A PLAN for reviving Kremikovtzi steelworks was approved at a session of the joint committee of the European Commission and Bulgaria in Brussels, the Economy Ministry announ-ced last week.
The meeting was also attended by representatives of the steelworks.
The plan was drafted by Eurostrategy Consulting, a firm appointed by the European Commission
Acceptance of the plan for Kremikovtzi was one of the conditions for Bulgaria to be allowed to close the Competition Chapter of EU accession negotiations. The biggest Bulgarian steel producer received 100 million euro in government subsidies and this was seen as sufficient justification for the EC to have demanded that it cut almost 50 per cent of its steel output, from the current 3.6 million tons of steel, to two million. If this had happened 4000 workers would have been laid off.
A compromise has been reached and the consultants suggested that production should be cut by only 30 per cent. The trade unions in Kremikovtzi are strongly opposed to this centralised, command economy method of boosting competition. Kremikovtsi was privatised in 1999. The subsidies were obtained before, when the company was 100 per cent state owned. However, Ale-xander Tomov, deputy chairman of Kremikovtzi's supervisory board, said that the management of the works did not know about such subsidies. They have approached the Commission on Competition Protection on the case, but the Bulgarian anti-trust body has been unable so far to respond to the request.
"We do not want to delay Bulgaria's EU accession by delaying the closure of the Competition chapter," Tomov said. He said Kremikovtzi might accept closing some of its facilities, but the Government would have to compensate the company for failing to warn beforehand of the consequences.
"Kremikovtsi should enter a battle with the Bulgarian Government in some international court, such as the Paris or the London one, and claim $200 million damage," he added.
Òhe EC-appointed consulting firm aims to restructure Bulgaria's whole steel sector. The plan for Kremikovtzi is a part of the framework programme for the overall steel production, which has to be ready in October. It will set the output of Kremikovtzi, Stomana Industry of Pernik and Promet Steel of Bourgas until 2007, when Bulgaria hopes to join the European Union. Bulgaria will have to accept to produce only those steel products and in those quantities, specified by the EC or the EC-appointed consultants.
The meeting was also attended by representatives of the steelworks.
The plan was drafted by Eurostrategy Consulting, a firm appointed by the European Commission
Acceptance of the plan for Kremikovtzi was one of the conditions for Bulgaria to be allowed to close the Competition Chapter of EU accession negotiations. The biggest Bulgarian steel producer received 100 million euro in government subsidies and this was seen as sufficient justification for the EC to have demanded that it cut almost 50 per cent of its steel output, from the current 3.6 million tons of steel, to two million. If this had happened 4000 workers would have been laid off.
A compromise has been reached and the consultants suggested that production should be cut by only 30 per cent. The trade unions in Kremikovtzi are strongly opposed to this centralised, command economy method of boosting competition. Kremikovtsi was privatised in 1999. The subsidies were obtained before, when the company was 100 per cent state owned. However, Ale-xander Tomov, deputy chairman of Kremikovtzi's supervisory board, said that the management of the works did not know about such subsidies. They have approached the Commission on Competition Protection on the case, but the Bulgarian anti-trust body has been unable so far to respond to the request.
"We do not want to delay Bulgaria's EU accession by delaying the closure of the Competition chapter," Tomov said. He said Kremikovtzi might accept closing some of its facilities, but the Government would have to compensate the company for failing to warn beforehand of the consequences.
"Kremikovtsi should enter a battle with the Bulgarian Government in some international court, such as the Paris or the London one, and claim $200 million damage," he added.
Òhe EC-appointed consulting firm aims to restructure Bulgaria's whole steel sector. The plan for Kremikovtzi is a part of the framework programme for the overall steel production, which has to be ready in October. It will set the output of Kremikovtzi, Stomana Industry of Pernik and Promet Steel of Bourgas until 2007, when Bulgaria hopes to join the European Union. Bulgaria will have to accept to produce only those steel products and in those quantities, specified by the EC or the EC-appointed consultants.
