renewable Energy Framework. Postbank has identified the SME sector as one of the key areas for its future growth. The loan is intended to enable Postbank to provide mid-term financing of up to 125,000 Euro per client to SMEs, mainly for investment purposes. The facility will allow Postbank to develop a better SME product offering, attract new SME clients and extend the maturity of the funding provided.

James Hyslop, EBRD Director for Bulgaria, said the loan will con-tribute to the successful establishment and development of local SMEs by providing easier access to finance and better services. The EBRD especially welcomes Postbank’s initiative to expand lending to SMEs through tailor-made products for the sector and strengthening the quality of the services offered to this market seg-ment.

“Postbank is very pleased to continue and further expand our partnership with the EBRD,” said Anthony Hassiotis, CEO and board member of Postbank. He added: “SMEs are of the utmost

importance for the continued robust growth and development of the Bulgarian economy. We are confident that this partnership will be of great benefit to Bulgarian SMEs to whom we will continue to provide flexible financing solutions.”

The EU/EBRD SME Finance Facility, a joint programme of the European Commission and the EBRD, supports the development and growth of SMEs by facilitating their access to finance. Under the programme, the EBRD will make available funding of 1.35 mil-lion Euro, of which 1.2 million Euro has been committed to signed projects to date. The EC has contributed 180.75 million Euro in grant financing since the launch of the programme in 1999. n

EBRD Intensifies Support for Bulgarian SMEs

James Hyslop, EBRD director for Bulgaria (left), congratulates Anthony Hassiotis, CEO and board member of Postbank, and Assen Yagodin, bank’s executive director.

A total of 53 teenagers living without parental care from seven

Bulgarian orphanages took part in the summer educational pro-

gram STEP Bulgaria 2008, which ran from June 29 until July 26,

2008.

The program began in 2007 in order to provide underprivileged

youth with useful knowledge and skills for their independent life

beyond the orphanage. This year, the teenagers took courses in

English and computer literacy, personal economics, time and goal

management, and body language. They also had the chance to

meet with professionals from various fields and to participate in

creative and sports workshops. These classes aimed to develop

the students’ analytical and creative thinking as well as to prepare

them for continuing their education or finding an appropriate

occupation. STEP Bulgaria 2008 is a joint initiative of Step for

Bulgaria Foundation, Child and Space Association, Junior

Achievement Alumni Club Bulgaria and University of the 21st

Century. BTC group, a member of AmCham, supported the proj-

ect through purchasing textbooks for the economics courses and

class materials for the students and teachers. In addition, four

BTC employees shared with the program participants insights

from their professional experience and will offer career planning

advice.

Thirty-six volunteers taught the teenagers. These were American

and Bulgarian students, psychologists and professionals. Five inter-

national students, coming from prestigious universities such as

Harvard and Yale thanks to a joint partnership between Step for

Bulgaria Foundation and WorldTeach, were involved in the project.

The rest of the volunteers came from top Bulgarian universities

and high schools such as Sofia University, American University in

Bulgaria, American College of Sofia, First English Language High

School, and others. The program was supported by various public

and private organizations such as the Harvard Bulgarian Club (the

organization of Bulgarian students at Harvard), the Ministry of

Social Affairs, Oxford Centre, EKSA, Piccadilly, Devin, Herlitz

Bulgaria and others. During the first two weeks of STEP Bulgaria

2008, classes were held in a hotel near Varna. For the second

half of the program, the participants moved to the National Centre

for Professional Education – a training site managed by the

Ministry of Social Affairs. For that time the students had com-

pleted courses in Budget Management, the Economics of Staying

in School, Body Language and Goal Management, along with daily

English and computer literacy classes. In addition, they partici-

pated in photography, art and yoga workshops and met with pro-

fessionals from the fields of aviation, painting, and volleyball.

For the last week of the program, starting on July 21, the teenag-

ers had a chance to spend a day with the popular Bulgarian actor

Hristo Mutafchiev. On July 24 the closing ceremony of the pro-

gram showcased what participants have learned and accom-

plished during STEP Bulgaria 2008. n

Bulgarian, U.S. students tutor orphans

John Mystakidis, a senior partner with 20 years of experience in Assurance & Advisory Business Services, has been appointed as the new managing partner for Ernst & Young in Bulgaria effective September 2008. In his new role, Mystakidis will oversee a team of over 190 Ernst & Young professionals provid-ing a wide range of assurance, tax, transaction and advisory services. Mystakidis is one of Ernst & Young’s leading advisors on IFRS reporting and has served key accounts in the seg-ments of Construction, Real Estate and Utilities. He is a member of the Technical Board of the Greek Association of Certified Public Accountants (SOEL) and an active CPA (Greece).

His extensive experience in reporting and issuance of financial statements under IFRS’s as well as in supervising audits, due diligence reviews and other related professional services in large and com-plex clients, will continue to bolster the company’s commitment to client serving excellence. Mystakidis succeeds Panos Papazoglou, who after three successful years in Bulgaria has joined Ernst & Young’s Romania executive team.

“I am very honored and proud to have been selected for this role, and I look forward to working with my colleagues in the Bulgarian practice team to deliver the best quality client service. Especially because it happens in times of challenges and opportunities for Bulgaria. The coun-try has recently achieved one major goal: the EU membership and it is expected to enjoy a steady economic growth, macro-

economic stability and hopefully learn from fast growers to exploit its significant potential and meet the challenges to come,” Mystakidis said.

Panos Papazoglou added: “When I joined EY Bulgaria three years ago, together with all partners we commit-ted ourselves to the effective integra-tion and development of our business in Bulgaria, and we have created the structure necessary to achieve this. The latest positive developments in our structure through the successful

integration of our country practices across Western and Eastern Europe, the Middle East, India and Africa into a single EMEIA Area, will further strengthen our business, and allow us to best serve our clients locally and in the global economy.”

The new Area will be a $11-billion orga-nization with more than 60,000 staff and 3,300 partners. It will operate as a sin-gle unit, led by Mark Otty as area man-aging partner, and a single executive team.” n

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John Mystakidis to Lead Ernst & Young’s Bulgaria Practice

Before his appointment as a country manag-

ing partner for EY Bulgaria practice in

September 2008, John Mystakidis has been

a partner in the Assurance and Advisory

Business Services of Ernst & Young in

Athens, leading the International Financial

Reporting Standards technical desk. He

holds a university degree in Business

Administration with a major in Finance and

Accounting. He is a certified public accoun-

tant (Greece) and a member of the Technical

Board of the Greek Association of Certified Public Accountants (SOEL). During

his 20 years’ career, he has extensively dealt with reporting and primary issuance

of financial statements under the International Financial Reporting Standards

(IFRS) as well as conversion of financial statements to IFRS’s. He has been

involved in handling and resolving complex IFRS issues raised by clients and

regional EY firm practices. He has an active role in client trainings on IFRS and

publications dealing with technical and professional issues in the financial media.

John has also a wide range of experience in supervising audits, due diligence

reviews and other related professional services of major Greek and multinational

companies in a variety of industries. His primary line of expertise in terms of

industry is construction, real estate and utilities. A representative list of his clients

includes ARCHIRODON Group, VIVARTIA, GEK-TERNA Group, ONASSIS GROUP

AND FOUNDATIONS, S&B Industrial Minerals, ROKAS Group, INTRACOM Holdings,

etc. He is married with one child.

Coface Bulgaria CMS is a member of the French Coface Group with its over 50-year experience in the area of credit insurance and credit risk management with more than 150 000 clients in 99 countries on 5 continents. You can get access to information about 7.3 million companies from all over in Central and Eastern Europe at our website www.coface.bg via our new service Free Business Search in the My Icon section. This data give you the opportunity, by ordering a full report on the company you have been searching for, to fully estimate poten-tial business relationships and categorize your business part-

ners according to their credit history and payment reliability. Coface’s reports contain data and facts for protracted default collection. You can also receive an instant credit rating via standard online report or specially selected for you information based on specific criteria. Ever since we put feet onto the Bulgarian market in 1994, we have been developing and grow-ing with one goal - to fulfill the necessity of exact, in time and precise information for Bulgarian companies, which gives us a unique working database and knowledge – a guarantee for an exclusive accurateness. n

Coface Bulgaria Offers Free Business Search Service

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Year One

First previewed in the Fall 2007 edition of the AmCham Magazine, the pioneering official tackle American football team in Bulgaria, Team Sofia, has made great progress in bringing the exciting sport of American football to this country.

Started in May 2007 with several dozen players of unlim-ited enthusiasm and energy, Team Sofia has quickly evolved into a well-organized, serious, and hard-working team. The biggest highlight of the first year was the team’s first-ever official football game against the Istanbul Cavaliers in Turkey on May 18, 2008. Though the game ended in a 20-16 loss against the more experienced Cavaliers, it showed what dedication, hard work, and per-

severance can bring in just a short period of time. Interested fans should stay tuned, because the rematch between these two competitors will take place in Bulgaria in October 2008.

Seizing upon the positive momentum, several of Team Sofia’s managers have taken the all-important next step and have registered Bulgarian Federation of American Football (BFAF) with the Ministry of Youth and Sport. Already, new teams have begun in the cities of Pleven (Bravehearts) and Blagoevgrad (Griffins), and even several members of the U.S. Embassy formed their own amateur team, the Sofia Stray Dogs, to play in the Federation in 2008 and 2009. Finally, BFAF made contact with the Paris-based International Federation of American Football (IFAF), and in June 2008, Bulgaria was accepted as a probation-

Team Sofia Means Business in the Fledgling American Football League

By Tom Sadowski

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ary member with full membership expected in 2009.

Finally, plans are also being drawn up for the next 2008 season when the first-ever Bulgarian Flag Football National Championship will be played. At present, five teams have already signed up with hopefully more to follow. Stay tuned and be sure to visit http://www.teamsofia.com for updates or contact Hristo Gurkovsky at advice@inet.bg for further information.

As the sport continues to grow, Team Sofia sincerely hopes the community’s interest and financial sponsorship will as well. Over the next several editions of the AMCHAM magazine, the team will provide readers with

updates on our latest developments as well as where and when fans can come and see the games. In addition, we also want to provide the reader with a sense about what its like to play on Team Sofia, to work with the players and coaches, and to be a part of something new and exciting in a feature we call “A Player’s Perspective.” In this issue, we hear from Anton Doikov, 23, who joined the team in January 2008. Playing wide receiver and safety, Anton made the first ever “interception” for Team Sofia during the Istanbul game and returned it 50 yards, but unfortu-nately left the game in the first half after fracturing his left arm. Anton’s arm is now on the mend and he is undaunted, looking forward to coming back to the team at full speed. n

“I first became interested in American

football after I came back to Bulgaria

from a four-month “Work and Travel”

program in the United States. I typed

in “American football and Bulgaria” in

Google and days later, there I was,

practicing in the snow and mud with

my future teammates. When I showed

up to practice that January afternoon

I was not sure what to expect, unsure

if I could even pass the first physical

tests, but I did, and then the fun really

began.

The first two or three months of train-

ing could best be described by one

word: mud. Mud running, mud tack-

ling, frozen mud, wet mud, mud push-

ups…. Mud. But for my teammates

and me, it was that adversity that

pushed us and showed us that there

was more in sight. We began to con-

quer our fear of tackling, we overcame

some of our weaknesses, but most

importantly, we did it all together and

helped each other through it all. It

created character and it created team-

work, important features for American

football and Team Sofia.

As the coaches constantly tell us and

sometimes yell at us, “A team is only

as strong as its weakest player,” and

none of us wanted to be that weakest

link, so we pushed ourselves. After

our first flag football game with the

Sofia Stray Dogs in February 2008,

we all realized how complex the sport

was and that we needed to work

much harder to become a good team.

Physical strength was important, but

mental strength was just as important.

In the next couple of months we grew

up not only as players and as a team.

But it was not until the first full

tackle game in Istanbul that we had

the chance to show what we had

learned – to ourselves and to our

coaches.

The Istanbul Cavaliers had played

three consecutive years in the Turkish

League championship and some of its

players had nearly 10 years of experi-

ence playing American football.

Experience was definitely on their

side. But after a very long but fun

overnight bus ride to Istanbul, we were

ready for the friendly pre-game prac-

tice together with them. Once we

started, I was surprised to see that our

level of physical and tactical knowl-

edge was equal, and sometimes even

exceeded, the Cavaliers even after

only one year. I credit that to our head

coaches, Coach Chris and Coach

Thomas and their experience and love

of the game.

Our first game was at noon the next

day. Everyone tried to look calm and

tell jokes, but the tension and excite-

ment was obvious. This was what the

long months of running, tackling, pass-

ing and practicing were all about.

Once the first whistle blew, nothing

else mattered. It was just me, my

teammates, the other team, and the

ball. The first few minutes were the

toughest, especially making my first

tackle and being tackled for the first

time. But most memorable for me was

my first catch, which strangely hap-

pened to be while I was on defense

– an interception! I caught the ball,

looked for a block, and ran about 50

yards up the sideline before being

pushed out of bounds. It was the

moment of a lifetime.

Unfortunately, it was my only moment

that game. Minutes later, while playing

receiver, I was tackled and brought to

the ground in an awkward manner. My

natural instincts forced my arm out to

catch myself and break my fall.

Instead, I broke my left arm.

Surprisingly, my arm did not hurt that

much, but I cannot say the same for

my heart. I was so mad at myself for

using the wrong technique and also

since I could no longer play and be

on the field with my teammates.

Amazingly, while I sat in the ambu-

lance, I was never alone. Different

teammates came by nonstop to check

on me and see how I was feeling

regardless of the play or excitement

on the field. I can truly say I was

never alone.

That sense of teamwork and brother-

hood, well… even that can make the

toughest guy shed a tear. After the

game, I stayed three days in an

Istanbul hospital, had an operation to

repair my arm, and flew back home to

Sofia. Despite the months of work

and only minutes of play, I do not have

any regrets – only a growing desire to

train harder, get stronger, and become

a better player. And oh yeah, one

more thing, to win next time!” n

A Player’s Perspective – Part OneBy Anton Doykov

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Hild Group of companies has

stated its activities more than

two years ago in Hungary and

by now HILD is also represented

in Bulgaria, Romania, Czech

Republic and Poland. Since

being founded in 2007 HILD has become the unique provider

of alternative financial solutions for Bulgarian pensioners.

Clients of HILD keep life-long usage right over property and

obtain HILD club membership. Shareholders of HILD Group

of companies are highly qualified international managers and

experts with an exceptionally large experience in project

investments. One of the leading investment banks worldwide

– Merrill Lynch, London, has stake in HILD and guarantees

solid financial ground of HILD Group business activity. Both

HILD Bulgaria Ltd. and HILD Asset Bulgaria JSC. are man-

aged by Mrs. Diliana Georgieva – Chief Executive Director,

who found the first serious company in Bulgaria to offer new

and unique opportunity for increasing the living standard of

people in the third age through its programs. HILD in Bulgaria

strives to establish itself as a leader in providing financing for

pensioners in exchange of their residential property.

Contacts: Diliana Georgieva

CEO

Tel.: ++359 2 8193 266

E-mail: diliana.georgieva@hild.bg

Address: 7, Shipka Str.

Sofia 1504

Faustina Group Ltd. Main company business is production of

sunflower oil and bio diesel. The company is also designing

and producing equipment and machinery for vegetable oil

extraction. Business units: Industrial. Workshop for manufac-

turing of equipment for vegetable oil extraction build on

10 247m2 and located in the industrial zone of the city.

Vegetable oil extraction plant with capacity 100t/24h . Bio

diesel extraction plant with 50t/24h output capacity.

Chemical. Modern laboratory on the premises of the sun-

flower oil extraction plant equipped to analyze the incoming

material and the ready production

Food & Beverage. Bottled vegetable oil in 0.5l to 5l plastic

bottles sold nationwide in bulk.

GCS Service. Service and parts for the repair and mainte-

nance of industrial oil extraction equipment.

Agricultural. Cultivation, purchase, processing, storing and

sale of agricultural crops – mainly sunflower seeds, rapeseeds

and wheat. The total of agricultural land is 12 000hectars

Contacts: Krassimir Drenchev

Manager

Alexander Stamboliiski 3,

Vratsa 3000

Bulgaria

Tel: +359 92663838

Fax: +359 925858

Email: faustina@abv.bg

Bulgarian VIP Travel provides comprehen-

sive corporate travel services including

reservations for airline transportation, issu-

ance and delivery of tickets at corporate

rates for air and ground transportation,

meet-and-greet assistance, airport-to-hotel

transfers for individual travellers and

groups, special airport and on-board support to people with

special needs and under-aged children travelling alone,

arrangements for the use of airport VIP lounge. As a share-

holder of Radius®–the global travel company, we offer hotel

booking at special rates at 400 hotel chains representing

more than 83,000 hotel properties, and have direct access

to 48 car rental companies. We assist our clients in making

visa arrangements. We provide charter flights, including

chartering business jets and helicopters. As a leading pro-

vider of travel services more than 16 years, we have exten-

sive experience in planning and organising corporate meet-

ings, conferences, and special events. The company has

negotiated special discount rates with all major city hotels,

as well as with the leading hotel properties in Bulgarian

resorts. Tailor-made tours for corporate travellers with a

focus on historical, religious, cultural or other sites.

Contacts: Vladi Alexiev

CEO

Tel.: +359 2 969 3131

E-mail: office@bgviptravel.com

Address: 36, Dragan Tsankov Blvd.

Sofia 1057

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1963 - (June 30th) Lars Johann Yngwie Lannerback is born in Stockholm, Sweden.

1970 - (September 18th) Yngwie seri-ously takes up the guitar after watching a TV news item on the death of Jimi Hendrix. Begins playing in earnest along to artists like Jimi Hendrix and particu-larly Ritchie Blackmore of Deep Purple. Yngwie’s fascination with Blackmore’s music leads to Genesis and then to classical great like Bach, Vivaldi, Beethoven, Mozart and Paganini.

1973 - Yngwie takes his mothers maiden name of Malmsteen.

1978 - Yngwie leaves school after such antics as riding his motorbike through the corridors, he takes a job at a small music store in Stockholm as an assis-tant luthier. It was here Yngwie was to discover scalloped fretboards in the form of 17th century lute. Yngwie decid-ed to try this on his guitars and loved the results so much he’s scalloped his fretboards ever since.

1978-81 Yngwie plays in a number of bands around Stockholm. Members include Jens Johansson and Marcel Jacob. Set lists contain both original material and covers such as Deep Purple’s ‘Highway Star’ and Scorpions ‘We’ll Burn The Sky’

1982 - In an early incarnation of Rising Force a 3 track demo was recorded for CBS Sweden, nothing became of these however. Frustrated Yngwie started sending demo’s out to a number of labels around the world. One was sent to the writer of a column in Guitar Player magazine, this writer also hap-pened to be the label president of Shrapnel Records. Varney was so impressed with what he heard he invited Yngwie to come and join a band in Los Angeles called Steeler. Yngwie accept-ed desperate to get out Sweden and moved to the USA with 2 strats and 2 pairs of jeans.

1983 - Steeler release their self titled debut, the material is generally sub standard but Yngwie’s fretboard antics and sublime solo on ‘Hot On Your Heels’ were enough to secure listeners atten-tion. Frustrated at the lack of talent in the band Yngwie decided it was time to move on.

Yngwie joined Alcatrazz, the new band

from ex Rainbow and MSG vocalist Graham Bonnet. One classic studio album was recorded ‘No Parole For Rock & Roll’, this was followed up by a tour and the release of a live album ‘Live Sentence’ which again showcased Yngwie’s virtuoso talents. Yngwie again became frustrated at no being able to run a band his way and grabbed what originally was a Japanese only solo deal. The results would be released the following year.

1984 - ‘Yngwie J Malmsteen’s Rising Force’ hit the Japan markets and gained such acclaim was swiftly picked up for worldwide distribution. ‘Rising Force’ became perhaps the definitive guitar album of the 1980’s and pio-neered the Neo Classical Metal genre. The album even hit the Billboard top 60 and was nominated for a Grammy! The album saw Yngwie reunite with old friends from Sweden in Jens Johansson (Keyboards) and Anders Johansson (Drums). The 2 vocal cuts featured the classic voice of Jeff Scott Soto, but it was the instrumental tracks like ‘Black Star’, ‘Far Beyond The Sun’, ‘Evil Eye’ and ‘Icarus Dream Suite Op.4’ that made the album so special. To this day its one of the best selling instrumental albums ever.

1985 - The band quickly entered the studio to record the much more song orientated ‘Marching Out’. The album built on the success of Rising Force and a world tour followed. A live video from

this tour was released in the form of ‘Live 85’.

1986 - Line up changes were afoot with Jeff Scott Soto being replaced by Mark Boals. The resulting album was ‘Trilogy’ which remains one of fans and Yngwie’s favourites to this day and includes such classics as ‘You Don’t Remember, I’ll Never Forget’, ‘Queen In Love’ and ‘Trilogy Suite Op.5’.

1987 - (June 22nd) Yngwie has a near fatal car crash, wrapping his Jaguar (as featured in the ‘You Don’t Remember...’ video and in photo on left) around a tree, Yngwie broke the steering wheel with his head. The impact caused a blood clot on Yngwie’s brain which left him in a coma for a week, when he finally woke Yngwie’s right hand was paralysed. It is testament to Yngwie’s dedication and ability on the guitar that he was able to make a full recovery.

1988 - Rock music was the world leader at the time with acts such as Bon Jovi and Def Leppard selling mil-lions of albums. Yngwie’s label saw the financial rewards of this music and demanded a commercial album from Yngwie. What they got was ‘Odyssey’ not only commercial but full of excep-tional songs. The vocal spot again saw a new addition in ex Rainbow vocalist Joe Lynn Turner. The album was a commercial success and spawned the hit ‘Heaven Tonight’. The band went on another world tour this time taking in

Guitar AlchemyYngwie Johann Malmsteen

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the Soviet Union (becoming one of the first international artists to tour the nation), a live video was again released ‘Live In Leningrad’ and a joint live album ‘Trial By Fire’ hit the racks in 1989.

1990 - Feeling that Rising Force was becoming a little stale Yngwie changed the whole line up for his next album ‘Eclipse’. Vocalist Goran Edman and keyboardist Mats Olausson added greatly and the album ‘Eclipse’ con-tained such gems as ‘Bedroom Eyes’, ‘Save Our Love’ and ‘Demon Driver’.

1991 - Unhappy with the promotion from Polygram Yngwie severed links and signed with Elektra.

1992 - ‘Fire & Ice’ was released and contained the singles ‘Teaser’ and ‘Dragonfly’. The album is a superb mix of Yngwie’s classical roots and crunch-ing hard rock. ‘Fire & Ice’ was the first album were Yngwie got to trade licks with a real orchestra on the track ‘Cry No More’. The album sold more than 100,000 units on its first day of release in Japan! A world tour followed again and by June Yngwie had returned home to Miami to begin work on his next album.

1993 - A turbulent year for ‘The Maestro’. Yngwie’s manager Nigel Thomas died of a heart attack in January, March saw Elektra drop Yngwie from their ranks (in the light of the grunge explosion), Yngwie broke his right hand in a freak accident in July and to top it all off Hurricane Andrew damaged Yngwie’s home in August. September did see some relief in the form a new contract in Japan with Pony Canyon records. Serious writing for the next album got underway with a new band of Michael Vescera (vocals), Mike Terrana (drums) and Mats Olausson (keys).

1994 - The troubled year before musi-cally had not hampered Yngwie in the slightest as ‘The Seventh Sign’ proved. The album was Yngwie’s most aggres-sive since ‘Marching Out’ and superb reviews helped it reach triple platinum in Japan as well as shifting many units in the rest of the world. The US market was a bigger obstacle (with Grunge riding high) but this still did not stop Yngwie from reaching his fans even if it meant playing smaller venues.

1995 - Work began at Yngwie’s home on his own home studio. This new envi-ronment saw some of the parts for ‘Magnum Opus’ recorded there as well as at Criteria Studios. ‘Magnum Opus’ saw the line up of ‘The Seventh Sign’

used again this time with the addition of touring bassist Barry Sparks added. The result is ‘Magnum Opus’ which is one of Yngwie’s most overlooked albums but a gem. European tour dates followed and then a record breaking tour of Japan covering an unprecedent-ed 17 cities! Yngwie also grew a beard in this year!

1996 - With Yngwie’s home studio now complete he set to work on a collection of cover tunes that were an inspiration in Yngwie’s formative years. The result was ‘Inspiration’ a superb album of covers from the likes of Deep Purple, Rainbow, Scorpions, UK and Rush. Many former band members were used which gave the album a great fun vibe. A tour followed which saw the return of vocalist Mark Boals and the addition of ex Whitesnake/Ozzy drummer Tommy Aldridge.

1997 - Work began on a new studio album, in came a couple of new faces in ex Abstract Algebra vocalist Mats Leven and legendary drummer Cozy Powell. The resulting album was per-haps Yngwie’s strongest of the 90’s in ‘Facing The Animal’. Back with a new major label deal in the US the future looked rosy. Sadly Cozy Powell was suddenly killed in a car accident in England, this sent shockwaves through the rock community. Yngwie continued with a tour of the world which was dedicated to Cozy and a few words were said on most dates in remem-brance of the classic drummer. Jonas Ostman has the task of filling Powells shoes on the tour.

1998 - The release of ‘Concerto’ showed what Yngwie could really do in a classical setting. Mixing his burning Strat licks to an orchestra showed how well the two combine. Words cannot describe this album so just buy it. This release slightly overshadowed a live album and video entitled ‘Live!’ (also known as ‘Live In Brazil’)- but the live set gained more press acclaim.

1999 - After several months in Studio 308 with Mark Boals, Mats Olausson, Barry Dunaway (bass) and John Macaluso (drums) the results were unleashed in the guise of ‘Alchemy’. The album was Yngwie’s heaviest yet with some of his most frantic lead work in years. The fans lapped it up and the supporting tour was another success.

2000 - The ‘Alchemy’ band minus Barry Dunaway reunited to record the next album ‘War To End All Wars’ which saw Yngwie’s music take an even more brutal direction. The album

was warmly greeted and a world tour in support is continued well into 2001.

2001 - After much speculation Yngwie finally got the chance to play the ‘Concerto’ release in a live setting in Japan. The shows were recorded for a cd / video release which were released late in the year. Musical chairs ruled the roost with a succession of mem-bers for the continuing WTEAW tour, finally some stability was found with Dougie White, Derek Sherinian, Patrik Johansson and Mick Cervino.

2002 - The lineup that completed the WTEAW (minus Mick Cervino) headed into the studio to record ‘Attack’ which saw release in September. A world tour was undertaken to support the album.

2003 - Yngwie tours Europe and Asia in support of ‘Attack’. Yngwie is invited to participate in the US G3 tour with Joe Satriani and Steve Vai. This brings Yngwie a lot of much needed exposure in the US. Sony sign up the rights for the ‘Attack’ album with a 2004 release set.

2004 - Carrying on from the momen-tum gained from the G3 tour Yngwie wastes no time in doing a headline tour of the US to promote the Attack!! US release. Support for the tour comes from George Lynch, which is lapped up by the fans. Yngwie then heads back to Miami for a much deserved rest, rumours of a live album persist.

2005 - Yngwie wastes little time putting together his next studio album, the metal pronged ‘Unleash The Fury’. Again more touring is done in support of the album around the globe includ-ing a tremendous return to the Hammersmith Apollo in London, UK (images below), the first gig at the legendary venue in over ten years. Many who saw the new lean Yngwie on the UTF tour say its the best he has been in years.

2006 - More live dates are played in support of ‘Unleash The Fury’ with a new generation of Yngwie fans appear-ing all over the world. Work commenc-es on new studio album.

2007 - Yngwie appears at the NAMM trade show demonstrating his new revised signature Fender Stratocaster at the Fender booth. The show is broadcasted on you tube to an audi-ence of millions worldwide. Now, the Fender Custom Shop is working with Yngwie Malmsteen on this special proj-ect that will be officially unveiled later this year. Writing towards his next stu-dio album begins. n