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Police have closed off the area around the Central Bus Station in Sofia on Tuesday afternoon, and have evacuated all passengers due to unattended luggage.

The bomb disposal unit was just about to tear the suitcases open when several Asians arrived at the scene explaining that it was their luggage, BGNES reports.

Soon afterwards, traffic in the area has been restored and passengers were allowed to get on the buses. The Asians were detained at a nearby police station where they will be interrogated.

Michael Schumacher is able to communicate with his family by moving his eyelids, and could return home by the end of the month, according to reports.

The Formula One driver has been recovering in a Swiss rehabilitation clinic in Lausanne since June. He has reportedly made progress with his recovery since his transfer there from a hospital in Grenoble, France, to which he was initially taken after his skiing accident on December 29.

"There are signs that Michael will leave the clinic soon and be cared for at home," reported Swiss newspaper SonntagsBlick on Monday.

Schumacher's wife Corinna is believed to have transformed part of their Swiss home into a medical centre, including advanced medical equipment and space for full-time, live-in carers.

Meanwhile, the Mirror has reported that Schumacher is able to answer questions from his wife and children by fluttering his eyelashes.

According to DigitalSpy, Schumacher's colleagues from Formula 1 Lewis Hamilton, Jenson Button and Niki Lauda have written letters of support to him.

Hamilton offered his support to Schumacher in a handwritten letter, saying: "Dear Michael. You are always in my prayers. Prayers of hope that you pull through this difficult time. You have already achieved so much, given so much." He added: "May God watch over you and show you the way back to your family, fans and friends."

Button also wrote a letter to say: "When I think of Michael Schumacher I think of two things.
"The first is of one my earliest memories of being in Formula 1 driving out of the pitlane in Melbourne and seeing Michael's red Ferrari ahead of me scattering the leaves as he drove beneath the trees at the approach to turn three. Even in 2000 he was already a legend.

"The second thing I think about is that familiar red car snaking about in my mirrors. Michael was such a formidable racer relentlessly competitive - Always There.
"He's fighting his greatest battle right now and I know everyone at Formula 1 will hope that he will win again. I certainly hope he will."

F1 legend Lauda added: "Michael, every day I follow the news on your progress and every day I am close to you. I hope I will be able to talk to you very, very soon."

Schumacher's wife Corinna also wrote a letter of gratitude in the official programme for last weekend's race, saying: "The German Grand Prix gives me the perfect opportunity to cordially thank you for all your good wishes and positive energies you keep sending Michael.

None of the big Bulgarian tour operators reported group cancellations due to the recent floods along the Black Sea coast, deputy economy minister Branimir Botev said, Tuesday.

At a press conference, Botev noted that there has been black PR concerning the floods which has been initiated by the Bulgarian media and has spread abroad, however the deputy minister denied information about a decline in the tourist numbers, Bulgarian Telegraph Agency informs.

According to the official statistics, the tourist reservations from Bulgaria's main markets have remained stable. The problems stem mainly from the devaluation of local currencies, said Botev. If there is any decline, it is recorded in the number of last minute offers, covering one fifth of all customers.

Representatives of the tourism industry insist that the Council of Ministers implements its decision to increase advertisement expenses and to allocate BGN 2.5M out of a total of BGN 10M.

Botev announced that the National Tourism Council has adopted amendments to its regulations that allow the meetings to be attended by representatives of Bulgaria's Academy of Sciences and the Bulgarian Orthodox Church in order to assist creating the tourism and tourist products image.

Damages from the devastating hailstorm that hit Bulgaria's Sofia about 2 weeks ago will cost insurance companies more than BGN 100M.

So far, the big companies only have received damage claims for nearly 50,000 vehicles and the average compensation amounts to BGN 2,000 – BGN 4,000, Nova TV reports.

According to the experts, however, the number of cars damaged by the hail is much higher. The deadline for submitting damage claims has almost expired in some of the companies, but most of the insurers will accept claims until the end of the month.

Companies are expected to start paying compensations by the middle of next week. Repairs in the workshops, however, will be done until at least the beginning of next year and there may be delays, Nova TV informs.

The Governor of the Bulgarian National Bank (BNB) Ivan Iskrov said he was ready to resign, in a letter to Speaker of Parliament Mihail Mikov, report Bulgarian-language media. 

In his letter Iskrov expressed his disagreement that “BNB and its governor are being used for pre-election political goals through unacceptable accusaitons” and said that if the parties in Parliament could reach a consensus to elect a new BNB governor by August 6 (when Parliament is disbanded), he was ready to resign. 

Iskrov expressed his indignation that along with the calls for his resignation were said many things “not corresponding to the truth”, regarding the work of BNB in the case with the troubled Corporate Commercial Bank (KTB).

Smartphones and tablets are among the items most frequently bought on deferred payment plans in Bulgaria, shows an analysis of the BNP Paribas Personal Finance company. 

The sales of smartphones in H1 2014 have increased by 250%, year-on-year, shows the analysis. They have climbed to the third position in the Top 10 Items on Deferred Payments list of BNP Paribas Personal Finance Bulgaria – a survey done for the ninth time. 

Tablet sales on deferred payments have increased by 50% over the same period and they have reached the fifth position on the list. 

The most wanted item in H1 was a 40-inch 3D LED Full HD smart TV set, which has internet connections and has social media applications and an average price os BGN 840-890. In previous lists the most wanted item was a 32-inch LCD HD ready television set. 

The most wanted smartphone had-4 inch display, 16 GB built-in memory, HD resolution, 8 Mpx camera and iOS operating system, with an average price of BGN 1290-1340.

The Top 10 Items on Deferred Payments list included the most sought after products, based on the consumer credit applications filed with the company. The current list is based on 184 000 applications, filed in H1 2014. The number has risen by 30%. More than 60% of the applications were for an item on the Top 10 list.

EU Commissioner for Regional Policy, Johannes Hahn, has announced that the Partnership Agreement between Bulgaria and the European Commission is to be signed very soon.

The PA, which will allow Bulgaria to launch EU funds absorption in the 2014-2020 programming period, has reached the stage of "final adjustments" and is to be signed very soon, according to the EU Commissioner for Regional Policy.

"Our negotiations with Bulgaria have reached a fairly advanced stage. Although I cannot commit to a concrete date, I can tell you that I am convinced that we will be able to sign the document very soon," he said, according to reports of the Bulgarian National Radio.

Johannes Hahn has been nominated for a new term in office as EU Commissioner by the Austrian government. On Tuesday he said that he would be glad if he could keep his portfolio for continuity's sake.

The code orange warning for expected hailstorm in Sofia on Tuesday filled up the municipal underground parkings at the metro stations, said the Sofia Municipality. 

According to the estimates, those parkings, which usually are virtually empty, on Tuesday were filled up 90-95%.

User comments on the internet noted that the underground parkings of the Sofia shopping malls were also filled up to almost full capacity, which was unusual for midday on a working day. 

Two weeks ago Sofia was struck by a sudden hailstorm, which caused extensive material damage and killed one man, who was crushed under a fallen tree in the Borisova Gradina park.

Three Bulgarian men will set off for a sailing trip around the world, Bulgarian National Radio announced.

Pavel Doychev, Gavril Gyurov and Dacho Dachev will sail a yacht around the globe in an attempt to promote Bulgaria and its history, culture and nature.

"The idea was for three people, whose total age is 210 years, to do something that has not been done for a long time," Doychev told BNR.

"During our trip, wherever we stop, we will promote Bulgaria, because such unusual trips do not happen often. Although there are infinitely many yachts that sail around the world, this is not a traditional type of advertisement for Bulgaria. We will show multimedia presentations of Bulgarian folklore, traditions, culture, archeology, etc.,” Doychev added.

Together with the State Agency for Bulgarians Abroad, the seafarers will organize meetings with local Bulgarian communities and will make documentaries.

“We have a contract with a TV station. There will be at least 20 films that will cover the trip," Doynov said.

The team will stop in some 17 countries, BGNES reports. The trip will cost about EUR 60-70 thousand, and the yacht which is yet to be purchased, probably by a sponsor, will cost between EUR 50-500 thousand. The three seafarers will bring rose and acorn seedlings in case someone wants to plant them.

The trip will last 1-2 years and will begin on September 15.

he heavy rains and local floods caused pest infestations across the country, reports Vesti.bg. 

According to Ventsislav Boychev, employee of a pest control company, the demand for such services in Sofia increased several times. People were complaining from infestations of rats, cockroaches, wasps, ants, fleas and bedbugs. 

People living in the recently flooded areas are complaining from rat infestations, as the rodents were abandoning the flooded basements.

The head of the Pest Control Association Konstantin Todorov said the unusually wet summer was leading to an increase in tick and mosquito populations, as the rains washed off the repellents, sprayed in the city parks and gardens.

At the end of the first quarter of 2014, Bulgaria's government debt increased by 1.4 percentage points from the last quarter of 2013 and by 2.3 pp from the first quarter of 2013, to 20.3% of the GDP, according to Eurostat.

In the last quarter of 2013 the government debt amounted to 18.9% of the GDP and in the first quarter of 2013 it stood at 18.0% of the GDP.

At the end of the first quarter of 2014, the government debt to GDP ratio in the euro area (EA18) stood at 93.9%, compared with 92.7% at the end of the fourth quarter of 2013. This increase comes after two consecutive quarters of decrease.

In the EU28, the ratio increased from 87.2% to 88.0%. Compared with the first quarter of 2013, the government debt to GDP ratio rose in both the euro area (from 92.5% to 93.9%) and the EU28 (from 86.2% to 88.0%).

The highest ratios of government debt to GDP at the end of the first quarter of 2014 were recorded in Greece (174.1%), Italy (135.6%) and Portugal (132.9%), and the lowest in Estonia (10.0%), Bulgaria (20.3%) and Luxembourg (22.8%).

Compared with the fourth quarter of 2013, nineteen Member States registered an increase in their debt to GDP ratio at the end of the first quarter of 2014, six a decrease and Estonia no change. The highest increases in the ratio were recorded in Slovenia (+7.0 percentage points – pp), Hungary (+5.0 pp), Belgium and Portugal (both +3.9 pp). The highest decreases were recorded in Poland (-7.6 pp), Germany (-1.1 pp) and Greece (-1.0 pp).

Compared with the first quarter of 2013, sixteen Member States registered an increase in their debt to GDP ratio at the end of the first quarter of 2014, and ten a decrease. The highest increases in the ratio were recorded in Cyprus (+24.6 pp), Slovenia (+23.9 pp), Greece (+13.5 pp) and Croatia5 (+9.9 pp), while the largest decreases were recorded in Poland (-7.7 pp), Germany (-3.2 pp), the Czech Republic (-2.2 pp), Latvia (-1.4 pp) and Belgium (-0.9 pp).

Lawmakers in Bulgarian Parliament failed to agree on whether any session should be held until the cabinet of Prime Minister Plamen Oresharski resigns.

The government is expected to step down later this week, with previous reports suggesting it will submit a resignation on Sunday.

Ruling Bulgarian Socialist Party (BSP) Chairman Atanas Merdzhanov, however, told reporters in Parliament was expected "any time".

Neither Oresharski nor members of his cabinet have made public any plans to announce the move at the last meeting of the Council of Ministers (scheduled Wednesday) or later during the day.

Despite agreement reached earlier that MPs will continue their work until Parliament is dissolved on August 6 by President Rosen Plevneliev, two parties, center-right opposition GERB and far-right Ataka, have continued to boycott the plenary hall.

As a result, Bulgaria's lawmakers have failed to reach quorum in their last attempts to gather for an ordinary session.

Socialist members said the resignation could become reality by Friday at the latest, but added the final decision was in the Prime Minister's hands.

Bulgaria is heading for early elections on October 5 and its Parliament is to be dissolved on August 6, after weak results of the BSP caused a rift with its junior coalition partners from the liberal Movement for Rights and Freedoms (DPS), which announced the government would not have its full term in office.

Representatives of Bulgarian agricultural organizations and the Ministry of Agriculture discussed the priorities for the next six-year EU programming period, Tuesday.

The subsidy distribution by sector should be presented in Brussels by July 31, Bulgarian National Radio informs.

Dimitar Zorov, co-chair of the National Cattle Breeders Union told the national radio that the organizations have reached a consensus for the first time.

“All 31 professional organizations in the sector have agreed on the new agricultural policy regarding direct payments and have submitted it to the Ministry. We insist that the maximum subsidies should not exceed EUR 300,000. It is important to emphasize that the calculation of the maximum subsidy will not include wages, insurances and taxes,” Zorov said.

The National Grain Producer Association (NGPA) has confirmed the information provided by Zorov. The Association has often been accused of getting the lion's share of European subsidies. Its members have, however, demanded that the state revokes the promised EUR 1,250 for small farms because the decision is not economically justified.

The Euroroma party posed an ultimatum to the Stara Zagora Mayor Zhivko Todorov the stop the demolition of illegal Roma houses in the city, reports news.bg. 

The party threatened that its supporters will block the major roads in the country, unless the demolition was stopped immediately. According to the party, the actions of the municipality were in violation of a ruling of the European Court of Human Rights, which was mandatory. 

Meanwhile, the Bulgarian Helsinki Committee human rights organisation also condemned the actions of the Stara Zagora city hall and threatened to sue the state. 

According to the NGO, the state was “practicing institutional racist violence”.

The operation for the demolition of the illegal Roma houses in the Stara Zagora Lozenets district continues today. On Monday the municipal authorities, supported by police in riot gear, bulldozed a little over 30 of the 55 condemned houses.

The production of raspberries in northern Bulgaria is regaining momentum and is about to become a principle means of subsistence in the region.

The annual production of raspberries amounts to 8000 tonnes and 80% of it is exported to the Netherlands, Germany and the UK, according to Standard daily.

The highest rates of raspberry production have been registered in the municipalities of Popovo, Loznitsa, and on the territory of Lovech, Apriltsi and Troyan.

The local population in these areas is reportedly hoping that raspberry production will become a principle means of subsistence in the region which will bring back their relatives who are working abroad.

A total of 500 raspberry pickers are currently working in the municipality of Loznitsa, earning some BGN 30-40 a day.

According to Bozhidar Petkov, Executive Director of the Association of Raspberry Producers in Bulgaria, there were no raspberry bushes in the region 10 years ago, while now raspberry plants span an area of over 1500 decares.

According to the Mayor of Loznitsa, Ayhan Hashamov, the production of raspberries is yet to develop in the region.

The segment currently offers hundreds of seasonal jobs and 40 permanent jobs.

Bulgaria's National Tourism Council (NTC) has approved the advertising strategies for Bulgarian tourism, said Deputy Minister of Economy and Energy Branimir Botev, Tuesday.

Botev noted that the participants in the meeting of the NTC were unanimous in the discussion of all issues.

"The industry is united around the idea that Bulgaria should appear on the international forum and that we should promote the tourism industry in an adequate manner", Botev said as quoted by BGNES.

Botev added that by adopting amendments to its regulations, the National Tourism Council is opening to organizations that can greatly assist in forming strategies and analyses. From now on, the meetings will be attended by the Bulgarian Academy of Sciences (BAS) and the Holy Synod, as well.

The real estate deals in Bulgaria in H1 2014 grew by 64%,year-on-year, shows an analysis of the ERA Bulgaria real estate company. 

Due to the bank panic in June, buyers showed increased interest in buying homes in Sofia. 

In Varna and Burgas, however, the deals with Russian citizens dropped by 35% in H1 2014, year-on-year.

The analysis of the real estate company shows that this year the property sells twice as fast, compared to 2013. On average an apartment in Sofia, Varna and Burgas sells for 66 days, while in 2013 it took 120 days.

Georgi Kadiev, known for his usual criticism at decisions of the Bulgarian Socialist Party (BSP), has officially become a candidate to head the party.

Kadiev left Parliament and BSP's National Council in June, after a party session dedicated to poor results at the European Parliament elections this year.

Now he is to seek the office of BSP Chairman, which MEP Sergey Stanishev has announced he will vacate on July 27.

Economy Minister Dragomir Stoynev is seen as a strong contender to get the post, but Parliament Deputy Speaker Maya Manolova and key BSP members Korneliya Ninova, Yanaki Stoilov and Krasimir Yankov are also considered as Stanishev's possible successors.

Kadiev placed his bid for the BSP Chairman's seat in 2012, but was overwhelmingly defeated by then-reelected Stanishev.

On Tuesday, he explained in his Facebook profile that his choice stand for election came after he had received nominations from a number of towns and cities including the capital Sofia, Burgas, Veliko Tarnovo, Razgrad and Pleven.

He also cited his desire to "change the BSP" as a motive.

"I am placing my candidacy so that we can walk the road to a stronger, modern, pro-European left party. I am placing my candidacy so that we return the faith of BSP members in morale. I am placing my candidacy so that we consolidate the BSP around the change and not around the status quo. I am placing my candidacy so that we win elections - something the sensation of which we have forgotten," Kadiev wrote.

Stanishev, who held the office for 14 years, has often been blamed for being unable to secure victories at elections on any level since 2005.

The defense ministers of Bulgaria and Macedonia have expressed their mutual desire and will for cooperation between the armed forces of the two countries.

Macedonian Defense Minister Zoran Jolevski met with his Bulgarian counterpart on Tuesday as part of an official visit to Bulgaria.

Naydenov, as cited by the BGNES news agency, pointed out that Bulgaria had repeatedly expressed its support for the European and Euro-Atlantic integration of the Western Balkans, adding that this was the future of the Balkan region.

He also drew attention to Bulgaria's support for Macedonia's EU and NATO membership bid.

Bulgaria's Defense Minister said that Bulgaria expected Macedonia to stick to the principle of good neighbor policy.

He also emphasized the importance of not distorting history, adding that attempts to do this were steps backward.

Naydenov suggested that the bilateral cooperation in the sphere of defense and armed forces could be an example of good interaction.

During the talks with the Macedonian delegation, Naydenov brought up the issue of the restoration and maintenance of the war monuments and war graves of Bulgarian soldiers who died on Macedonian territory.

It was announced that a group of experts would be sent there to compile a list of the Bulgarian war graves in Macedonia.

In his statement, the Macedonian Defense Minister drew attention to the good relations between the two countries.

He pointed out that Macedonia had a strategic goal of joining the EU and NATO.

Jolevski thanked Bulgaria for the support for the Euro-Atlantic integration of the Balkan countries.

Bulgarians will pay fewer fees when getting a new loan after the amendments to the Consumer Credit Act come into effect as of July 22.

These include the fees for utilization and management, and the penalty interests for repayment of mortgage loans, Nova TV informs.

The changes will apply to existing contracts, too. If a customer repays their mortgage early in the first 12 months of the term of the loan, the fee will be up to 1%. Previously it has reached 5%.

The changes concern the so-called fast loans, as well. The most important change is the new annual percentage rate ceiling - no more than five times the legal interest rate. The penalties for delayed payments will also increase.

There are certain indications of appreciation of credit product elements, but generally the expectations are not for the appreciation of the entire loan, financial analyst Ivan Stoykov told Bulgarian National Radio in connection with the forthcoming amendments to the Consumer Credit Act.

The tourist season on Bulgaria's Black Sea coast won't be worse than last year's, Kalin Sutev representative of the Der Touristik group in Bulgaria, told Dnevnik.bg. 

“The publications about ruined tourist season are completely unfounded,” he said. “It is true that the crisis in Ukraine influenced both the Ukrainian and the Russian markets, but in any case we cannot talk of dramatic drop in the number of tourists from the two countries.”

According to Sutev, those two markets were characterized by last-minute reservations and it was almost impossible to make forecasts. 

“I have no idea where those dramatic statements about the empty hotels came from,” he said. “We're only halfway through the season and it's way too early to make any conclusions.”

France could renounce the sale of a second Mistral-class amphibious warship if EU leaders adopt tougher sanctions against Russia.

President Francois Hollande also announced it depended on "Russia's attitude" to the conflict in Ukraine whether the deal would be carried out, Bloomberg reported.

Commitments to Russia on the Mistral helicopter carriers cannot be entirely neglected, as arrangements had been made about the Vladivostok, a vessels already paid and to be delivered in October.

Made at his annual presidential press dinner, Hollande's comments came as European Union leaders are set to debate on a new round of sanctions targeting Moscow.

Talks follow allegations that pro-Russian rebels, reportedly backed by the Kremlin, downed a Malaysian Airlines passenger jet last week as it was flying over Eastern Ukraine.

All 298 people aboard the Boeing 777 died.

Russia argues Ukrainian planes had passed near the site where the aircraft was last in the air.

France, for its part, has long maintained it would not abandon the mistral deal, against the backdrop of EU-wide debate on the scale of restrictions that should be imposed on Russia over its position on Ukraine.

After French intentions to pursue the contract were criticized by US President Barack Obama back in June, UK Prime Minister David Cameron also slammed the project.

Cameron was quoted by the Moscow Times as saying the it was now "unthinkable" to fulfill such an order "like the outstanding one the French have".

German Chancellor Angela Merkel, on the other hand, believes it is only a decision to introduce economic sanctions that could prevent the deal.

Russia's Deputy Prime Minister Dmitry Rogozin, however, played down threats coming from Francois Hollande, casting a doubt the deal could be canceled.

So far the EU has stopped short of economic sanctions, with personal asset freezes and travel bans being the only adopted measures.

Customers of Corporate Commercial Bank (KTB), including natural and legal persons, will sue the state for the crisis at the fourth biggest Bulgarian lender.

An initiative committee has issued a media statement informing that it will make the Bulgarian National Bank (BNB), the prosecution, the investigative authority and the Interior Ministry liable and will seek compensatory damages.

The authors of the media statement say that they are deliberately keeping the names of the claimants secret because they have been already been subjected to threats and pressure, including by prosecutors and investigators.

They emphasize that the matter involves a number of key enterprises in the military industry and their employees, as well as factories in Ruse, Plovdiv, Pleven, Sopot, Lyaskovets, Varna, etc.

The claimants point out that a number of companies have been unable to use their money, kept as a deposit at KTB or paid out via KTB, for a second month in a row.

"We believe that the ones to blame are the state institutions, which acted inadequately or under pressure, or failed to act in some situations, thereby allowing a certain political-economic circle to launch an unprecedented attack against a credit institution" the letter says.

According to the signatories, the contradictory and manipulative announcements about the condition of KTB supplied by BNB, the prosecuting and the investigating authorities and the Interior Ministry contributed to the current crisis.

The signatories to the letter are filing collective action for compensation for damage to natural and legal persons.

The initiative committee has asked a foreign law firm to defend their interests at the international court in Luxembourg.

They will also file collective action with a district court as a court of first instance.

The initiative committee emphasizes that the destabilization of KTB affected entire sectors of the country's economy, with over 15 000 military industry officials and workers directly affected and no less than 150 000 workers in other sectors indirectly affected.

KTB was placed under conservatorship by BNB on June 20 after customers of the bank withdrew more than 1/5 of its total deposits in a week.

The period of special supervision for KTB has been extended by September 21.

An audit at the bank showed that its activities were "incompatible with the law and good banking practices."

KTB's subsidiary Credit Agricole Bulgaria has also been placed under conservatorship.

Bulgaria's Hail Suppression Agency cannot disperse the gathering thunderstorm clouds for technical reasons due to the direction from which they are coming, Tuesday.

This was announced at a meeting between Sofia Mayor Yordanka Fandakova and the head of the Hail Suppression Agency Nikolay Nikolov.

Fandakova has instructed the district mayors to ensure continuous monitoring of water reservoirs, rivers, dams and critical areas in Sofia, Nova TV reports. The teams of Sofia Municipality and Sofiyska Voda Water Utility inspected and cleaned the gullies on the territory of Sofia, Monday night. The teams of all operating companies have been mobilized, Tuesday.

Code orange weather alert for heavy rain, thunderstorms, and hail has been declared in six Bulgarian districts on Tuesday, while 19 other districts are under a "code yellow" alert.

The code orange alert applies to the districts of Sofia-district, Pazardzhik, Vratsa, Pleven, Lovech, and Gabrovo, according to the National Institute of Meteorology and Hydrology at the Bulgarian Academy of Sciences (BAS).

Two major associations representing employers and the industry sector could announce the first lock-out in Bulgaria's history, a Bulgarian daily reports.

The Confederation of Employers and Industrialists in Bulgaria (CEIBG) and the Bulgarian Industrial Association (BIA), are considering a halt of activities at the tens of thousands of enterprises they represent for an hour.

A lockout would see electricity, communications and transport services severely disrupted or even completely blocked, though this has been reportedly discussed only as a "radical" scenario.

They could threaten to take the step if the government adopts legal amendments allowing the state to guarantee deposits over EUR 100 000 in case of a bank failure.

A move to change the threshold has been on the table since the events at the Corporate Commercial Bank (KTB), which the central bank BNB announced was to be declared insolvent, with its subsidiary Credit Agricole Bulgaria being taken over by the state.

Neither BIA nor CEIBG have commented on the information of website Dnevnik.bg, which cites sources close to the talks between the two organizations.

The unions are due to announce their official intentions on Tuesday or Wednesday.

Proposals to cover deposits going beyond EUR 100 000 have had a controversial reception, with many refusing to back the idea to save larger asset holders using taxpayers' money.

Ruling Bulgarian Socialist Party (BSP) has thrown its support behind a draft bill including changes in that direction, but the opposition GERB has announced it is ready to reject it.

Being the two largest employers' organizations in Bulgaria, BIA and CEIBG claim to represent companies generating between two-thirds and three-quarters of Bulgaria's GDP and also to account for about a million employees.

Creditors of national carrier Bulgarian State Raliways (BDZ) are due to meet Deputy Prime Minister Daniela Bobeva on Tuesday to discuss the fate of the company.

International lenders are expected to elaborate on their refusal to slash Holding BDZ's debt by 30%, Bulgarian daily Standart reports.

Sofia had earlier offered the step and promised to bring forward the repayment period from 10 to 6 years, but its proposal was turned down.

As of end-June BDZ owed some BGN 170 M (roughly EUR 85 M) to the creditors as part of a second bond loan granted in years, with BGN 76 M of them being overdue.

A group of banks lent the money to BDZ, which had pointed the need to repair old wagons and deliver on previous liabilities.

On Tuesday's meeting Bobeva will also discuss with lenders the prospect that the German railway company Deutsche Bahn could take the lead of BDZ and restructure the carrier, merging it will the National Railway Infrastructure Company to form a single holding.

The move could see Germany (which is DB's majority shareholder) enforce its presence in BDZ, the creditors of which are mostly German banks, state-owned KfW and private FMS Wertmanagement included.

Flights over Bulgaria could increase by 10-15% after the closure of Eastern Ukrainian airspace, Europe's organization for safety of air traffic estimates.

However, Bulgarian private national channel bTV argues the figure could rise, as many airlines have decided to avoid passing via Ukraine in the near future.

Ivan Dyaksov, Deputy Director General of the Bulgarian Air Traffic Services Authority (BULATSA), told the channel certain unrest-torn zones of Ukraine "should have been closed earlier," as no-one could ensure flight safety when fighting is ongoing.

Between 150 and 160 flights reach Europe from the Middle East using Ukraine's airspace.

Dyaksov, who manages operating activities in the state-owned enterprise, believes planes will avoid Ukraine "for a long time, as long as the conflict continues".

He added real consequences of air-traffic reshuffle are to be seen next week.

Most carriers now prefer to go around Ukraine after a Malaysia Airlines' Boeing 777 crashed in the eastern part of the country killing all 298 on board.

Both Kiev and pro-Russian rebels mutually accuse each other of having downed the plane.

A "code orange" weather alert for heavy rain, thunderstorms, and hail has been declared in six Bulgarian districts, while 19 other districts are under a "code yellow" alert.

The rainfall is to intensify Tuesday afternoon.

The "code orange" alert applies to the districts of Sofia-district, Pazardzhik, Vratsa, Pleven, Lovech, and Gabrovo, according to reports of the Bulgarian National Television, citing the National Institute of Meteorology and Hydrology at the Bulgarian Academy of Sciences (BAS).

Another 19 Bulgarian districts are under a "code yellow" alert for potentially dangerous weather conditions and only 3 districts, including Silistra, Dobrich and Varna, are under a "code green" with no danger of extreme weather events.

The maximum temperatures in western Bulgaria will reach 25-30 °C and in eastern Bulgaria 30-34 °C.

Balkan drug lord Dragoslav Kosmajac has been arrested in Montenegro's Kotor.

On Monday night, he was questioned by local investigative authorities, according to reports of the BGNES news agency.

Kosmajac has been described as "Serbia's biggest drug dealer" by Serbian Prime Minister Alexandr Vucic.

Kosmajac has allegedly created drug trafficking channels connecting Bulgaria, Macedonia, Montenegro and Turkey to Western Europe.

Kosmajac has also been reported to have connections with the drug cartels in South America.

In the "White Book'' of the Serbian police, he is described as the biggest drug dealer in the country.

Reportedly, he was the drug trafficking link of the Serbian crime group the Zemun Clan.

Dragoslav Kosmajac is reported to have stayed in touch with another drug lord Darko Saric, who was arrested in March after turning himself in to the police in South America, after which he was transferred to Montenegro.

According to preliminary information, Kosmajac will be extradited to Serbia.

Pro-Russian rebels handed over the two black boxes of the Malaysian Airlines' Boeing 777, which crashed in eastern Ukraine on Thursday leaving all 298 on board dead.

Malaysian experts received the flight-data recorders containing information of the time and altitude of the plane when the incident happened and also the conversations in the cockpit.

Hours after the tragic events it was reported the aircraft had been hit by a missile, with Ukraine and US claiming Russian Buk systems had been used by rebels to fire it and Moscow insisting Kiev forces could have shot down the Boeing as it entered its airspace.

On Tuesday Al Jazeera also reported separatists as saying ceasefire within 10 kilometers around the place of the incident would be observed so that a thorough investigation could be carried out.

Earlier, a resolution urging a "full, thorough and independent international investigation" into the accident was adopted by the United National Security Council (UNSC).

It stopped short of blaming any side for the downing, but demanded that perpetrators "be held to account and that all states cooperate fully with efforts to establish accountability."

The text also "demands that the armed groups in control of the crash site and the surrounding area refrain from any actions that may compromise the integrity of the crash site, including by refraining from destroying, moving, or disturbing wreckage, equipment, debris, personal belongings, or remains."

As previously reported by an Australian newspaper, Moscow did not block the resolution, hours after assuring it would not exert its veto rights as a permanent UNSC member if it does not contain direct accusations.

Monday saw the first visit of international investigators sent from the Netherlands to examine the victims' bodies.

Militants operating in the Donbass region were criticized by Ukraine, Malaysia and the West for not ensuring full access to the area of the plane's wreckage.

For days, they also stored some of the bodies in the nearby town of Torez, but eventually agreed that they could be taken to Kiev for an inspection.

The US warned new sanctions could ensue if Russia does not assist in the investigation by pressuring rebels into allowing access to the crash site.

Vitaly Churkin, Russia's ambassador to the UN, declared his country was ready to assist an investigation.

Macedonian Defense Minister Zoran Jolevski is to arrive on an official visit to Bulgaria.

After the official welcoming ceremony in front of Monument to the Unknown Soldier in Sofia, Jolevski will have a meeting with his Bulgarian counterpart Angel Naydenov, according to reports of the Bulgarian National Television.

Jolevski will also meet with Bulgarian Parliament Speaker Mihail Mikov and Atanas Merdzhanov, Chair of the Internal Security and Public Order Parliamentary Committee.

The Ministry of Defense has announced the building of a fence designed to curb the influx of migrants at Bulgaria's border with Turkey has finished.

Over the next days, the Chief Directorate Border Police is take over all sections of the installation, the construction of which had been assigned to the Defense Ministry.

The thirty-kilometer-long fence erected in the stretch between the villages of Lesovo and Kraynovo, in Bulgaria's southeast, was due to be ready early this year, but suffered from a serious delay, partly for bureaucratic reasons, and construction kicked off in January.

In the first months of 2014 it was also revealed the budget put aside for the construction had been seriously written up, swelling from BGN 5.1 M to BGN 9.664 M.

The fence drew criticism from human rights organizations as well, with activists, but also UN representatives, insisting that closing the door to asylum seekers is not a way out of the situation.

Bulgaria and Greece are Turkey's immediate neighbors to the north-west and west, and migrants try to cross into their territory in order to reach EU soil.

But Bulgaria was subject to most of the aftermath of last year's abrupt escalation of the Syrian civil war and the renewed influx of migrants that followed, as Greece had already finished a border fence with Turkey the year before.

Bulgaria's Agriculture Minister is to alert the prosecuting authority about activities of the former chief executive of the State Fund Agriculture (SFA) and his deputy.

Grekov, as cited by investor.bg, made clear Monday that he would submit to the prosecutor's office a request and a report from a probe concerning projects reviewed by the former CEO and Deputy CEO of the SFA.

Grekov, and Atanas Dobrev, who was appointed SFA head last week, gave a press conference to shed light on the results of the in-depth probe at the SFA of the past few days.

Bulgaria's Agriculture Minister reminded that the new management had found 3593 unsigned documents, including around 2000 "deliberately delayed" projects under Operational Program Rural Development, in the offices of the former CEO and Deputy CEO of the SFA, Miroslav Nikolov and Violeta Alexandrova, respectively.

He pointed out that a large part of these documents were not included in the electronic archive.

Grekov stated that the 180-page report listing all violations would be submitted to the prosecuting authority.

Both Grekov and Dobrev refused to disclose concrete violations.

However, the new CEO of the SFA emphasized that his appointment was not politically motivated and assured that his office was open to each and every Bulgarian.

He noted that he faced the serious task of clearing the image of the SFA which protected the interests of Bulgarian cultural workers.

He boasted that over 47 projects worth around BGN 15 M under the Operational Program Rural Development had been signed in just four days.

A gas interconnector with Romania being built since 2012 will not be operational before September, sources close to the construction say.

The 25-kilometer-long connection between Bulgaria's city of Ruse and Romanian Gyurgevo was initially scheduled to be ready in end-2013 at the latest, but the deadline was extended over technical difficulties.

Sources close to Bulgartransgaz, the system operator in charge of the interconnector, told website Econ.bg that a broken pipe going under the Danube river was the reason for the latest delay.

Attempts are now under way to pull the pipe out of the waters, with experts called on site to provide assistance, the informants have assured.

Apart from the link under construction, Bulgartransgaz intends to build another pipeline duplicating the first to boost capacities.

The 2009 gas dispute between Russia and Ukraine prompted Bulgaria to connect its gas grid to those of Romania, Greece, Turkey and Serbia.

In April, Economy Minister Dragomir Stoynev announced building of the link with Greece is to start at the end of this year.

MPs from all political parties have approached the National Special Surveillance Devices Oversight Office, according to the director of the unit.

Boyko Rashkov, as cited by the Bulgarian National Radio, presented Monday a report on the activities of the Office in the first 6 months of its existence.

He noted that the MPs had submitted applications requesting information on the use of special surveillance devices against them.

Rashkov announced that the unit had received a total of 15 applications from citizens who wanted to know whether special surveillance equipment had been used against them, adding that a total of 10 applications had so far been responded to.

He said that the authority had not detected a case of unauthorized use of special surveillance equipment, including in the probes launched on the request of MPs.

He said that the Office had also been contacted by the lawyer of former Interior Minister Tsvetan Tsvetanov, adding that no case of unauthorized use of special surveillance devices had been detected in this case too.

Rashkov declared that the authority had inspected 10 courts across the country, including ones in Vratsa, Pleven, Gabrovo, Lovech, Burgas, Varna, and some of the courts were found to have issued zero permits for the deployment of special surveillance devices.

Rashkov refused to specify the courts which had issued no wiretapping permits.

He said that the data indicated that the number of cases of special surveillance equipment deployment was decreasing over the past 2-3 years.

Rashkov also made clear that the Sofia District Court was currently being inspected.

Authorities are planning to resettle two thousands of people who have been granted refugee or humanitarian status until the end of 2014, a Bulgarian daily writes.

Citing the 2014 draft strategy on refugee integration, the newspaper Sega argues the measure is due to be adopted at a cabinet session on Wednesday, July 23.

Ministers are also expected to approve the financial framework for the strategy, and Sega estimates the money set aside to support the two thousand people is likely to reach BGN 2.168 M (EUR 1.134 M).

The resettlement program is to be carried out under an adopted integration strategy regarding people that have been granted international protection until 2020.

The document envisages that all municipalities should take responsibility for the influx of refugees.

Presently, only a few of Bulgaria's administrative regions are having to tackle issues involving asylum seekers who have been granted status.

Those who wish to be sent to another location in Bulgaria will have to declare their will after receiving a refugee or humanitarian status.

Under an agreement they will have to sign with the state, a six-month course in Bulgarian language, classes on social (and also on professional) orientation will be mandatory, and their children will have to be enrolled in a school.

They will have access to social and healthcare services will the document they have signed is in force.

July 23, when a decision is to be taken on the strategy, has lately been described as the most likely for the resignation of Bulgaria's government, and the meeting of ministers on that day could be their last one while they are in office.

At least 512 Palestinians have died and more than 3000 have been injured since the start of Israel's offensive in the Gaza strip earlier in July.

The data from Hamas-controlled Gaza's Health Ministry came as the UN Security Council urged a ceasefire between the Israeli army and Palestinian militants.

Israelis who have lost their lives within the same period are 20, 18 of them soldiers.

Most of the Israeli death toll came after Thursday night, when Tel Aviv began a ground raid on the strip.

UN estimates reveal 83 695 people have been displaced in Gaza as a result of the events, and also says the figure is constantly rising.

The number of dead is also likely to rise as fighting is now taking place in densely populated urban areas.

The UN Security Council convened on Sunday at the request of Jordan, which had reportedly drafted a resolution on the conflict, as the BBC reports.

UNSC's meeting ended with a call for "an immediate cessation of hostilities".

UN Secretary General Ban Ki-moon was quoted by Al-Jazeera as calling the shelling on Gaza on Sunday, one of the bloodiest days so far, an "atrocious action".

Israeli Prime Minister Benjamin Netanyahu is however adamant that the operation targeting Gaza will continue as much as his country needs to.

On Monday, reports emerged that Shaul Aron, a soldier from the Israeli Defense Forces, had been captured by Al-Qassam, the armed wing of Hamas.

Tel Aviv has denied the information.

The fiscal performance in the first half of 2014 does not require an update of the state budget, according to Bulgarian Prime Minister Plamen Oresharski.

Oresharski announced Monday on Facebook that the risks Bulgaria faced by end-2014 were manageable.

He made clear that he expected better revenue collection in the second half of 2014 due to the introduction of the reverse VAT charging mechanism and the mobile fiscal control mechanism launched in the beginning of 2014.

Oresharski also explained that there were buffers in the expenditure part of the budget.

"However, taking into account the complex political situation, the agreement achieved between the political forces on the matter, and the upcoming change of governments, one of which will function without a Parliament, we proposed a budget update option which strengthens buffers, in order to avoid increased pressure. We discussed such an approach during the political consultations at the President's office," he stated.

Bulgaria's Prime Minister explained that the revenues in the first six months of 2014 amounted to around 46% of the forecast, reaching a similar rate to the ones from the past 4 years, from 2010 to 2013.

He also noted that the budget deficit in H1, 2014 was higher than the rate registered in the same period of the last few years, stressing that the difference was solely due to the expenses incurred for the advance financing of EU-funded projects.

Oresharski assured that the situation would improve substantially over the next one or two months, when the European Commission was to reimburse Bulgaria for the expenses.

A newly founded Cultural Innovation Fund will raise private and public funds for alternative contemporary art, Sofia mayor Yordanka Fandakova announced Monday.

The funds raised from individuals and legal entities will be doubled by the Sofia Municipality, Dnevnik informs.

The project is part of Sofia's bid for the European Capital of Culture in 2019. An application for participation in the second stage of the competition has already been submitted under the motto 'Share Sofia'.

Physical persons are eligible to apply with projects for up to BGN 2 thousand and legal persons can apply with projects worth no more than BGN 8 thousand. Artists' ideas must be relevant to the subject of alternative urban art.

Projects can be submitted in Bulgarian and in English. The deadline for online applications is 23 September, and for paper based applications - on September 24 only.

The transparent use of the funds will be monitored by the Sofia Municipality and the Bulgarian Charities Aid Foundation (BCAF).

Bulgaria is the favourite spot of Russian state officials for buying real estate, shows an investigation of the Russian business publication RBC. 

The RBK journalists have analysed the property declarations of almost 500 Russian MPs and state officials. They show that 176 of them have apartments in Bulgaria. Often they own just part of the property.

Most preferred were one and two-room apartments (187). 

Among the more notable home owners in Bulgaria is Russia's deputy finance minister Alexey Moiseev, who owns two apartment and 50% of a third. The total area is 386 square meters. 

“We are living in the north and the children need to strengthen their immunity,” said Karelia MP Alexandr Fedichev who owns a 84 square meter apartment in Bulgaria.

The most frequent reason for ownership were the need of vacation home for the children, treatment of relatives and wives' whims.

Second most favourite spot for Russian state officials is Spain with 61 owners of 37 apartments and 32 houses. In top five are also Montenegro, Lithuania and Germany.

The remaining 30 other countries – from South Korea to Egypt – lag far behind. 

According to the publication, the real number of real estate properties abroad, owned by the Russian state officials, is much higher, but remained undeclared, because as of last spring they are banned from owning property abroad.

Three police officers have been injured in the clashes that broke out Monday in the Roma district in Bulgaria's city of Stara Zagora.

The conflict between the Gendarmerie and the locals arose due to the forceful demolition of 55 illegally built houses in the city's Lozenets district.

Police officers faced a barricade of building materials and a human chain, Monday morning. Locals were adamant that they will not allow the demolition of any of the houses, some even threatened to commit suicide.

The Roma inhabitants hurled tiles at the officers, and as a result one gendarme and two police officers received minor bruises and injuries. All three have been provided medical care.

Authorities have already initiated proceedings against two locals for throwing objects at the police officers.

Bulgarians will spend BGN 350 M on holidays in Greece in the period May 15 – September 15, 2014, according to an expert from the Institute of Analyses and Assessments in Tourism.

Rumen Draganov, as cited by econ.bg, suggested that some 660 000 Bulgarians would visit Greece in the 2014 summer season.

He also pointed out that around 750 000 Bulgarians were expected to pick Turkey as their holiday destination, spending some BGN 330-340 M there.

Draganov summarized that Bulgarians were expected to spend a total of BGN 690 M in the two countries in the summer season.

He added that some 3.3 million Bulgarians were expected to spend their summer holidays in Bulgaria, generating tourism revenues of around BGN 874.5 M. The expert specified that Bulgarians spent an average of 3 days by the sea and spent an average of BGN 265 per person.

Sources close to the matter informed that Bulgarian families with incomes above the average tended to make several trips in the summer, visiting Greece and the Bulgarian Black Sea coast.

Draganov assured that there was nothing worrying about Bulgarian resorts, adding that the current occupancy rate stood at 87-88% at most resort complexes.

He said that the occupancy rate of the hotels which did not boast a beach front location was around 63%, while guest houses registered an occupancy rate of around 28%.

Draganov claimed that the Black Sea resorts which were stricken by severe flooding a few weeks ago were expected to report very high occupancy rates in end-July, with Albena expected to register an occupancy rate of 98%.

He assured that Bulgaria's tourism sector was stable, stressing that the investments of the business sector and of the state had proved to be exceptionally sustainable.

Roughly one in 10 convicted to jail criminals in Bulgaria is hiding from the law, reports Sega daily. 

According to the report of the Prosecutor's Office, published on its website, in 2013 871 criminals, sentenced to prison terms, have practically disappeared and are being sought, both in Bulgaria and abroad. 

According to official data, the total number of such cases since 1993, has reached 1041. 

As of end of 2012, the number of sentenced criminals, who are hiding, was 891. As of end of 2011 – 997. 

By law, a copy of the guilty verdict has to be transferred from the court to the prosecution must within seven days – enough time for the convict to go into hiding. This, according to Bulgarian law is not a crime, if s/he appeared in court for the sentencing. 

Initially the convict is being sought by the Court Police. If it fails within a month, the case is referred to the Interior Ministry, which issues a wanted order and a European order for arrest. 

The problem with the disappearing convicts gained publicity in 2012 when the Dupnitsa businessmen Angel Hristov and Plamen Galev, a.k.a “the Galevi brothers”, disappeared never to be heard of again. They were found guilty of organising a criminal group and sentenced to prison time by the last court instance. 

Another notorious case is the convicted double murderer Ilian Todorov who in 2013 was sentenced to life in prison for stabbing to death two people in front of the Sofia Solo club. He also disappeared and sent a video in which he claimed he was innocent.

All three are sought by Interpol.

More than 2.5 million people in Greece are in delinquency, with overdue loans estimated at EUR 67.25 B, Greek electronic media outlets report.

Website Ethnos, as cited by the Bulgarian News Agency (BTA), writes that "hostages" to the tax authorities include 2.5 million Greeks whose debts to the state grow rapidly every month.

The continued tax increases, drastic salary and pension cuts, unemployment and bankruptcy of firms in the last 4 years have led millions of households and enterprises into a state of economic deadlock, to illiquidity and the inability to find a way to meet their financial obligations, Ethnos comments.

According to the newspaper Imerisia, it is quite indicative that the value of debts outstanding has risen by EUR 33.75 B since the beginning of 2010.

It notes their increase in the middle of the crisis "chokes" the real economy, severely hampering growth efforts.

Many live in fear that their property may even be frozen.

Each day 4 000 new freezings of property are initiated in the banks, and debts to be paid until the end of the year are valued at EUR 11 B

A solution to the problem with the outstanding debt is among the requirements set by international investors if financing of Greece is to continue.

The Epikera magazine alarms that two-thirds of firms in Greece are in trouble as they cannot meet their obligations.

Epikera specifies that the troubling statistics were presented at a discussion organized by the Central Bank on the topic of rising problematic loans of firms.

Bulgarian President Georgi Plevneliev has assured that the caretaker government will be formed in time and will reflect the urgent tasks which the country needs to address.

Plevneliev told journalists in Plovdiv on Monday that the caretaker government was not supposed to be a panel of randomly nominated candidates, stressing that it had to be based on solid principles and priorities.

Bulgaria's President, as cited by Sega daily, vowed to address the nation and present the tasks of the caretaker government by August 5, provided that the political formations observed their commitments and it was possible to form a caretaker government and dissolve Parliament within the constitutional deadlines.

He argued that the members of the new "ambitious and motivated" caretaker government would set themselves high goals.

Plevneliev suggested that it was too early to specify names of ministers in the caretaker government, adding that principles were more important because the organization of the upcoming early elections was just one of a number of pressing issues.

He vowed to nominate "pro-EU minded democrats" with strong records in the spheres they would represent, stressing that the members of the caretaker government were to be ready to achieve progress on the priority issues.

Plevneliev also pointed out that Bulgaria needed urgent changes in the approach to energy and long-term planning in certain sectors.

He said that Bulgaria had to address the European Commission, boost the level of confidence it attracted, unblock frozen EU funds under two operational programs and fast-track EU funds absorption in the last two months.

Bulgaria's President noted that the caretaker government could have the opportunity to engage in talks with EU authorities on the 2014-2020 Partnership Agreement with the EC and even to finalize work on the document.

Bulgaria's car market has marked a 15.2% growth since the beginning of 2014.

A total of 10 332 new cars were sold compared to 8971 cars during the same period last year, website BGNES reports.

The market has grown 5.6% in the sixth month of the year, with 2052 cars sold compared to 1944 in June 2013.

In the EU, a 4.55-percent growth was reported last month, which means sales were up for a tenth consecutive month, as 1.189 million deals for new cars were carried out in the single European market.

In the first half of the year 6.6 million new cars were sold, which constitutes a 6.5% increase.

Sofia City Court has adjourned the hearing of the case against nationalist leader Volen Siderov who is accused of hooliganism and infliction of minor injuries to a police officer.

The court hearing which was scheduled for Monday, has been adjourned because the defendant was not given the legal seven-day period to examine the indictment and to prepare his defense, and also because the police officer Kostadin Kolev failed to appear in court, Dnevnik reports.

Siderov himself did not come to court today. The hearing is scheduled for October 15 at 10:30 am.

On January 6, Siderov was involved in a row during a flight where he reportedly insulted the French cultural attaché. Later in the shuttle bus at Varna Airport, Siderov continued with his assault, hitting a policeman and a passenger.

The Ataka leader faces up to 5 years behind bars for hooliganism, and up to 3 years in jail for infliction of minor injuries.

A significant part of this year's Bulgarian wheat is expected to be exported through Romania.

The reason is that Romania won a wheat supply auction in Egypt and Bulgaria couldn't participate in it.

Wheat from the Bulgarian Dobrudzha region can easily be bought by Romanian traders, loaded onto ships at Romania's Constanta dockyard and shipped to Egypt, people from the industry say, cited by Standart News.

They remind this isn't the first year where Bulgaria's wheat will be exported as Romanian.

Last year saw a similar situation, as the Bulgarian wheat was much cheaper than the one in the Black Sea region.

Traders used this opportunity to buy big quantities of this cheap and high quality wheat to later export it via Romania and sell it for much higher prices, wheat growers in Bulgaria explain.

This year the government tried everything possible to stop the problem from reoccurring and to allow Bulgarian producers and traders to directly sell to Egypt for a better profit.

"We have to say with regret that despite the big efforts of the Chief Directorate Grain and Grain Products and the Bulgarian Embassy in Egypt we couldn't register the Bulgarian wheat in Egypt and Bulgaria's participation in the auctions, organized by Egypt's state buyer GASC, Directorate CEO Dr. Zlati Zlatev admitted.

Producers are also concerned with the quality of the wheat.

According to Stoyan Stoyanov from The National Grain Producer Association (NGPA) the wheat will have to be dried, which further raises the cost of production.

It is always better to save a systematically important bank than to close it down, Bulgaria's Prime Minister Plamen Oresharski commented on the events at KTB.

In an interview with Bulgarian daily Standart, Oresharski, who has been Minister of Finance in two previous governments, argued the funds needed to shut down the Corporate Commercial Bank (KTB) would exceed estimates so far.

"I keep thinking that the scheme to close the bank is the most expensive among all scenarios," he was quoted as saying.

Confirming previously declared intentions, Oresharski told the paper he would not participate in a caretaker or elected government after stepping down.

He earlier rejected categorically the idea that he could seek to continue his political career, but would return to the academic field instead.

In the interview, he explained he had "private plans" which would keep him away from politics.

He is "optimistic" about the future of Bulgaria, but is worried about confrontation which has become "an end in itself" and and delays Bulgaria's development.

Bulgaria's Prime Minister believes that the cabinet managed to work in an integrational, rather than in a confrontational way.

He described the position that he has held for 14 months now and that he is to renounce this week as "mostly an honor and responsibility".

Regarding debates over the Bulgarian proposal for an EU Commissioner to take over from Kristalina Georgieva at the bloc's executive body, he said Bulgaria "could not have a clear candidacy" due to the ongoing political confrontation.

The head of government also reminded that most EU member states had not yet raised a nomination.

He was firm he would throw his support behind "any Bulgarian candidate" to become the next EU foreign policy chief, regardless of their party affiliation.

Last week Oresharski announced at a Brussels summit, which was to determine who will head the EU's diplomatic service, he would back Kristalina Georgieva as a candidate, after she had been described as a "consensus" option in a number of media outlets.

Ruling Bulgarian Socialist Party (of which right-leaning Oresharski is not a member), however, has refused to stand behind his move, hinting it might propose Foreign Minister Kristian Vigenin as a Commissioner.

Plamen Oresharski and the socialist-liberal government are expected to step down later this week, with Parliament Speaker Mihail Mikov saying lawmakers would be ready to vote the resignation on Wednesday.

The EC has recommended to Serbia to suspend construction of the South Stream Pipeline until it is fully in line with European law, reports BTA quoting the Serbian daily Politika. 

“The EC is not against the South Stream project in principle, as it is important to diversify the natural gas deliveries in the Western Balkans,” said the newspaper. “South Stream is a new way of delivery, but not a new source. The EC is not against the pipeline, but against the manner the project is carried out.”

According to the EC, the South Stream pipeline, just like any other large infrastructure project in Europe, must have strict and clear legal framework, which in this case is still lacking. 

“The EC position on South Stream in Serbia is no exception,” said the EC  statement, quoted by Politika. “Furthermore, not a single intergovernmental agreement on South Stream, signed by Russia, complies with EU law. Our position is uniform both for EU member states and for third countries, such as Serbia. It is in the best longterm interest of Serbia, as a candidate EU member, to comply with EU law with regard the South Stream pipeline.”

Refugee numbers are increasing again, according to Nikolay Chirpanliev, Chair of the Bulgarian State Agency for Refugees.

Chirpanliev announced in a Monday interview for the Bulgarian National Radio that some 500 people entered Bulgaria on a monthly basis.

He claimed that the EU was using double standards towards EU Member States with external borders.

"What solidarity are the European partners showing, taking into account that this year we are experiencing the same pressure as we registered at the end of last year. Migratory pressure from Afghanistan increased substantially and we are expecting such pressure from Iraq," he noted.

He suggested that the principle of shared responsibility did not envisage a distribution according to the geographic location of the countries, i.e. the countries characterized by a high concentration of refugee flows absorbing all of the pressure, but amending the principle to take into account the gross social product contributed by each EU country to the common gross social product.

At the beginning of July, Bulgarian Interior Minister Tsvetlin Yovchev warned that Bulgaria was expecting an increase in refugee numbers due to the complicated situation in Iraq.

He argued that the situation was unlikely to return to normal in the next few months or even years, adding that the issue would be a challenge to the next government too.

Co-founder and deputy chair of Bulgaria for Citizens Movement party Daniel Valchev has resigned, Monday.

In a letter to the party's national council, Valchev explained that his decision was a professional, rather than a political one, Trud Daily reports.

Valchev has recently become a law professor at Sofia University and will pursue an academic career, Nova TV informs. According to the University regulations, he will not be allowed to occupy the post of a political party leader.

Valchev has expressly stated that he strongly supports Meglena Kuneva as the party leader and believes in the success of the Reformist Bloc.

Bulgaria for Citizens Movement is a political party, founded by former European Commissioner Meglena Kuneva in 2012.

Bulgaria's most successful tennis player so far, Grigor Dimitrov, was awarded the title "Honorary citizen of Varna" Monday. 

The municipal council of the  coastal city approved the proposal of the tennis club "Black Sea" with 100% votes in favour.

The motives for title are the recent victories of Dimitrov and his performance in the game against Novak Djokovic in this year's Wibledon tournament. 

After his participation at the tournament, Grigor Dimitrov entered the ATP top 10 ranking and is among the best tennis players in the world. He was a registered player in the "Black Sea - Elite" club that initiated the nomination.

Other people were also awarded the title. It is accompanied by a monetary reward and a commemorative medal.

Moscow has said it is ready to support a resolution at the UN Security Council condemning the shooting down of a Malaysia Airlines Boeing 777 downed in Ukraine last week.

The draft text to be voted Monday will also seek to ensure access to the site of the incident which has been reportedly restricted by armed militiamen, with an international OSCE team prevented to inspect it thoroughly.

It will also call on both sides (Ukraine's government and Donbass rebels) to refrain from foiling the investigation by manipulating evidence.

Another key point will be the dignified treatment of victims' bodies, as it was earlier reported that militants had taken away some of the bodies, forcing Ukrainian emergency workers to hand them without an explanation.

Non-permanent UNSC member Australia, which was among the countries having lost the biggest number of citizens in the crash that left dead all 298 on board, is currently drafting the resolution.

Reports by the Australian Financial Review suggest Russia would not veto the resolution if it does not contain parts blaming the country for the accident, or as Moscow's Ambassador to Australia put it, "as long as it does not blame somebody".

Kiev believes Moscow is behind the downing of MH17 or is at least to be partially held accountable for the plane, as it allegedly deliver the missiles used against the aircraft to the rebels shortly before the incident took place.

Ukraine's stance is supported by US intelligence officials, who claim they have "evidence" to support it.

The West has sought to put pressure on Russian President Vladimir Putin, as a number of countries believe he could use his influence to guarantee that pro-Russian separatists could cooperate to investigators.

The Pirate Bay, one of the most well-known website for downloading torrents of movies, music and software, has doubled its traffic despite being banned in several countries. 

Entertainment industries around the globe have been trying extremely hard to ban / block the most censored torrent website. Denmark was the first country to blackout the website followed by UK and Netherlands. ISPs were ordered to block access to the website for their customers. 

Data of the site administrators, provided to TorrentFreak, shows that since 2011, the traffic to The Pirate Bay has doubled. 

The Pirate Bay did not disclose the number of visitors they have, but the pageviews have run into hundreds of millions. 

A better indication for the effectiveness of the blockades are the number of visitors that access the site through proxies. The Pirate Bay told TorrentFreak that roughly 9% of all visitors use proxies. This percentage doesn’t include sites that cache pages.

This means that a significant percentage of users who don’t have direct access to the site are bypassing court-ordered blockades though proxies.

As it turns out, the United States is by far the biggest traffic source for the notorious torrent site. This is somewhat ironic, as American record labels and movie studios are the driving force behind the blockades in other countries.

A plan to save Bulgaria's Corporate Commercial Bank is in preparation at the State General Reserve Fund (SGRF) of Oman, a fund source argues.

It is expected to be ready within three months, the website Gulf Business quoted the source as saying.

The report follows phone talks held Friday between Bulgarian Finance Minister Petar Chobanov and SGRF CEO Abdulsalam Al-Murshidi.

The two discussed options to solve capital shortages at the Corporate Commercial Bank (KTB), Bulgaria's fourth-largest lender which Bulgaria's central bank BNB is planning to close down, with its subsidiary Credit Agricole Bulgaria being taken over by the state.

Chobanov then announced in a message to the media that the government would provide the necessary conditions to KTB shareholders if they wish to help with capital.

According to the sovereign wealth fund's source, Sofia has agreed "to work with shareholders to provide a feasible working plan within a time frame of three months, as a substitute for the nationalization option".

He stressed, however, that the plan did not necessarily include investing more money into the bank, and also that options such as diluting majority share holder Tsvetan Vasilev's stake, as well as boosting KTB managerial board with independent members, were also on the table.

The prospect that the state could step into Credit Agricole Bulgaria, where "good" KTB assets are to be transferred, has divided opinions among Bulgarian lawmakers.

Current estimates suggest BGN 1.5 to 2 B (EUR 0.75 to 1 B) should be spent to bail out the bank if the government chooses to take that step.

This is far beyond the USD 129 M (EUR 95.3 M) that the SGRF paid to acquire nearly a third of CorpBank.

The Oman State Fund, which is among the state-owned entities concentrating excess oil revenues, has held a 30-percent stake at KTB since 2009.

A Bulgarian team won two gold medals and a silver medal at the 26th International Olympiad in Informatics held on July 13-20 in Taiwan.

A total of 316 competitors from 82 countries took part in the competition, according to reports of Dnevnik Daily, as cited by Bulgarian software engineering services company Musala Soft.

The gold medals were won by Hristo Venev, student at the Sofia High School of Mathematics "Paisii Hilendarski" and Encho Mishinev from the High School of Mathematics "Atanas Radev" in Yambol.

Mishinev also made it into the top 10 contestants on a global scale.

The silver medal went to Momchil Peychev from the Varna-based High School of Mathematics "Dr Petar Beron".

The team, led by Emil Kelevedzhiev and Krasimir Manev, thanked Anton Shikov, Rusko Shikov, Biserka Yovcheva, Velislava Emilova, Pavlin Peev, Galina Momcheva, Petar Petrov, Boyko Banchev and Yavor Nikiforov, who contributed to their preparation for the competition.

Anton Shikov, one of the trainers of the team, drew attention to the exceptional performance of the Bulgarian team, stressing that Bulgaria had not managed to win two gold medals since 2010.

Another success for the Bulgarians was the election of Krasimir Manev as President of the International Olympiad in Informatics.

Road Infrastructure Agency and Avtomagistrali Tcherno More representatives will meet Monday to discuss the payment of the sum due for the construction of the Hemus highway section.

The financial director of the company contractor, Petya Stoyanova, has warned that Avtomagistrali Tcherno More employees are ready to stage a protest on Tuesday blocking traffic on main thoroughfares if they do not receive a BGN 2.4M payment by tomorrow.

The company demands BGN 14M from the Bulgarian state for old works and for the construction of the new section of the Hemus highway, Bulgarian National Radio reminds. Stefan Chaykov, chairman of the Road Infrastructure Agency Management Board, has invited Petya Stoyanova and the company owner Dimo Dimov to attend Monday's meeting.

Avtomagistrali Tcherno More is working on the construction of the Hemus highway stretch between Shumen amd Belokopitovo. So far, the obligations of the state run up to BGN 13-14M, Dnevnik informs. Despite the lack of payment, the company has not stopped working on the highway, but in the last month has slowed down construction works significantly due to the shortage of means of circulation.

The company's employees have staged numerous protests over unpaid salaries, blocking main roads in Eastern Bulgaria.

Three quarters of Bulgarians say that only deposits up to EUR 100 000 in the troubled Corporate Commercial Bank (KTB) must be paid back, shows a survey. 

It was done by the AFIS polling agency among 1273 owners of various bank accounts across Bulgaria. Of them 624 have only a bank deposit and do not use other bank products.

A total of 11.4% said that only deposits with clear origin must be paid back, while 11.9% say that all deposits must be paid back in full. 

Only 2.7% have no opinion on the matter. 

“It is clear that the public supports the law in its current form,” notes AFIS in a statement. “The plans of law amendments and state support for the full payback of all deposits is approved by just one tenth of the people. Not surprisingly, this is the opinion of two thirds of the KTB depositors, who were surveyed. The people with accounts in other banks do not hesitate to say that the current law protects their interests in full.”

At the same time the survey finds that the overall level of trust in the banking system remains high, much higher than in the other institutions. 

The survey also finds that the general public does not buy into the version that money in sacks was taken out of the bank and is more inclined to believe that the institutions are trying to circumvent and cover up the real reasons for the situation in KTB. The majority thinks that the government and the parties messed up, trying to gain the upper hand in some back-room machinations.

If the early elections were held today, six political formations would pass the 4% threshold to enter Bulgaria's Parliament, according to polling agency Sova Haris.

According to the poll, center-right party GERB (Citizens for European Development of Bulgaria) would be backed by 23% of the voters, the Bulgarian Socialist Party (BSP) would receive 15.2% of the votes, liberal party Movement for Rights and Freedoms (DPS) would be backed by 8% and right-wing formation The Reformist Bloc by 4%.

The ABV Movement (Alternative for Bulgarian Revival) of former two-term President Georgi Parvanov would get 2.7% of the votes, according to Sova Haris.

Nationalist parties were shown to stand little chance of entering the 43rd National Assembly, with Ataka getting 1.3% of the votes and the National Front for the Salvation of Bulgaria (NFSB) 1%.

16.6% of the polled said they had not decided whom they would support and 17.7% said they would not vote.

Leader of Bulgaria's nationalist party Ataka, Volen Siderov is to face prosecution in a hooliganism and infliction of minor injuries case, Monday.

The first court hearing will be held seven months after the incident on January 6 when the nationalist leader was involved in a conflict, which started on an airplane, where he reportedly insulted the French cultural attaché. Later in the shuttle bus at Varna Airport, Siderov continued with his assault, hitting a policeman and a passenger who had expressed his outrage at the incident.

Siderov faces up to 5 years behind bars for hooliganism, and up to 3 years in jail for infliction of minor injuries. More than 20 witnesses have been interrogated so far, BGNES reminds.

This was not the first time the notorious Ataka leader has been involved in a scandal. In 2010, Siderov was detained in Germany for stirring a row on a Lufthansa flight.

This week will start with sunny and hot summer weather, but on Tuesday the meteorologists of TV-MET expect a cold front, reports the Trud daily.

It will bring heavy rains and possible thunder and hailstorms in the western parts of Bulgaria. 

By Wednesday the bad weather will spread across the country and will lower the temperatures. 

On Friday the weather will start improving and the weekend is expected to be hot and sunny.

Clashes broke out between the Gendarmerie and the inhabitants of the Roma neighborhood in Bulgaria's city of Stara Zagora, Monday morning.

A total of 55 illegally built houses are being demolished in Lozenets district. By order of the Mayor Zhivko Todorov, their forced removal began at 7:30 am Monday, Nova TV reports.

The owners of the buildings have been notified within the legal deadlines with municipal acts and orders. Still, the tension has escalated leading to clashes between the locals and the Gendarmerie.

Two people were arrested for throwing stones and tiles from the roof of a house. People are adamant that they will not allow the demolition of any of the houses, some even threaten to commit suicide.

The campaign has already been postponed once in May due to failure of police to provide reliable security and order during the demolition of houses. Nearly 1,000 employees of the Gendarmerie are in place in the Roma neighborhood. Several fire trucks and ambulances are on site as well.

The locals have threatened to defend their rights in court, including the European Court of Human Rights. The Mayor Zhivko Todorov has explained that there is no way to legalize any of the 55 buildings, because they are located on the territory of the Borova Gora Park, Bulgarian National Radio informs.

According to the Mayor, only one woman had sought help from the municipality. "We issued an order for her to be accommodated in public housing, however she has rejected our offer. None of the residents indicated that they wants to buy the right to build. If they want to be accommodated somewhere, they must submit the necessary papers, "said Todorov.

The Bulgarian seaside resorts are one quarter empty, even though it's the peak of season, reports the local Standart daily.

According to hotel owners at the Black Sea coast the season was unusually weak and they are forced to offer discount prices in an effort to attract tourists. 

They expect that August, which is usually the busiest month, will be even worse. 

The main reasons for the slow season are the bad weather, the crisis in Ukraine and the claims that the seawater was contaminated with hepatitis, E-coli and other bacteria, which, according to the hoteliers, was “black PR”.

The north coast town of Balchik, which usually attracts Romanian tourists, for example, is about 60-70% full, while at the same time last year 85% of the beds were occupied, according to Desislava Kiryakova, a hotel owner.

The resorts south of Burgas are also unusually empty for this time of year. Last week's local floods and overflowing rivers dumped large amounts of silt and mud into the sea and the tourists don't want to go into the water. 

At this time last years the southern resort towns were “full to the brim” and it was virtually impossible to find a free room.

The hottest topic in Bulgaria's political and economic life in the last month is the situation at Corporate Commercial Bank. It has generated an entire stream of comments, opinions and positions that poured into the media. We turned to the bank's majority shareholder Tzvetan Vasilev, who agreed to give his first interview for a Bulgarian online media outlet since the beginning of the crisis. The editorial team of Novinite thanks Mr. Vasilev for the accurate and comprehensive answers to the questions and is ready to provide room for other views or positions on the issue.

Mr. Vasilev, what possible outcome do you see in the nearest future of the situation you and Corporate Commercial Bank AD are put in?

Corporate Commercial Bank AD and I have been put in this situation as a result of a perfectly organized setup with the participation of certain media as well as employees of the Bulgarian prosecution service and employees of the Bulgarian National Bank who are used as tools by certain political circles. The visible part of the plan involves the destruction of Corpbank and my reputation and the acquisition of Corpbank’s enticing assets, which could be sold to investors of their choice. The invisible part of the plan is the attempt to eliminate the debts of certain individuals supported by these political circles. This elimination could have been carried out either by absolving the debts or melting them away by causing financial instability and subsequent hyperinflation in the country. The scenario of melting debts away by creating an avalanche of bank runs in Bulgaria did not work. Now the masterminds are left with the less ambitious option of absolving only their debts at Corpbank by artificially causing its insolvency.

Since no government official made any attempt to calm down Corporate Commercial Bank’s clients while the run was taking place, it seems likely that the current government gave its tacit agreement to this malicious plot.

The irony in the story is that the same people who put Corporate Commercial Bank AD and me in this situation, or at least closed their eyes to what was going on, have the authority to resolve the case. Now they want to appear as saviors and prove how bad I am and how good they are, so that the truth never comes out. These people are not interested in providing the best solution for Corpbank’s clients or Corpbank’s shareholders because this would jeopardize the initial plan to destroy Corpbank commissioned by the political circles and would reveal what they have been accomplices in.

The irresponsibility towards Corpbank’s shareholders and clients on behalf of the government and the Bulgarian National Bank is quite revealing. When the BNB assumed supervision of Corporate Commercial Bank on June 20th, they decided to close down all operations of Corpbank. Two days later, before they even carried out talks with Corpbank’s shareholders which is standard practice, the BNB announced that it would put Corpbank’s daughter bank under special supervision as well and that it would nationalize both banks. In our case, I hold more than 50% of the capital and the State General Reserve Fund Oman holds more than 30%. My Omani partners almost had to beg for a meeting with the BNB which did not event want to listen to their plan of recovery because they had already decided on nationalization.

Also, BNB preferred to reject a viable proposal by the State General Reserve Fund Oman and to prolong the bank’s closure until September this year while politicians are thinking of a solution, thus betraying Corpbank’s clients. Corporate Commercial Bank is a systemic bank for Bulgaria: it is the 4th largest bank in the country with hundreds of thousands of individual clients and businesses. What will individual depositors do until September when they do not have access to their money? What will businesses do when their money is blocked? Corporate Commercial Bank services around 12% of the country’s GDP.

Mr. Vasilev, these are really serious accusations. It is strange that the national financial regulator and the Ministry of Finance would not choose the best solution for Corpbank’s clients or the banking system as a matter of fact?!

I believe that actions speak louder than words or beautiful promises. In the past month, we have seen how representatives of state institutions, including the BNB, think that spreading false information is OK and act as if Bulgarian or European law does not apply to them.

The Bulgarian National Bank, in particular, has recently become the queen of dual and triple standards, managing to neglect basic legal and economic principles at the same time. In June we witnessed runs on two banks, but the approach of the regulator was not the same. While the run on Corporate Commercial Bank was at its peak, the BNB did not do anything to calm down Corpbank’s clients: they just issued a minor press release. While the run on FIB was at its peak, representatives of the regulator went to the most popular TV channels to explain to the public how it needed to calm down.

Corporate Commercial Bank survived the withdrawal of more than BGN 1.2 B —more than 20% of its assets—and it was still liquid. I would like to clarify that any other bank would collapse under such pressure in 2 to 3 days. Even on the 6th day of the run, Corpbank was making all payments which proves its outstanding liquidity and stability. Had the run continued at that pace, however, Corpbank would have become illiquid—that is why Corpbank’s management requested special supervision.

When Corporate Commercial Bank requested help by the regulator on June 20th after a 6-day run, the regulator did not provide it with liquidity but decided that it would stop all operations by Corpbank. Two days later they announced they would nationalize Corpbank and its daughter bank which did not face a run. They also assigned a detailed audit of Corpbank which was supposed to take place for 10 days. Honestly, this is not serious. How can you complete an audit of even a small company in ten days? In this case, we are talking about the 4th largest bank of Bulgaria with more than BNG 7 B of assets.

What is more, recent revelations by journalists pointed that BNB may have violated its own orders of June 20th as it withdrew more than BGN 30 M on June 25th that were deposited by the state fund that guarantees citizens’ deposits. The BNB may have withdrawn money on June 20th when they assumed supervision. This raises questions about their true motivation in this situation: did they ever intend to help Corporate Commercial Bank?

Mr. Vasilev, if the masterminds of this plot had a primary interest in causing an avalanche of bank runs, what stopped them? Why did the BNB bail out FIB, but not Corpbank? Also, after the results of the audit BNB commissioned came out, the BNB made accusations against you and the way Corpbank was governed. What is your response? Did the BNB adapt a different approach to Corpbank because something is wrong with Corpbank?

The masterminds behind the attacks on Corporate Commercial Bank are in a marriage of interest: they all have different purposes for entering this marriage. The current government is a screen and not the initiator of what happened. I think there are two potential explanations. Version 1 would be that the government was only aware of the plan to destroy Corpbank and they had agreed to it. Once they realized the potential repercussions of a run on a bank avalanche, which would cost them their political career, as no government wants to stay in history as the one that could not prevent a major financial crisis, they decided to contain the damage to Corpbank to whose public execution they had originally subscribed. Version 2 would be that the competent part of BNB raised a voice that what was going on was absurd, so they took some action.

The allegations that something is wrong with Corpbank are deliberately spread in order to find artificial excuses for the forceful and illegal nationalization of Corpbank’s assets. The results of the audit, as announced in the press release of the BNB on July 11th, are simply absurd. The BNB claimed that the files for more than BGN 3.5 B worth of loans were missing and thus it considered them to be bad loans. First of all, it is technically impossible for the files to be missing because all loans are registered at the National Credit Registry of Bulgaria. Also, Corporate Commercial Bank’s balances are verified by an internationally acclaimed auditor—KPMG—and the previous audit by the BNB which took place in 2013 showed that Corpbank has around 2% of bad loans in its portfolio. Even if we hypothetically assume that documents are missing, it does not mean that the loans are not being repaid and they are not backed up by sufficient collateral.

The BNB also concluded that Credit Agricole Bulgaria EAD, which Corpbank acquired on June 12th this year, was ‘a good bank’ and Corpbank was a ‘bad bank’. Had Corpbank been a ‘bad bank’, why did the BNB authorize the acquisition to begin with? Furthermore, why was the good Credit Agricole Bulgaria EAD at a loss for several years and the bad Corpbank at a profit since 2001?

The BNB further claimed that on June 19th I had withdrawn more than BGN 200 M cash from Corpbank and I was draining my own bank, contributing to its decline. This accusation would blow anyone’s mind. First of all, I was not even in Bulgaria at the time. Second of all, how can the physical withdrawal of BGN 200 M, which takes a lot of space by the way, go unnoticed in the center of Sofia? Third of all, an official graphological expertise showed that my signature on the documents, which the BNB found to prove that I had taken that money, were falsified.

Right, but Mr. Vasilev, the prosecution changed the version of the BNB. They explained that the while the accounting documents were finalized on June 19th, you have in fact drained more than BGN 200 M from Corpbank systematically since 2011…

This version is equally ungrounded. Corporate Commercial Bank is the project of my life and I have always firmly stood beside it. Why would I do something that would jeopardize my own business? Since 2011, I have have given up on nearly 100 million of dividends to support the bank. Corpbank’s profit for the last three years of more than BGN 190 M was capitalized since all major shareholders preferred to sustain the growth of the bank, instead of benefiting from their dividends.

Since 2011, I have personally put BGN 86 329 M of additional capital in Corporate Commercial Bank AD and I have provided the bank with a subordinated loan of BGN 56.7 M. Since 2011, Corpbank has paid more than BGN 20 M in taxes. This excludes what my firms and I personally have contributed to the state budget.

Why would the prosecution pursue an accusation if it is ungrounded?

Because some political circles have an interest in coming up with an accusation against me at any price. I would like to remind you that fractions of the Bulgarian prosecution have shown their ability to make theater. The reason why the run on the bank started were unprecedented speculations by some employees of the Bulgarian prosecution service on June 12th and June 13th who produced a thriller with the help of certain Bulgarian media, which published more than 1000 articles spreading rumors about me and Corpbank in the span of a week.

On Friday, June 13th this year media under the indirect influence of Delyan Peevski [a Bulgarian businessman whose family used to officially own media and whose election as head of the Bulgarian secret services in the summer of 2013 brought about protests against the government] and some sections of the Bulgarian prosecution service started a major speculation that I allegedly commissioned a murder plot against Peevski. Three innocent men were publicly arrested, their names and faces shown on TV, and presented as ‘suspects preparing the murder of Peevski’. The first withdrawals from Corpbank AD started shortly after this ‘big news’ circulated in most media in the span of hours.

Bulgarian media and employees of the Bulgarian prosecution fueled the rumor for 5 days, insinuating I was a murderer. While the court refused to declare mandatory measures because it did not see any proof, the prosecution threatened it would appeal. It took 5 days of ‘professional acting’ before the Prosecutor General admitted the prosecution service made a mistake and there was no case to be examined at all.

After this attack did not manage to succeed, in the period June 18th -19th the same media and fractions of the prosecution service started spreading the news that the Head of the Supervisory Division at the central bank of Bulgaria was accused by the prosecution because he failed to exercise his duties which led to a deviation of funds from Corpbank into my companies. Once again, this news was spread in the span of hours and I was ‘convicted’ by most media. This piece of news caused the peak of the run on Corpbank.

It is quite curious that the main conclusion of the ten-day audit of Corpbank was that they discovered accounting documents to prove that I had been draining Corpbank which fitted the thesis of these media from June 18th-19th. But how did these media have the information about the alleged draining in June before the BNB made their audit in July? Also, coincidentally, my signature on the documents that the BNB found and which supposedly proved the draining, was falsified.

Clearly, this is a set up. I argue that it has a strong political dimension.

Media claim that the run on Corpbank started as a result of a rift between you and Mr Peevski. What is the cause of that rift? Does he owe money to Corpbank? There are other rumors that the rift is linked to the construction of the South Stream pipeline?

While there is a rift between Peevski and me, I believe that some media have over-concentrated their attention on it to deviate attention from what is truly happening in Bulgaria. I believe Peevski is used as a tool in the larger scenario to destroy Corporate Commercial Bank AD, acquire its assets at prices below their value, and eliminate the debts of certain people.

The reason for the rift between Peevski and me is that we have a different approach to how business should be done.

Corpbank’s representatives have also pointed out that companies that are indirectly linked to him have loans to Corporate Commercial Bank they stopped repaying, so it could be argued that they have an interest in what is taking place. But they are not the only ones.

Regarding the South Stream speculations, there are a lot of rumors that I am the person who promotes Russian influence in Bulgaria. This is a major misconception. I support all reasonable projects and I have business partners from all over the world—from the US, to Europe, to Asia. All these speculations are fueled because VTB Capital acquired a share of Corpbank several years ago, but people forget that VTB Capital is a reliable partner that has made investments in many European countries.

Last Friday the Ministry of Finance announced that they would give the Omani investors the opportunity to recapitalize Corpbank. Do you consider that the reopening of Corpbank is possible at this stage and does it have enough resources to cover all the demands of the clients now? What further action will you pursue?

I believe that Minister Chobanov’s decision came too late and illustrates the despair and helplessness of the current government to resolve the crisis in Corpbank which it encouraged to please the master puppeteers. This decision should have been taken right after Corpbank was put under special supervision and not now. The State General Reserve Fund Oman had a plan for recapitalization at the end of June.

The government caused irreparable damages to Corpbank, its clients and employees, and generally to Bulgaria’s image before the investment community. Now it wants to transfer the responsibility for its actions and omissions to somebody else. This is criminal in my opinion.

First of all, what bureaucrats do not understand is that businesses and individual clients have daily needs. Their funds have been blocked since June 20th and recently the BNB prolonged the closure until mid-September. Currently, individual and corporate clients suffer enormous losses and inconveniences. I know individual clients who only have accounts at Corporate Commercial Bank—how would they pay their bills, how would they live until September? Also, should businesses stop working for three months: they all have contracts they should execute, employees they should pay, and they should finance their production process, exports, etc., somehow. Who will compensate the clients for the losses and damages?

In addition, through their actions state institutions humiliated Corpbank’s employees who have to feel ‘guilty’ that they did an amazing job and were on the team of one of the best banks. Many of these people have been tortured daily to make confessions of things they did not do or see, so that the thesis of the masterminds is proven. After all, the masterminds made so much noise: they need a scapegoat, so that their tracks are covered.

Third of all, state institutions managed to purposefully destroy Corpbank’s image and to jeopardize the investments in it. Now they are afraid that clients want to withdraw their money from the bank right after it reopens as a nationalized entity or not and they are trying to get out of the embarrassment. That is why they were putting forward absurd, populist measures for a long time.

Generally, the policy of the government towards Corpbank is ‘destroy a house to build a cabin.’ In this case, they destroyed the house, but now they transfer the responsibility for the construction of the cabin to those who built the house. Due to all damages caused by the state institutions, the recovery of Corporate Commercial Bank would be difficult. This, however, does not mean that it is impossible. Since Corpabank was put under special supervision, my mission has been to minimize the losses of our depositors. This may happen through additional investment on behalf of current investors as well as through attracting additional capital from other foreign investors. To realize this, nevertheless, the state should provide certain guarantees. The patience of Corpbank’s depositors will also be necessary.

I also believe that many entities who were shamed by this purposeful campaign will file lawsuits against all tools who helped the puppeteers to realize their plot.

Sooner or later those who were liable for this scandal will face a judge they cannot influence.

Regarding the attempts to fabricate an accusation against me based on the false confessions extracted after torture of witnesses and the falsified documents used as proof of whatever the masterminds have decided, I believe that justice would triumph. For sure, I will fight till the end.

Pro-Russian separatists are still keeping custody of about 200 (out of 298) victims of a Malaysia Airlines Boeing 777's plane crash in Eastern Ukraine.

Kiev officials, but also representatives of the militiamen, say international experts have limited access to the site of the wreckage.

The "Donetsk People's Republic"'s press office declared that the visit of an international team was being put off.

Alexander Boroday, who announced the news, was quoted by ITAR-TASS as saying the inspection had not been canceled on the "republic"'s request, but was more likely to have been advisedly protracted by Ukrainian officials.

Boroday also argued the aircraft's black boxes had been seized by rebels and were now in Donetsk, Eastern Ukraine's fifth-largest city which has been under activist control for months.

Russia's RIA Novosti agency, for its part, reports bodies of victims had also been transported to Donetsk, while the BBC quotes "emergency workers" as saying they are in the town of Torez, near the site of the incident.

Ukrainian National Security and Defense Spokesman Andriy Lysenko says the 196 bodies which emergency personnel from the country had managed to recover had been handed over to the separatists, after the latter forced the workers into doing so.

Michael Bociurkiw, who leads an OSCE (Organization for Security and Cooperation in Europe) mission to the region, explained monitors were allowed "a brief inspection" by armed guards of the Donetsk People's Republic, "the ones in charge of that area".

Kiev and Washington maintain they have conclusive evidence that it was rebels who downed the plane, while rebels operating in the Donbass put the blame on Ukrainian authorities.

US intelligence reports earlier suggested the Boeing-777 had been shot down by a missile, and according to later information it was purportedly fired from a rebel-controlled chunk in the east of Ukraine.

Ukraine President Petro Poroshenko even claims his country has "satellite images" at disposal to prove the separatists' responsibility and also the implication of Russia, with the latter having provided the missile system used to down the machine.

He has also declared intentions to submit an international request that the "Donetsk People's Republic" and the "Luhansk People's Republic" be declared terrorist organizations.

Moscow has denied involvement and has explained Kiev also has the military capacities to target the plane.

Greek Development Minister Nikos Dendias has called on citizens to withdraw their assets from foreign banks and return them the country.

By accepting the offer, they will be exempted from a fine for tax evasion, Bulgarian National Radio (BNR) Thessaloniki correspondent Katya Peeva quoted Dendias as saying.

Greece saw huge-scale capital flight as the debt crisis sparked in the country six years ago, with businessmen and lawmakers putting billions of EUR into financial companies outside Greece.

Previous estimates suggested up to EUR 28 B might have left the country in a few years' time, but the possible amount swelled to EUR 30-60 B, or up to 1/4 the size of the Greek economy in 2008, before the crisis slashed it by nearly a third.

Athens is now reportedly preparing amendments to a law envisaging tough sanctions for tax evaders, with changes drafted to lure the money back to the country.

Former Defense Minister Boyko Noev argued 90 percent of assets held by Bulgaria's military industry are stored in Corporate Commercial Bank (KTB).

Noev, who has held the office two times (1994-1995, 1999-2001) explained in an interview with Bulgaria on Air channel that a deal among foreign-owned banks prevented them from working with the Bulgarian arms business.

KTB, Bulgaria's fourth-largest lender and the second-largest domestically-owned bank, is facing suspension of license from central bank BNB, and its subsidiary Credit Agricole Bulgaria is to be nationalized.

In Noev's words, UniCredit Bulbank, Reiffeisen and Allianz, which are among the largest banks operating in the country, have seen a ban to receive military-rank officials or affiliated companies imposed by the management.

"In normal states, banks are not canteens... or usual firms, they are an element of statehood and security. Every attack at them is an attack at security," he added.

He described a state intervention to guarantee customers' savings in cases such as KTB as a "necessary step".

The Bulgarian National Bank, and also the government, have pledged to safeguard customers' deposits up to EUR 100 000, the amount guaranteed under the law.

Ruling Bulgarian Socialist Party (BSP), however, has already proposed that laws be amended to "save" even the sums beyond that threshold.

The town of Veliko Tarnovo is to apply for the inclusion of its natural and historic landmarks into the UNESCO World Heritage list.

It will seek to place there its famous hills, where monuments dating centuries back can be seen, and the meanders of the Yantra river running through the town.

Six Middle-Age churches and village of Arbanasi, a popular tourist destinations, are to be proposed as a "group of monuments".

Officials hope the move could also draw funds to conserve significant cultural and natural venues.

With its name translated as "Great Tarnovo", it was the capital of the Second Bulgarian Empire (1185-1396).

Bulgaria without Censorship (BWC)'s deputy head Angel Slavchev is leaving the party which was recently established by MEP and former journalist Nikolay Barekov.

Slavchev was first known to the public for being among the spearheads of the February 2013 protests over living standards.

In an open letter to the media, he explained he was withdrawing his trust from Barekov and made a number of accusations targeting the Chairman.

He also criticized the leader over allowing the penetration of "DPS-affiliated" people into BWC's local party structures, a process allegedly facilitated by BWC Secretary Stefan Kenov.

Slavchev believes Barekov is a "puppet" of controversially perceived Movement for Rights and Freedoms (DPS) MP Delyan Peevski, whose appointment at the state security agency DANS (later renounced) triggered widespread mass demonstrations in the capital Sofia last summer.

Also according to the text, Barekov and Peevski hold phone conversations "every day".

"It has been nearly a years since Bulgaria without Censorship is part of the political reality in Bulgaria. Its leader, Nikolay Barekov, was elected MEP in the [European Parliament] elections on May 25," the letter reads.

"In many of his appearances he speaks of the prosperity and future of the country, makes high-flown promises, introduces himself as the next Prime Minister, distributes ministerial seats, allocates money, "fixes" healthcare, threatens corruption with the "Clean Hands" operation [a BWC initiative to put the possessions of all high-profile politicians under scrutiny], points a finger at politicians [saying] he will send them to prison, etc.

At the same time, inside BWC there are ongoing processes showing quite different intentions which have nothing to do with beautiful promises."

Slavchev also describes as "the strangest and shameful thing" his allegation that "Nikolay Barekov is not the real leader of BWC," but is "a mere puppet... directed every day by DPS MP Delyan Deevski".

Created in order not to be a leader-type party, it turned into a dictatorial one," the former activist argues.

With his letter he also informed he was both resigning as Deputy Chairman and quitting the party.

BWC later responded to Slavchev's comments.

It described his claims as "manipulative" and explained Slavchev has not been in its leadership "for the last months," a period in which his membership is said to have been "only formal, after he withdrew from party life and voluntarily stopped participating in the work of the party and its structures."

Barekov's organization also accuses Slavchev of trying to build parallel party structures and maintains he decided to leave the party after failing to gather support for his actions.

The former civic rights activist joined BWC in February this year, eleven months after co-founding the Movement for Civic Control alongside Doncho Dudev and Yanko Petrov, the three most popular participants in the February 2013 protests.

BWC was also set up last year, with journalist-turned-politician Nikolay Barekov promising to overhaul the political system and eradicate the old-party elite during his tour on Bulgaria that continued for months and was described by some as a permanent election campaign.

The Black Sea island of Saint Anastasia has been visited by nearly 15 000 tourists since it was first open to visitors on May 15, officials say.

Trips to the venue have been booked for weeks ahead, Focus News Agency quoted Kristina Valcheva, in charge of tourism at the nearby city of Burgas, as saying.

Interest in visiting the place is still on the rise and is likely to be maintained in August despite the recent bad water, which has forced authorities to put off boat trips a few times over the past weeks, Valcheva believes.

St Anastasia is the first Bulgarian island turned into a tourist destination.

Lying just off the coast of Burgas, the island can be reached three times a day.

Apart from its natural beauty, it also offers archeological and historical sites.

Its guest house has only nine beds, but monastic cells could also be used to spend the night there.

Herbs and fig jams made of products that have grown on the island are also enjoying popularity.

The island was used as a political prison during the Communist era.
A boat reaching the island is available three times a day and leaves from the pier in the Burgas Sea Garden.

On August 15, St Anastasia will celebrate its festive day as the Church of the Assumption of Mary will mark the Orthodox event with the same name.

The Burgas Municipality has promised that a special program to celebrate the day on St Anastasia is in preparation.

Ukraine's President Petro Poroshenko announced his country is preparing international requests that the Donetsk and Luhansk "republics" be considered as terrorist organizations.

His words come after a Malaysia Airlines Boeing 777 crashed in eastern Ukraine, where pro-Russian rebels have held towns and cities under their control since early this spring.

All 298 passengers are confirmed dead, with 192 of the victims coming from the Netherlands.

The list issued Saturday by Malaysia's government also included 43 Malaysians (including 15 crew), 27 Australians, 12 Indonesians and 10 Britons (one of them with dual South African nationality), 4 Germans, 4 Belgians, three from the Philippines, and one each from Canada and New Zealand.

Some reports, including by US intelligence officials, suggest a missile of unknown origin was shot at the plane.

Ukraine immediately claimed that rebels were behind the incident, while Russian President Vladimir Putin pointed a finger at Kiev saying the country was responsible for the unrest in its east.

Rebels themselves argue Ukraine could have downed the aircraft.

Dutch Foreign Minister Frans Timmermans traveled to Ukraine to discuss the international investigation that is to be held to find out the reasons for the crash.

After informing Timmermans of an attempt to foil an ongoing probe carried out by Organization for Security and Cooperation in Europe (OSCE) observers at the site of the crash, Poroshenko assured him Ukraine would not "tolerate" any interference in the investigation.

He reiterated his country's stance that the self-proclaimed "Donetsk People's Republic" and "Luhansk People's Republic" and their leaderships were involved in the incident.

"I am convinced that terrorist should be necessarily tried," Russia's ITAR-TASS agency quoted him as saying.

EU and US officials are seeking to pressure Moscow into securing unhindered access to the place where the Boeing 777 crashed.

They urge Russia to exert its influence on the Donbass rebels so that those in charge can explore the site untroubled.

Kiev officials, for their part, accuse pro-Russian militiamen, which were reported to restrict monitors' movement around the area, of attempting to destroy evidence of an "international crime".

The BRICS countries have been subject to a vast number of puns over the years – obviously including the title above. After the Brazil summit of the five emerging economies, the parallel with clay blocks seems reasonable, though. Messages recently emanating from BRICS leaders could be designed to convey the impression that their ambition to curb what they describe as “Western hegemony” and seek mechanisms to reduce developed countries’ influence should not be perceived as mere empty talk. But in what aspects could their cooperation bear fruit? In this article, a less discussed field of their relations will be briefly explored: defense, and mostly the defense industry, where issues of security, economy, trade and prestige meet.

Brazil, Russia, India, China, and South Africa are alike in that, wherever they are on their economic way as “emerging” markets and “developing” powers with a “strengthening” international voice, they are undergoing changes within their military and seeking an assertive role on the world’s military scene. All of them have seen their technology being upgraded and defense expenditures rising over the past years.

But do the BRICS pursue common interests in the military sphere? Or are they at least looking in the same direction? We will outline here some basic features which can be observed in each one’s defense sector. Far from being a thorough analysis, the text will consist by and large of an overview of defense spending and a summary of some latest developments within the military industry (especially regarding equipment) to see if the five countries have good enough basis to cooperate.

Brazil: A Regional Power Should Have Its Own Defense Industry (Military-Building at Home)

Brazil has kept setting aside a relatively steady percentage (1.5-1.6%) of GDP for defense spending over the past decade. Economic growth, hampered as it might be by the 2009 crisis, continues above 2% for that period according to World Bank estimates - which means military expenditure is also growing. Brazil has also planned to gradually boost it to 2.2 percent by 2030.

The USD 31.5 or 34.7 B (data by parallel projections) Brazil allocated to defense in 2013 places the country 12th and 10th respectively in world's Top 15 of military spenders. This makes it only the fourth-largest among the BRICS, but the numbers are strange enough given that it does not claim to be facing threats or any kind of challenges from powerful or populous neighbors, as Russia, China and India do. Unlike Russia, China or India, Brazil does not rank as a top importer or exporter of arms and does not have large per-capita strength of its military. Being a regional power, Brazil also seems to be rather both self-focused on military development and (as government plans say) poised to spend a certain part of its USD 241 B of the 2012-2017 framework precisely on modernization. This process will mostly benefit the protection of the country’s huge natural resources, but has also been envisaged to ensure security at the recent 2014 World Cup and the forthcoming 2016 Summer Olympics.

A relatively small part of the money (7.5 percent in 2012) is allocated to procurement of foreign defense technology which later enables domestic construction and might also lead to domestic development - and the aeronautical industry is a good example. Most of the armory in stock is either US or European, mostly German and French. Emancipation, however, underpins defense-deal policies, as the government has set out the condition that OEMs (original equipment manufacturers) that win procurement tenders transfer technology to local companies so that equipment itself is made in Brazil.

The active air force includes many French and US units, but Brazilian Embraer and Helibras have now produced most of the aircraft in stock; and will certainly continue to do so. Apart from obsolete US F-5 fighters dating back to the 1960s and 1970s and 12 French-made Mirage-2000 planes, 50 Brazilian-Italian AMX assault aircraft and nearly 1000 Super Tucano light attack, the country has long considered its combat capabilities (and equipment manufacturing capacities) as running below the potential displayed by the recent economic miracle. Now it will equip its air force with 36 JAS 39-NG Gripen fighters from Swedish manufacturer Saab. The deal worth USD 4.5 B was signed months after Brazil made clear it would reject a Russian offer among others from France and the US – just as it showed reluctance about a proposal by Russia that the two countries jointly develop a fifth-generation fighter. Saab is to have, on the other hand, limited participation in construction: on July 11 the specialized website Defense News quoted the company’s CEO Hakan Buskhe as announcing Brazilian firm Embraer would be in charge of "most of the development" of the Gripen F. In a similar fashion, while most of the 469 tanks in the Brazilian Army are either German or US-made, it does engage in their construction, apart from developing its own armored vehicles. In April 2013 Brasilia struck a deal to purchase 34 used German tanks which were to be delivered before the international sports events and also ahead of Pope Francis' visit in July that year. Brazilian firms, however, are commissioned most of the construction.

Saab JAS 39 Gripen F was picked as Brazil's choice in a hotly contrested tender to modernize the Brazilian aircraft fleet. Photo by EPA/BGNES

Brazil seems to be becoming more and more assertive as home to OEMs, as its aerospace concern Embraer S.A., one of the world's leading aircraft makers after Airbus and Boeing (though still trying to secure the third place from Canada's Bombardier), announced on May 20 it was on the verge of assembling its KC-390 military cargo plane in a new hangar at a ceremony attended by President Dilma Rousseff. Embraer is now also officially tipped to carry out a USD 3.3 B worth contract replacing Brazil's US-built Hercules cargo planes with 28 KC-390 over the next decade. Apart from fulfilling the needs of its armed forces, Brazil does not hide its interest in offering its defense product (or that of a company which the government formerly owned and in which still has a share). Embraer is thus gradually expanding its presence in the defense industry, with 20% of its 2014's sales expected to be of military units. The Wall Street Journal quoted Jackson Schneider, chief executive of Embraer Defesa e Seguranca, as saying that the company has intention letters to sell 32 KC-390 to countries like Chile, Argentina, Portugal and Colombia, but also others which he refused to name. Schneider also believes "few countries in the world can experience the pride of operating aircraft that were specified, developed and manufactured on their own soil."

Russia: A New Old Superstate and Top Arms Exporter?

Russia has the world's fifth-largest army of 1.04 million active troops and more than 2 million reserves. But the brief war Moscow fought in Georgia's Abkhazia and South Ossetia exposed long-standing issues of its military, which proved to be ill-trained and ill-equipped and not quite satisfactory in terms of reconnaissance and logistics. This triggered plans to carry out a large-scale modernization which were announced in late 2008 by former Russian Defense Minister Anatoly Serdyukov. Estimates made two years later saw its military possessing outdated hardware, as only 10 percent of it could meet modern standards. The Kremlin has now set aside substantial amounts of money to change that.

It is boosting the 2011-2020 arms budget by 46 percent, or to a total USD 620 B (it was USD 87.8/68.2 B in 2013, according to SIPRI/IISS, respectively). Such a target will not be difficult to match: a considerable increase in the military budget had already been observed in the early 2000s, when President Vladimir Putin came to power, with the USD 32.4 B set aside for defense in 2005 having jumped to USD 69.3 B in 2014 (and becoming the world’s third-largest military expenditure after US and China) and expected to grow to USD 93.9 B in 2016. If achieved, this would be a nearly threefold increase in slightly over a decade. '

Moscow does not hide its ambitions to outpace the US as the biggest exporter by 2020 and its working towards that goal, with arms deals on a global level amounting to 27% of the total in 2014, just two percent behind the United States. It sells arms valued at hundreds of millions of USD each year, with weaponry for other countries reaching USD 15.7 B in 2013 and topping USD 2 B just in Q1 of 2014. Alexander Fomin, the head of the Federal Service for Military-Technical Cooperation, was quoted as saying on Monday that the outstanding orders of the country were estimated at USD 47 B.

It is hard to dismiss Russia’s penchant for defending hard power as a basic principle in international relations: in 2014 the Ukraine crisis reminded of that feature, which is also discernible in the ongoing civil war in Syria, since Moscow has occasionally assisted its allies in Damascus in clinging to power. In its communications with the world, the country displays readiness to stand up for its own (and other countries') independence from Western pressure as well. That notwithstanding, it knows the Cold War has been long over and commercial relations with “the West” are thriving in the military sector. Apart from German equipment, Moscow has also lately purchased French one, with a recent controversially perceived deal on two Mistral-class assault ships dividing opinions amid the Ukraine crisis.

The Navy Mistral amphibious assault ship `Sevastopol` is seen during the descent of the water after a construction of the Baltic shipyard in the Russian city of St. Petersburg,30 April 2014. Photo by EPA/BGNES

Nor does the Kremlin refrain from trade with the US, as a canceled 2013 deal shows: in a move experts had previously described as unthinkable, Washington was on the brink of buying 15 Mi-17 helicopters (they would have been added to another thirty delivered by Russian company Rosoboronexport under a previous contract) at a time when the White House was vehemently accusing Russia of supplying the Syrian regime with weapons that the regime used against its people.

Russia’s main arms export partners are two BRICS countries, China and India, with the latter accounting for about a third of all the military equipment sold by Russian companies. Both are still dependent on their weapons, though they are also seeking to boost their own industries and achieve self-sufficiency. They look at trade in arms with Russia as mostly business rather than cooperation, and Moscow is a useful partner until they manage to emancipate themselves.

India: Ambitions Match Demographic and Economic Weight

With its global eighth place in terms of military spending, India has topped the list of the world's largest arms buyers since 2010, when it outpaced China. It allocated over USD 47.4 (or 36.3) B to the sector in 2013, a sum exceeding 2 percent of its GDP for that year (albeit constituting a considerably lower share of the economy than in previous decades). India perceives security as a key priority, since it has territorial disputes with five neighboring countries, including claims to China and multiple wars and military conflicts with Pakistan in the past few decades. Threats, and also military rivalry with China and Pakistan, could have been among the factors underpinning the decision to bolster defense expenditure by 12% for the fiscal period leading into 2015 compared to the previous one.

Russia plays quite a significant role in weapons deliveries to the country, with USD 4.78 B worth of arms and equipment sold to Delhi in 2013 alone. The data suggests Russian-based imports to India leapfrogged about 50% compared to 2012, when they were at USD 3 B. In that year, bilateral trade saw a historic event, as India received from Russia the second nuclear-powered submarine ever exported by any country.

But as the Financial Times wrote in February, India is now also the United States' biggest customer. The paper has described India as 'the most enthusiastic buyer" of US-made equipment, with expensive Boeing C-17A strategic transport aircraft and P-8I Maritime Patrol Aircraft helping it to replace Saudi Arabia as Washington's most precious client. Just between 2009 and 2013, American imports rose from USD 237 M to USD 1.9 B. The paper quotes IHS Jane's Defense Weekly magazine’s expert Ben Moores as arguing India needs American technology to address its "big capability gap" with the Chinese. The world’s second biggest country certainly has a lot to catch up: while it has been able to develop land forces' weapons and equipment on its own (even though a vast part remains from the Soviet-Union era), the inventory of its navy and air force is either Soviet (and outdated) or mostly European, with the clear exception of predominantly Israeli-made drones. Delhi will therefore place a major emphasis on its bid to finally produce its own fighter jet, a move which, if successful, could jeopardize Russia's long-standing presence on the Indian arms market. The New York Times estimated, as of March this year, that the world's second most populated nation had commissioned equipment worth USD 39 B to Russia at that moment. The paper also quoted former Indian Defense Minister A. K. Antony (in office at the time when the article was written) as declaring at a defense industry conference in the country that reliance on foreign imports must come to an end: "A growing India still depending on foreign companies for a substantial part of our defense needs is not a happy situation."

While some argue what impedes equipment improvement through joint projects with foreign companies are mostly quality issues, others blame the government's decision not to allow a company from another country to own more than 49% of a factory (until earlier in July, the cap was officially even lower - at 26%, and Finance and Defense Minister Arun Jaitley raised it in an attempt to provide incentives in the sector).

Easing of restrictions to foreign investors has become possible after Prime Minister Narendra Modi assumed office earlier this year. The recently-appointed Modi, on the other hand, has firmly spoken of his ambitions to enhance India's role as a global military power, and as a global nuclear one as well. Modi also deems it vital to wipe out bureaucratic hindrances, corruption in public procurement and obstacles created by state-owned OEMs preventing the sector from further investment-driven development.

Some reports suggest the visit of French Foreign Minister Laurent Fabius (1-L) to India and commitments Modi (2-R) stated on meeting him in early July enabled the deal in which Delhi aims to acquire French fighters to go at a faster pace. Photo by EPA/BGNES

A deal with France worth USD 15 to 20 B, through which India is to acquire 126 Dassault Rafale fighters, but which had been in the making for years before commitment to it was restated in end-June, was going at a sluggish pace mostly due to India's manufacturing requirements, including recently lifted obligation of companies to carry out at least one-third of their manufacturing within the country, a need many OEMs believe pose a challenge, as doubts raise about production efficiency.

China: Should the World’s Future ‘Most Important’ State Have the Strongest Army?

India's military spending lags far behind China's, as the funds Beijing spent on defense last year was three times that of its neighbor.

With some USD 188 B (SIPRI) or USD 122 B (IISS) worth of military expenditure in 2013, China is by far the second-largest spender - outpaced by the US (USD 640/600.4 B, respectively), but with other countries lagging behind by tens of millions. The amount is just 1.4 percent of the Chinese GDP (also the world's second-largest), but the numbers hide the underpinning trend of China to develop technologies - for both "domestic" use and exports on the world market. Even before the country engaged in the renewal of a number of old territorial disputes with neighbors such as Japan and Vietnam, it showed assertiveness at the 2012 Chinese People's Political Consultative Conference, or the National People's Congress annual legislative meeting, in Beijing. The outgoing leadership then claimed China was on the road to becoming Asia's biggest naval power.

China obtained in 2012 its first aircraft carrier, Liaoning-16 (a Soviet-made vessel originally called the Varyag) and is planning to build more.

In terms of arms and equipment development, China is undoubtedly working toward that goal, since it has been constantly improving production capabilities. Over the past years, fighter jets, drones and sophisticated military machines were placed onto the Chinese weapons pipeline, where previously small arms had been the main items. This led to a surge in exports, which were boosted by 162 percent between 2008 and 2012 if compared with the five years before that. This helped the country to jump two places (3th, from 5th) up in the list of largest sellers of weapons within the same period (it was even fourth according to SIPRI data).

But it's noteworthy that China was also the second importer between 2008 and 2012, after holding the first place (before India takes over as number one) for the previous five-year period. Even more interestingly, “number three”, which is Pakistan, is China’s biggest customer, with technology such as combat aircraft, submarines, frigates and battle tanks. It even co-developed and co-produced 50 JF-17 aircraft with China, in which other countries in the region subsequently showed interest. Pakistan needs huge amounts of military equipment to withstand the perceived threat from India, and given this its common interests with China are not surprising.

Forging its image as a weapons seller, China always promotes its principle that trade is favoured by the policy of non-interference in other countries' domestic affairs. "Whoever is in the government, whoever has diplomatic status with us, we can talk about arms sales with them,” Xu Guangyu, a retired major general in the People’s Liberation Army, was quoted by the New York Times as saying in 2013.

Pricing turns out to be another key factor; a Chinese defense company named China Precision Machinery Export-Import Corporation surprisingly managed to sell an HQ-9 long-range missile system to Turkey beating traditional partners of Ankara like Raytheon Co, which had deployed a Patriot system commissioned by NATO in 2012. Some experts said the USD 4 B contract played its part.

The country also aims to enhance its role in the global drone production, hoping to become the world's most important drone manufacturer in less than a decade, with its industry expected to grow from USD 942 M this year to USD 2.3 B in 2023.

South Africa: Seeking Identity

South Africa's military expenditures were just USD 4.1 B according to SIPRI data, or 1.2 percent of GDP, with both nominal value and share dropping over the past few years. The leading African nation (though "ousted" from the first place by Nigeria in nominal terms, it is still considered to be the most developed one) uses its military mostly in joint operations with police to fight cross-border crime or block internal smuggling routes. Pretoria is also seeking to train excellent peacekeeping forces, while at the same time counting mostly on diplomatic means to ensure regional and continental security. President Jacob Zuma has previously pushed to boost his country's role in crisis response by offering the creation of an African intervention force, the African Capacity for Immediate Response to Crisis.

In the post-apartheid South African society, some also suggest the army should rather retain ceremonial functions and military expenditure should go to education and healthcare instead. Photo by EPA/BGNES

In other words, unlike other BRICS countries South Africa does not seem to be currently expanding the role and stature of its military to emphasize its place as a regional power through rearmament. Nor does the country undergo a large-scale expansion of its defense industry despite its previous efforts to do so. Alongside other politicians, former South African President Thabo Mbeki was embroiled in a scandal over controversial arms deals amounting to just USD 4.3 B in fourteen years which included aircraft, warships, helicopters and submarines. Their total value neared a year's military spending. The total order eventually stood at even more - about USD 7.6 B - and this is not hard to explain, as it included 3 U209 submarines, 4 MEKO A200 light frigates, 30 AW109 light helicopters, and 26 JAS-39C/D Gripen fighters were on the shopping cart under the 1999 Strategic Defense Procurement Process. On that occasion, the Defense Industry Daily wrote years later that "buying shiny toys but not having the maintenance training, or qualified people to operate them", a "regular occurrence in Africa", could also be observed here. The country's military is now facing numerous problems including collapsing infrastructure, shortage of ammunition, lack of experienced staff and far-reaching bureaucracy.

South Africa nevertheless offers a relatively unexplored arms market as well. Many were surprised by US giant Boeing's decision to work together with the Paramount Group of South Africa, the largest private defense and aerospace company of its nation which Defense News ranks far below the global Top 100.

Could Military Puzzle Pieces of BRICS Countries Fit Tight?

BRICS countries do have joint projects, and they are not just limited to this week's huge development bank. A recent example came in mid-May, during a meeting of Russian President Vladimir Putin and Chinese counterpart Xi Jingping resulting in the signing of a number of bilateral documents, including the joint construction of a long-haul wide-body aircraft between the two countries. The Russian daily Kommersant then argued the main aim of Beijing was to build "at least" 1000 jets as part of the bilateral project which might grow into a joint venture providing the conditions to compete "full-scale" against European and US giants. Two months later, hours before this week's summit in Fortaleza, Brazilian President Dilma Rousseff also expressed interest in Russian equipment, more precisely in acquiring “air defences from Moscow”.

Rousseff (L) and Putin (R) shake hands prior to the opening the summit in the city of Fortaleza, 15 July 2014. Photo by EPA/BGNES

Common positions are also likely among the BRICS; nobody was surprised, for instance, when they took Russia's side in the Ukrainian crisis. To be more precise, however, they were rather inclined to support President Vladimir Putin against his prospective international isolation than to recognize Crimea's right to break away from Ukraine - especially China does not seem to have the slightest intention, given its 150-million-strong Uighur minority it the north-west or its cautiousness about Tibet, which could wish to split just as Crimea did. There was an even more unmistakable image of the BRICS pulling together as a team and it was conveyed last year, when a meeting following the alleged chemical attack in Syria (and the alleged peacekeeping effort by Russia) delivered a somehow alarming message:

No military or political cooperation was envisaged before the Syrian situation but it cannot be ruled out now," as Vyacheslav Nikonov, who chairs Russia's National Committee for BRICS Studies, was quoted by The BRICSPost as saying.

Even though Nikonov warned joint decision-making was a challenge in relations among the five countries, he did not hesitate to echo other members of the Committee's statements that a political role for the BRICS was "inevitable". Moreover, even if no "bloc"-like political rapprochement has been observed ten months later, following the developments in Ukraine, plans announced by Vladimir Putin to turn economically to non-Western partners – and most recently the deals with China in mid-May, including a historic gas supply deal – are undoubtedly a step in the direction of cooperation.

But as regards the short review which is now coming to an end, the “emerging five” tend to substantially differ in their defense interests. There is no single precise threat that could unite them apart from the vague term “Western hegemony”, which becomes more and more devoid of sense as the world is indeed becoming more and more multi-polar and phrases like “US dominance” are more a matter of propaganda for the public.

Emerging powers do not have real incentives to deepen integration in defense industries and boost arms trade, for instance; all of them want to develop their own technologies. Especially those with rising population and expanding economies would like to make sure they would protect the best their interests and would not count on foreign equipment (and know-how), but would rather be self-sufficient. It is hard to imagine how Brazil, aspiring to be a South American leader, would team up with Russia or China, which want a strong presence on markets there. India, striving to be more and more productive in terms of OEMs, would one day prompt the outrage of the dominant trade partner it counts on in the face of Moscow. Ambitious China, displaying the potential to generate more and more added value through its products, infuriates both Russia and India, with its growing army, its competitiveness and strategic alliance with Pakistan (especially unnerving for Delhi).

The BRICS might indeed be looking as though they were building a wall to provide more space for their thriving (at least some of them are) economies; but actually they would cling to their weapons rather to defend their interests and boost their trade than to stand together, when there is so much that could make them drift apart.

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