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Issue No. 181. - July 11, 2000.
    Contents :
       By Zoran Mamula
       By Slobodan Rackovic
       By  Peter Karaboev

    By Zoran Mamula
    The authorities of the Federal Republic of Yugoslavia made one further
step towards disbanding the Serbian-Montenegrin federation
that has already been torn by struggles between Belgrade and
    Last Thursday, there was an emergency session of both houses
of the federal parliament which was held only 20 hours after its
announcement, which is a precedent in the history of parliamentary
system. The session, which was held without consultations with
Montenegrin authorities, adopted changes of the federal
constitution. According to them, Yugoslav president will now be
elected by citizens at direct elections, whereas until Thursday
president was elected in the parliament. Presidential term of
office will be four years, and the same person will be allowed to
twice run for president. Citizens will also vote for the
representatives in the Upper House - the Council of Republics.
According to old version of the constitution, seats in the Council
were given to 20 representatives fr ach republic who were chosen
by parliaments of both Serbia and Montenegro. That secured
equality of the two federal units. Absent from the session of the
federal parliament were representatives of the ruling Montenegrin
coalition who have been boycotting the parliament for almost two
years. Montenegrin representatives also boycott all other federal
institutions since the regime of the Yugoslav president Slobodan
Milosevic refused to admit Montenegrin delegation into the Council
of Republics due to his intolerance towards the reformist
government headed by Montenegrin president Milo Djukanovic. Still,
Milosevic had enough votes to pass changes of the constitution
thanks to the Montenegrin party close to Serbian regime - SNP
headed by Momir Bulatovic. Its MPs aren't legitimate since they
were not elected by the Montenegrin parliament.
    Montenegrin authorities promptly reacted and only a day later
Montenegrin parliament rejected changes of the federal
constitution and put a moratorium on all illegal decisions of the
federal parliament. At the occasion, Montenegrin prime minister
said that procedure necessary for constitutional changes wasn't
respected, adding that the regime in Belgrade tried to cancel
Montenegrin statehood with the policy of putting bringing the
country before the wall. He announced new set of laws which will
protect Montenegrin independence.
    In a statement following the adoption of constitutional
changes, Gorica Gajevic, second person of the ruling Serbian party
SPS, said that changes represent "democratization of the
institutions of the federal state and the affirmation of the
people's will". She stressed that changes were in accordance with
federal laws and that positions of the member states, Serbia and
Montenegro, remained unchanged. Gajevic said it was impossible to
find reasons not to accept the changes since they allow the people
to decide on all matters. "After changes of the constitution we
will pass law and hold federal elections", Gajevic concluded.
However, not only Montenegrin authorities but also legal experts
point out that changes of federal constitution mean great change
for position of member republics with Montenegro becoming a
    It is not hard to predict the outcome of the future direct
presidential elections, taking into account big difference in the
number of voters between Serbia and Montenegro (Serbia has a
population of over 10 million, Montenegro only 600,000). No
candidate from the smaller republic has any chance of victory.
    Montenegro loses equality in regard to Serbia also when it
comes to direct elections for Council of the Republics: until now
Montenegro itself decided which 20 representatives would be in the
council. Now that decision is given to all citizens so, due to
difference in the number of active voters, Montenegro once again
comes out in inferior position.
    However, Podgorica and also great part of Serbian public fear
that constitutional changes enable Milosevic to run for president
once again and lead the country for two more terms lasting four
years each since he has no real rival in Serbia for his job right
now. One of the leaders of the Alliance for change said that one
solution to this situation would be to nominate Milo Djukanovic as
a joint candidate of Montenegro and Serbian opposition.
    However, general impression is that Djukanovic has no chances
of victory because of the huge anti-propaganda in state-controlled
Serbian media. As a result, he would win only in Montenegro.
    All Serbian opposition parties severely condemned passing of
constitutional changes. The strongest opposition party Serbian
Reformist Movement said that direct election of the Yugoslav
president "destroys statehood of Montenegro and insults dignity of
its citizens". Democratic party led by Zoran Djindjic pointed out
that "ignoring legitimate will of the Montenegrin people is equal
to kicking out Montenegro from the joint country".
    It is extremely unfair to change the most important legal act
in such a way that citizens go to sleep under one constitution and
wake up with another. Such way of holding a parliamentary session
only increases belief that the country is led in a dictatorship
manner- said Dragan Veselinov, president of the Coalition
Voivodina and warned that Slobodan Milosevic uses direct
confrontation with Podgorica to extend his survival in office.
Further development of the Yugoslav crisis is completely
    Montenegrin president Djukanovic warned about the danger of a
civil war and threatened to hold a referendum on the independence
of Montenegro. However, since there was no such decision at the
session of the Montenegrin parliament last Friday, nor the
government proposed any such bill, one gets the impression that
the authorities in Podgorica will sustain from radical solutions
and will not add fuel to the fire. Sustaining from referendum was
influenced, it seems, also by the reserved reactions from the
international community, especially USA, following the
constitutional changes. Spokesman of the State Department said
that Washington supported democratic processes in Montenegro, but
that Milo Djukanovic should solve his problems with Belgrade using
"political methods". The statement did confirm the thesis of the
American political analysts that USA never brings significant
decisions in the election year and that it would not support
Podgorica in a possible direct confrontation with Belgrade. On the
other hand Milosevic is yet unready to openly punish smaller
federal unit due to bad experience from the last-year war with
NATO and presence of the international military forces on Kosovo
and Macedonia, in the immediate vicinity of Montenegro, and is
mostly satisfied with fierce political pressure on Djukanovic
exercised by pro-Serbian forces in Montenegro. However, first
great exam of both partie s will be at the end of October, when
federal elections are expected to be held. Montenegrin authorities
will almost certainly refuse to participate in October's
elections, taking into account new circumstances. Then we will
know whether both of them have learnt something from numerous
crises that have been rocking the Balkans during the last ten
     By Slobodan Rackovic
     Although adoption of the new Yugoslav constitution, which
downgraded Montenegro into a region of greater Serbia, was met as
a cataclysm, the regime in Podgorica decided to calm the situation
and orient itself towards a long-term fight.
     At the emergency session of Montenegrin parliament which was
adjourned after illegal and illegitimate passing of changes in the
Yugoslav constitution, Montenegrin authorities didn't vote in
favor of separation from joint Montenegrin-Serbian federation but
opted for a calmer fight with militant regime in Belgrade, in the
spirit of popular wisdom "easy does it". That is bound to
disappoint numerous supporters of independence in the republic and
friends of Montenegro worldwide, but they will also after a sober
thought realize that Milo Djukanovic and his colleagues, no matter
how hurt after events in the federal assembly on 5th July, in all
reality couldn't do much else. It is more than certain that
Slobodan Milosevic, Yugoslav army completely loyal to him and his
followers in Montenegro prepared themselves well for a strike
against Montenegro before passing sudden and swift constitutional
changes in the assembly of FRY, where there are for a long time no
legitimate representatives o
     Montenegrin people who were elected there at the last
elections two years ago.
     Many elements support that theory - haughty behavior of
Belgrade regime and Seselj's statement on TV Montenegro "who gives
a shit about Montenegro". Vice-president of Seselj's Serbian
radical party went even further in this arrogance and extremism
saying that Milo Djukanovic should be urgently arrested on the
grounds of breaking FR Yugoslavia.
     Now it becomes clear that even the public statement of
Yugoslav army headquarters two days before constitutional change,
which attacked the government in Podgorica and head of Montenegrin
state Milo Djukanovic, was timed and issued with clear intentions
to give logistic support political purpose of Slobodan Milosevic,
Mirjana Markovic and Vojislav Seselj! They eagerly waited for
Montenegrins to make a radical move to one-handedly leave FRY to
be able to spur still strong Milosevic's supporters in Montenegro
into action. Second stage was to be an action already seen in
Croatia and Bosnia and Herzegovina - "Yugoslav" army, actually the
army of one man, one ideology, one nation and one religion, enter
the scene as saviors. The outcome is familiar - streams of blood
would flow throughout Montenegro, just as it has been the case in
its neighborhood! Probably for the first time in its history,
Montenegro acted with reason and used ratio instead of actio.
     However, Montenegro refused to bend its head under
Milosevic's yoke. Montenegrin parliament during its session in the
night between 7th and 8th July, after eight hours of heated
discussion (the session was ended at four o'clock in the morning)
passed conclusion saying that Montenegro not only rejected ad hoc
constitutional changes, and with indignation, but also revoked any
right from Belgrade and Milosevic to pass decisions in Montenegrin
name in the future. If we take into account that Montenegrin
diplomatic delegation in the Security Council of the UN revoked
right from FR Yugoslavia of representing its foreign policy
interests - then it is clear that Montenegro is now only formally
within the Yugoslav federation. It is no miracle, then, that
Montenegrin parliament refused to accept amendment offered by
Social-democrat party, coalition partner of the ruling Democratic
party of socialists and People's party, which tried to pass
immediate referendum on constitutional and legal p on of
Montenegro. The moment was completely unfavorable for such a risky
    That Montenegro didn't abandon the idea of referendum, but is
closer and closer to it is illustrated by the newest statement
Milo Djukanovic issued in a Wien daily newspapers "Die Presse"  -
"We have decided to fight and defend our country not only with
police forces but with a broad democratic movement in case
Slobodan Milosevic tries to destabilize Montenegro. Yugoslav army
can stay here only if they respect the constitution and refrain
from meddling into inner Montenegrin political affairs by
supporting pro-Milosevic forces. It may be possible to evade
confrontation between the army and police in Montenegro, but we
have enough force to protect Montenegro in case of need. There is
still a danger of civil war because Serbian government brutally
and skillfully manipulate the voters. Milosevic proved to be a
resourceful manipulator, but every day reformist and pro-European
forces in Montenegro grow stronger and stronger. If Belgrade
continues with the present policy, we will soon h referendum and
then, on the basis of people's will, proclaim independence - said
Djukanovic, not stating when it could happen.
     At already mentioned session of its parliament, already
labeled "historical", Montenegro called international community
and democratic forces in Serbia to help "in peaceful resolution of
problems in the relationship between Serbia and Montenegro by
respecting the will of citizens since it is of interest to both
republic and the whole region". State institutions, especially the
Ministry of interior, were asked to help preserve the peace in the
republic, but also its security, while the Yugoslav army was asked
"not to allow themselves to be misused against citizens,
institutions and state mechanisms of Montenegro". Furthermore,
head of Montenegrin diplomacy Branko Lukovac during his recent
stay in London dramatically asked the world community to help
Montenegro resist unbearable pressure from Belgrade, which was
commented in Montenegro as a direct appeal to NATO and Pentagon to
provide military protection to Montenegro against armed attack
from Belgrade.
     So if we have called Montenegro a powder keg so far, then
today, after dramatic events following change of the Yugoslav
constitution, we could easily say that the fuse is already lit by
Slobodan Milosevic. That could endanger peace not only in this old
and tiny state and Serbian-Montenegrin federation, but also in the
whole region, even in the South-eastern Europe. It seems that the
time of indecision and waiting of international community has run
out as nobody should expect freedom-loving and brave Montenegrin
people to accept repression and humiliation from Belgrade for much
     Because now Slobodan Milosevic, on the heels of his newest
"success" of changing Yugoslav constitution, will try to
forcefully impose that document on Montenegro . He will also try
to force Montenegro into accepting federal elections that he has
already completely set-up, and the Law on terrorism. Taken
together, all those things serve to return Montenegro where it was
three years ago, before Djukanovic became its president - in the
tight embrace of Slobodan Milosevic, where it has been for all the
time since Tito's Yugoslavia collapsed.
    By  Peter Karaboev
    The biggest Bulgarian state owned bank, the jewel in the crown
of Bulgaria's financial system was sold this Friday (07.07.2000)
to an Italian-German consortium for 360 mln. euro. This was the final
big deal in the long and painful privatisation program and the
last of scandals surrounding this process. But the scandal was
rather internal than international  and it was - and will be used
in near future - as a tool for political pressure pro and contra
the ruling coalition in Sofia.
    98% of Bulbank (BB) were sold to UniCredito and Alianz (93%
goes to Italians and 5% - to Germans). The losers in the
competition are Kanovas from Greece (Greek mogul Pavlos
Vardinoyanis with 5% participation from French bank Credit
Agricole) and Belgian KVC Bank. Alianz is a name that speaks for
itself in the business world and UniCredito is the second biggest
Italian bank that negotiates merger with Banco Nationale del
Lavoro, which - if successful - will make it No 1 in Italy and
member of Europe Top 10 bank chart. With actives of more than 185
billion euro UniCredito is already in Poland, Croatia, Slovenia
and expands its activity in Central/Eastern Europe.
    Bulbank is former Bulgarian Foreign Trade Bank (BFTB) which
for the last 10 years works only as a tresor-bank, not as a trade,
investment, universal or special bank. It's managers were
reluctant to lent credits and preferred only to get money from the
state and state owned companies. This way it's actives at the
moment are considered to be around 400 mln. euros. The last means
that 360 mln. euro is a good price for "money warehouse",
especially on the risk-region like Balkans.
    Only two days to the finalising of the deal with Bulgarian
Bank Consolidation Company (BCC) the president of BB Mr. Chavdar
Kantchev gave unprecedented 90-minute press-conference accusing in
incompetence and conflict of interest his boss Petar Zhotev - the
only Deputy Prime Minister and Minister of the Economy, head of
the BCC. Bulbank is not an ordinary  bank, but a strategic
investment in the national bank sector, providing any new owner
with a "flying start" of 27% of the market, Kantchev said. There
is always a special bonus to the state in this kind of deals and
the low price the Government negotiated (Zhotev was a chief
negotiator) is a sign that it's not interested in good deals, he
said "The state in transition is unreliable and unstable owner
fighting for juncture and dubious interests. The state power was
never interested in investments, needed for a successful bank, in
its market position and potential, in the need of completely
different motivation for its staff", Kantc added. According to him
the price of BB is about 640 mln. euros, while for the deal done
the state will got only 8% bonus which is unacceptably little.
"I'm not going to hoist foreign flag and will leave the bank."
    For any Bulgarian Government BB is a Treasure Island in the
sea of mud, said another Bulgarian banker during the financial
crisis of 1996-early 1997. Strong words but close to reality.
Maybe the only label for BB is "The different bank". The storms
that blew across Bulgarian financial sector through the last
decade left BB untouched. In the recent stagnation of the economy
BB declared profit of 101,5 mln. levs (1 Lev=1 DM) for 1999 and
paid for this year 53,5 mln. levs in taxes. It was never robbed by
its managers; they felt strong enough to refuse bank guaranties to
the previous Government of former communists (which contributed to
their scandalous fall from power); there was no serious reform
project of the National Bank without its participation and BB
keeps in its archives tons of documents explaining how billions of
Bulgarian foreign debt mounted in the last years to 1989. But BB
was a darling child of the Government too. In 1994 the state took
as it's own BB debt of 8,5 billion USD to the Paris club of
creditors plus 619 mln. USD debt to the London club. BB was rarely
subject to revisions and auditing and frequently was allowed to
issue its treasure bonds. BB preferred to gain through the deals
with the state budget and credits to the biggest state companies
and only recently started to credit the real sector of economy.
This made BB a kind of Central and trade bank in the same body.
The critics say that BB even wasn't a bank - it was rather "one
man's state money warehouse" working sometimes against the state
    But who is Chavdar Kantchev? 48-years old, he has a dull
personal and glorious professional biography. And there are many
question hanging above his CV. He studied in Sofia English School
(good number of contemporary Bulgarian politicians, diplomats and
businessmen came from this school with special admission scheme
during communism); than graduated International Economic Relations
in Sofia (another long story for the special admission for the
children of former nomenclatura); his first job was in BFTB - the
main player with so dear to the communists hard currency. Only 30
years old he became Deputy Director of Litexbank in Lebanon (97%
owned by BFTB), 18 months later he is Vice-President and since
1985 - President of this bank. During his 7-years old work in
Lebanon a lot of "help" to the certain radical Arab groups went to
the Middle east. At the very same time Bulgarian foreign debt
mounted with billions of USD, good part some of them disappeared
in private accounts. In 1989 he came back to Sofia as a Chief
Director in BFTB and since March 1989 is Vice-President of the
bank. Two years later - during the Government of the late
Prime-Minister Andrey Lukanov (he was killed at the doorsteps of
his house in Sofia in 1996) Kantchev was appointed President of
BFTB, renamed in 1993 as Bulbank. He remains tzar of this bank up
to the moment.
    But Kantchev wasn't servant to the former communists. At the
very beginning of his mandate as a head of BFTB Lukanov canceled
the payments on Bulgarian foreign debt, which is not the perfect
environment to start as a president of this kind of bank. In 1994
he was one of the chief negotiators with IMF on successful
rescheduling Bulgaria's debt. In 1996 his bank was asked to give
25 mln. USD dollars state guaranties for import of American grain.
Kantcev refused while the ruling former communists were exporting
almost every seed of Bulgarian grain and the state currency
reserve was in a free fall. Number 2 in the ruling party called
him "threat to the national security" and unsuccessfully asked for
his dismissal. Bread crisis followed and shorter after this the
street protests. Until last week Kantchev gave only 2 (correct!)
interviews for 10 years which is strange behavior for the banker
considered to be the best one in Bulgaria (in the middle of 1990's
he was twice awarded The banker of the year). Few people dare to
call him their friend. The president of BB is media-shy
traditionalist, he never speaks at the financial forums but his
opinion is always well known. He easily collects a team and lets
the others to speak instead of him. His main successes was
rescheduling of the foreign debt and clearing nearly 1 bln. USD
Bulgaria's debt to the former COMECOM banks for only 25 mln. USD.
Through the years his name was mentioned many times - as future
Prime-Minister, Finance Minister, National Bank Governor, Chairman
of the Currency Board, he was the only banker invited in the
Council for financial stability in 1997... Kantchev almost refused
everything. But he knows more than he speaks and now is in
position to generate personal political, financial and power
resource and support. And this is not a good news for the
Government less than year from the general elections.
    Why than was this conflict at the end of shiny 10 years
carrier? The eventual answer is something banal - money. At the
very beginning of the privatisation of BB Government said that it
offers 85% stake and 9q5% will be for the staff of the bank. The
last was mentioned many times through the years of negotiations.
But only few months ago Government decided that this is too
generous. And maybe is was right because we are talking about 100%
state bank. BB managers asked for 1,5 mln. DM bonus for 1999 and
Government slashed them with two thirds. The lions part of 750-800
000 USD were to go to the 5-member Board of directors of BB which
is scandalous for the public servants in a country with 100 USD
average salary. The sharp words from Kantchev eventually came
because the second tender Kanovas promised him 15% part of BB.  If
he is so good banker let him by this part with his won money,
Bulgarian financiers from London City commented.
    The media in Bulgaria speculated that maybe the stars played
their role in this case. Kantchev is Pisces (Fishes from the
Zodiac) and likes his job very much. Maybe too much.