RESOLUTION A3-0129/93

The European Parliament,

-having regard to its resolution of 18 April 1991 on a general outline for association agreements with the countries of Central and Eastern Europe,

-having regard to the motion for a resolution by Mr De Clercq and others on economic and trade relations between the European Community and Bulgaria (B3-0900/92),

-having regard to the report by the Committee on External Economic Relations (A3-0129/93),

A.whereas since the disintegration of the Eastern bloc and the former Soviet Union far-reaching political changes have been taking place in the countries of Central and Eastern Europe leading in the direction of pluralist democracy, as their economic systems move towards a market economy,

B.whereas it is in the interests of the West, and particularly the EC, that these reform processes are successful, since their failure would not only have harmful consequences in the East but also in the EC,

C.having regard to the association agreements concluded in 1991 with Poland, Hungary and the former Czechoslovakia, whereby the EC is to give considerable support to these countries, which have reached a more advanced stage in the reform process, and whereas the Community should devote the same attention to the other countries of Central and Eastern Europe,

D.having regard to the Phare programme and the aid provided by the G-24 group of Western industrialized nations, making available to the countries of Central and Eastern Europe the technical assistance necessary to the reform process,

E.having regard to the major strategic significance of a successful outcome of the democratic transition in Bulgaria and throughout the region in terms of stabilizing the Balkan region,

F.whereas the implementation of economic reform implies a strong government supported by as broad a majority of the people as possible to ensure a consensus on how to overcome in a spirit of solidarity the economic and social difficulties arising during the reforms,

1.Welcomes the fact that since the early 1990s Bulgaria, like the other states of Central and Eastern Europe, has been making considerable efforts to transform its economic system from a centrally planned economy into a market economy;

2.Notes that Bulgaria is currently in the intermediate stage of reform, in which the apparatus of the old economic system is no longer functioning and the new economic system is not yet sufficiently far advanced to show the first results of successful transformation;

3.Points out that this transitional stage has seen a far-reaching paralysis of economic activity in Bulgaria, with industrial output falling by half, real incomes by 40% and unemployment rising to 15% of the workforce;

4.Stresses that in the days of Comecon Bulgaria had particularly close economic links with the other states of Central and Eastern Europe, especially the Soviet Union, with the result that the collapse of the CMEA trading system has affected it particularly severely, and points out that Bulgaria has recently succeeded in opening up new markets, not only in Europe but also in the Middle East;

5.Points out that in addition to the loss of the traditional markets for its products, Bulgaria faces further problems due to the loss of its sources of cheap raw materials and energy;

6.Considers that the cooperation, particularly economic cooperation, recently established between the states bordering on the Black Sea may provide a useful example of good regional cooperation, not in the least incompatible or competing with the close relations between the European Community and Bulgaria;

7.Emphasizes that the high inflation rate, particularly in 1991, was the consequence of freeing many prices and cutting many state subsidies to consumer goods, but also points to the major importance of a stable price system for the smooth operation of a market economy system;

8.Acknowledges the Bulgarian Government's efforts to achieve macro-economic stabilization of the money supply, interest rates, prices and the budgetary deficit, which have led to the first encouraging results and help to provide economic operators and, in particular, foreign investors with a more reliable framework for taking investment decisions that will affect the country's future;

9.Points with concern to Bulgaria's large foreign debt of more than $12 bn, which Bulgaria has recently had great difficulty in servicing and which is placing a major additional strain on the reform process;

10.Emphasizes, in particular, the extreme seriousness of the environmental emergency that some regions of Bulgaria are facing today and stresses that cleaning up the environment should be a particularly important point in cooperation with Bulgaria and the aid granted to it;

11.Calls on Bulgaria, and all the states through which the Danube runs, to step up their cooperation with a view to cleaning up this major European river; urges the Community to do all it can to help achieve this aim;

12.Points out that Bulgaria has received medium-term balance of payments credits of approximately ECU 400 m from the EEC and expects these funds to be sufficient to afford Bulgaria the necessary breathing space to stabilize its balance of payments through its own efforts;

13.Considers that a swift agreement with Bulgaria's private creditors, which have provided approximately 80% of Bulgaria's foreign exchange credits, to convert these debts is a prerequisite for the influx of private investment and the multilateral support of the IMF and the World Bank;

14.Sees the improvement of Bulgaria's balance of payments as an encouraging sign of stability in its external economic situation, leading to a steady increase in currency reserves to more than $ 1 bn by autumn 1992;

15.Welcomes in this connection the return of the Bulgarian currency to convertibility for all balance of payments transactions and hopes that it will soon extend to capital transactions;

16.Sees the improvement in Bulgaria's balance of trade as the first sign that the switch to new trading partners in the Western industrialized countries is proceeding, but points out that the volume of trade continues to fall short of the levels achieved in the late 1980s;

17.Stresses the marked increase in Bulgarian exports to the EC, which have risen by almost 90% since 1988, whereas EC imports have fallen by just under 30%, reducing the EC's trade surplus from about ECU 1 bn to an estimated ECU 150 m;

18.Sees this as the outcome of the opening of Community markets under the 1990 trade and cooperation agreement with Bulgaria and the additional trade concessions granted to Bulgaria as part of the Generalized System of Preferences;

19.Recognizes that, in view of the need for major reforms, the EC-Bulgaria trade and cooperation agreement is not sufficient to formalize economic and trade cooperation between the two sides and therefore welcomes the conclusion of the EC-Bulgaria association agreement, which is broadly similar to the Europe agreements concluded with Poland, Hungary and the former Czechoslovakia;

20.Advocates the swift ratification of the association agreement, especially by the parliaments of the Member States, and welcomes the fact that the trade and economic provisions are to be implemented without delay under an interim agreement;

21.Stresses that respect for democratic principles and human rights are an essential condition for cooperation, as expressly laid down in Article 6 of the association agreement;

22.Is aware that the association agreement represents another step towards closer cooperation between the European Community and Bulgaria, as set out in the preamble to the agreement;

23.Considers the success of economic reform and the full implementation of the association agreement in the stipulated period a vital prerequisite for achieving this;

24.Welcomes the appointment of a joint parliamentary committee, which will enable the elected representatives of both parties to monitor and comment constructively upon the implementation of the association agreements;

25.Welcomes the gradual and asymmetric establishment, in Bulgaria's favour, of a free-trade area with Bulgaria, which will lead to the complete opening of Community markets within six years, while Bulgaria is to be granted a period of ten years to do the same;

26.Recognizes that the EC Member States are in recession, but believes that opening Community markets to Bulgarian products will not cause Community industry any serious additional difficulties;

27.Does not see any special problems as far as the steel industry is concerned, since Bulgaria's production capacity is far smaller than, for example, that of the former Czechoslovakia, Poland or Hungary;

28.Assumes that export revenue accruing to Bulgaria as a result of the opening of EC markets will contribute significantly to the reduction of its foreign debt and to a recovery of demand for Bulgarian products in the EC;

29.Draws attention to Bulgaria's considerable potential in the agricultural sector, which, once productivity is increased, will produce surpluses that will come onto the already glutted markets of the EC;

30.Encourages Bulgaria's government vigorously to pursue its reform course, one of the major concerns of which, in addition to macro-economic stabilization, must be the establishment of a legal framework for a functioning market economy;

31.Points in this connection to the major importance of privatization of the economy as a precondition of individual economic activity, though state ownership of large enterprises may continue to be appropriate during the transitional period, provided it does not prevent the emergence of business-minded management and eases the resolution of the social problems caused by structural change;

32.Is aware that the association agreement can only provide a framework for closer cooperation and that the success of economic reform is largely dependent on Bulgaria's own efforts, as well as investment capital from the Western industrialized nations;

33.Emphasizes the major importance of providing the country with the technological know-how essential to the running of a market economy, which is primarily being conducted under the Phare programme, under which projects worth a total of ECU 190 m have been authorized for Bulgaria;

34.Expects the exchange of students and lecturers between the EC and Bulgaria, under the Tempus programme and also in the context of vocational training, to constitute a valuable contribution in this respect; Bulgaria should be fully involved in this programme;

35.Calls on the EC Member States to make it legally possible, under a system of annual quotas, for employed persons from Bulgaria to broaden their professional experience by spending a set period in the Community Member States;

36.Is concerned at the critical situation of the energy sector in Bulgaria, which is dependent on a number of Soviet-constructed nuclear power stations, whose poor condition is a constant threat to other countries as well as Bulgaria itself; welcomes in this connection the joint efforts of the Commission and the Bulgarian authorities to resolve the grave safety problems by retrofitting additional equipment and through modernization;

37.Calls on the Commission to do its utmost to enable Bulgaria to close down its nuclear reactors immediately, while maintaining adequate energy supplies, and points out that EC funding of ECU 21.5 m has been earmarked for cooperation in the field of energy supply;

38.Attaches considerable importance to close cooperation on the issue of the environment, with special attention being devoted to the ecological aspects of the use of the Danube;

39.Advocates stronger regional cooperation between Bulgaria and the other countries of Central and Eastern Europe, which will assist all those involved in carrying out the work of reform, though it cannot replace the prospect of accession to the EC;

40.Supports in this context Bulgaria's participation in the organization of Black Sea countries, in which a member of the Community - Greece - is also involved;

41.Instructs its President to forward this resolution to the Commission, the Council and the Bulgarian Government.