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Imperator Azenquor

Zapadnaya National and Regional News

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[b][u]ZNCA News: Prime Minister accuses President of undermining gov’t[/b][/u]

 

[i]“Prime Minister Nikolai Genadiev has accused President Paskal Dragomirov of ‘seeking to exceed the powers of the Office of the Presidency’ in order to ‘undermine the defense policy of the duly elected government by using the judiciary as a weapon against the Office of the Prime Minister’.  Referring to the recent Constitutional Court declaration requested by the President, the Prime Minister has made the controversial claim that the Presidency’s assertion of the authority to appoint the Minister of Defense is simply a ‘thinly veiled attempt to remove Defense Minister Sevastian Markov’. According to Prime Minister Genadiev, the alleged attempt to remove the Defense Minister is due to the fact that some individuals ‘within the governing hierarchy’ are allegedly concerned about the prospect of having national defense policy led by a member of the Socialist Party who is said to have once held ‘left-wing tendencies’.

 

While choosing not to respond directly to the Prime Minister’s allegation, a spokesperson for the Office of the Presidency issued a statement revealing that the Presidency simply wished to ‘utilize the Constitutional Court to rule on a matter of Constitutional relevance before said matter became an issue’ and that the Presidency fully stands by its decision to request the ruling from the Constitutional Court. Regarding Defense Minister Markov, the statement suggested that the Presidency ‘holds the view that since Defense Minister Markov was not appointed in the manner outlined in the Constitution and clarified by the court, the Office of Defense Minister is technically vacant’. The statement also urged the Prime Minister to ‘hold immediate consultations with the Presidency’ to facilitate the proper appointment of a Defense Minister. Until that time, the statement said, the Chief of Army Staff will act as Defense Minister.

 

In other news, Finance Minister Vitaly Todorov has revealed plans to draft a law that would permit the government to nationalize certain industries if the economic circumstances require government intervention. The proposed law would create a mechanism that could be triggered by the Finance Ministry in order to nationalize a company or companies in a particular industry. The Finance Minister has stressed that the proposed bill would not be used by the government as an excuse to seize control of stable and profitable private enterprises. Nonetheless, the bill will likely face strong opposition when it is brought to the National Assembly.”[/i]

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[b][u]ZCNA News: Lira plunges to record low in currency trading[/b][/u]

 

[i]“Amidst growing concerns about the Socialist Party government’s economic policy, the Zapadnayan Lira declined sharply in currency trading today. After trading ended, the Lira moved from an exchange rate of 3.28 ISU per Lira to a new record of 5.41 ISU per Lira. The sharp drop in the value of the Lira has confirmed that the government has abandoned the exchange rate target of 3.00 ISU per Lira and has allowed the currency to depreciate significantly. The rapid decline in the exchange rate has prompted speculation that the government may have set a new exchange rate target of 10 ISU per Lira.

 

The Opposition Justice & Development Party (JDP) has criticized the government’s decision to abandon the exchange rate target as ‘evidence of a poorly coordinated economic plan’ and a reflection of the inability of the government to manage the fiscal affairs of the nation. The JDP has also criticized the government for failing to release inflation data for the past three months, suggesting that inflation had risen above the government’s own targets and would likely continue to rise over the next few months.

 

Iskra Grigorova, Parliamentary leader of the JDP has sounded the alarm with a statement that she ‘genuinely believes that the incumbent government does not appreciate the magnitude of the economic crisis the nation faces’ and expressed the worry that Prime Minister Genadiev and Finance Minister Todorov were in a state of ‘unimaginable denial’ about the economic realities facing the citizens of the country. In response, Finance Minister Todorov issued a short statement saying that 'while the Zapadnayan economy is going through a period of minor structural adjustment, the fundamental macroeconomic variables are relatively positive and the foundation of the economy is strong'."[/i]

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[b][u]ZCNA News: President appoints new Defense Minister, PM protests[/b][/u]

 

[i]“His Excellency President Dragomirov decided to assert Presidential authority today by announcing that Defense Minister Sevastian Markov has been removed from his post with immediate effect. In explaining the decision, the Office of the Presidency cited the recent constitutional court ruling that the Defense and Armaments minister must be appointed by the President and that the Presidency is not required to accept the candidate put forward by the Prime Minister. While the Presidency suggested that it did not formally recognize the appointment of Mr. Markov, it felt the need to formally declare the position vacant in order to prevent ‘unnecessary confusion’ within the ranks of government.

 

In order to ensure that national defense policy receives the ‘full attention that it deserves’ the Presidency has announced that Vice-President General Teodora Petrova has been appointed Minister of Defense and Armaments with immediate effect. General Petrova is expected to chair the next meeting of the National Defense Council tomorrow afternoon. In a short statement from the Office of the Vice-President, General Petrova thanked the President for her appointment and pledged to ‘discharge her duties in the interest of the people of Zapadnaya’.

 

In response to the Presidency’s decision, Prime Minister Nikolai Genadiev released a statement expressing his ‘absolute outrage that the President would so blatantly bypass the Prime Minister’s office and attempt to remove a government minister in such a highly unethical and illegal manner’. The Prime Minister stated that he did not recognize the authority of the President to remove a sitting Defense Minister and that Sevastian Markov remains the country’s Defense Minister. The Prime Minister also suggested that the government will be ‘carefully examining the actions of the Presidency’ and will seek to determine if an impeachable offense has taken place.”[/i]

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[b][u]ZCNA News: National Shipbuilders Union calls strike, National Assembly debates Nationalization Law[/b][/u]

 

[i]“The National Shipbuilders Union (NSU), has called a three week strike to protest against what it calls ‘poor working conditions’ and ‘unbearably low pay’. The NSU has attacked the state backed shipbuilding company as being ‘concerned only with profits and not with the welfare of its workers’. The Zapad Shipyards company is a joint public-private sector entity that holds a monopoly on all civilian shipbuilding projects in Zapadnaya. The company is also responsible for the maintenance of civilian ships and of the country's key ports.

 

According to the spokesman for the NSU, the company has refused to increase the workers safety allowance from Z$2500 per year to Z$8000 per year and has refused to increase the salaries of shipbuilders by 12.5% as demanded by the NSU. The union has pointed out that shipbuilders have not received an increase in their basic salaries over the past three years, and that the demand for a 12.5% increase is not excessive.

 

A spokesperson for the company issued a statement moments after the strike was announced expressing regret that the union would take ‘industrial action on such a unilateral basis while negotiations were underway’. The statement also said that the negotiations would be halted as long as the strike continues and that the company maintains its position that it is ‘impossible to pay a 12.5% salary increase and a 320% increase in the individual safety allowance in an economic environment where the shipbuilding industry is seeing a sharp decline in new orders’.  According to the statement, the company made an initial offer of a 1.2% increase in salaries this year, which will be followed by a 1.0% increase next year. Any additional increases would be ‘performance based’ and would be linked to growth in the overall shipbuilding sector.

 

In other news, the National Assembly is debating a bill introduced by the Socialist Party that would permit the government to Nationalize certain companies, businesses or organizations if those organizations had become ‘financially unsustainable’ and if the collapse of those companies would ‘have a significantly detrimental effect on the workers of the country’. According to Socialist Party (SP) MPs, the bill would give the government an additional tool to be used only in emergency cases, but the opposition Justice & Development Party (JDP) has claimed that the government is seeking to use the proposed law to increase state control of the economy and to stifle private enterprise.

 

If the bill passes the National Assembly and the Senate it will likely be vetoed by H.E. President Paskal Dragomirov.”[/i]

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[b][u]ZCNA News: Stock market plunge as Nationalization law passes Parliament, President to veto[/b][/u]
 
 
[i]“The controversial Nationalization law drafted by the governing Socialist Party (SP) has been approved by the National Assembly during a special session held this morning. The bill was approved by the 259 Socialist Party members of the National Assembly, while the 241 members from the opposition Justice and Development Party (JDP) and the Republican People’s Party (RPP) voted against the bill. The Nationalization law is expected to be approved by the Senate in the next few days as the Socialist Party (SP) commands a supermajority of 60 Senators in that legislative chamber.
 
According to a statement from H.E. President Paskal Dragomirov, the President will veto the Nationalization bill if it is approved by the Senate as the proposed law is ‘a drastic departure from the economic norms of Zapadnaya’ and may be the tool which could be used to ‘usher in a new era of the expansion of the role of the state in managing huge areas of the national economy’. The Presidency also announced that an emergency summit of key business and industry stakeholders will be held at the Presidential residence tomorrow in order to discuss the events.
 
With very little fanfare, the Zapadnayan Stock Exchange (ZSE) plunged sharply on news that the Nationalization law was approved by the Parliament. By the close of trading today, the ZSE had lost almost 14.2% of its value to close at a record 7 year low. The Zapadnayan Lira also fell in currency trading today to a new low of 6.94 ICUs per Lira, with all indications suggesting that the exchange rate will cross the 7.00 ICU mark as early as tomorrow morning. The trend of ever increasing demand for ICUs will likely continue given the economic situation and the potential for future instability.”[/i]
 

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[b][u]ZCNA News: It’s official: Economy in crisis, inflation now at 18%[/b][/u]
 
 
[i]“After much speculation and ardent government denials, new economic data proves beyond a doubt that the country is now in an economic crisis situation. According to data from the independent National Economic Office (NEO), inflation for this fiscal year is now at 18.4% with unemployment rising to 24.1%. The NEO also estimates that the Zapadnayan economy contracted by 5.3% last quarter and is expected to undergo a further 5% contraction this quarter.
 
The NEO has also revealed that confidence in the economy is also declining with only 28% of Zapadnayans believing that the economy is on the right track. A record 63% of Zapadnayans believe that the economy is on the wrong track, while the remaining 9% were unsure. When asked if they believed the economic situation would improve in the medium term, only 13% of those polled believed that the situation will improve while 80% believed that the economic situation will not improve in the medium to long term.
 
In its annual report, the NEO has expressed concern that the combined factors of declining confidence in the economy, coupled with increasing unemployment and the absence of economic growth may contribute to industrial instability over the short term and may also significantly impact government finances as social programs may come under additional strain as the number of unemployed Zapadnayans increases. The NEO also stated that Zapadnaya’s debt to GDP ratio is now approaching 40%, and that this would undoubtedly have a negative effect on the country’s creditworthiness as well as the nation’s ability to procure new financial agreements.[/i]
 

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[b][u]ZCNA News: Prime Minister to unveil Z$ 194.2 Billion stimulus plan[/b][/u]

 

 

[i]“Socialist Party leader and Prime Minister Genadiev has announced that the government will shortly unveil a Z$194.2 billion stimulus plan to rescue the national economy. The proposed stimulus plan would involve significant cash injections into infrastructure development, industry and the private sector in order to ‘lay the foundations for economic expansion and growth’ in the near future. According to the Prime Minister, the government has an ambitious plan to return the country to economic growth in the next two years as well as to reduce the budget deficit.

 

Under the proposed two year stimulus program, the government will make significant cash investments into various economic sectors in the first year which will allow those sectors to undertake expansion projects and to hire additional workers. The government will then reduce spending in other areas in order to reduce the budget deficit in year one to Z$60 Billion and Z$30 Billion in year two. According to government projections, the growth and expansion of the private sector as a result of the cash injections, will enable the sector to begin repayment of the stimulus funds in year two of the program. The private sector will be given a five year period to repay the funds with no interest applied.

 

The government has also pledged that some of the stimulus funds will be used to expand worker re-training programs and additional education initiatives to ‘better equip the Zapadnayan workforce for the new economic realities’. These training programs will be coordinated with the Ministry of Education and a number of private companies and organizations.

 

The Opposition Justice and Development Party (JDP) has welcomed additional investment in infrastructure development and worker re-training, but has criticized the government for having failed to identify where it will source the majority of the stimulus funds from. The JDP has expressed concern that the allocation of such a large amount of money, without clear indications of how the funds will be sourced suggests poor planning on the part of the government and may mean that the government will either have to increase taxes significantly or add to the mounting national debt in order to pay for the stimulus program. The JDP has suggested that the government could adopt a more ‘fiscally sound’ approach by making cuts to certain government expenditures in order to find the funds for the stimulus program.”[/i]

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[b][u]ZCNA News: Leaked Finance Ministry document shows gov’t missed deficit target[/b][/u]
 
[i]“A leaked document from the Ministry of Finance has shown that the government has missed it’s year one deficit target by a significant margin. According to previous Finance Ministry statements, the Z$194.2 billion stimulus plan envisioned a fiscal deficit of Z$60 billion in the first year and Z$ 30 billion in the second year. The Finance Ministry has so far claimed that the program is ‘mostly on track’ and announced that the various benchmark targets were ‘within acceptable parameters given the national fiscal space’.
 
However, according to an official document leaked to ZCNA news, the fiscal deficit for year one of the stimulus program was Z$92.6 billion and is predicted to rise to Z$102.1 billion in year two. The document expresses the concern of certain Finance Ministry officials that the financial crisis will only worsen unless the government manages to restrain the ballooning deficit. The document also reveals that of the Z$194.2 billion allocated for the stimulus program, Z$172.8 billion has been spent. The Finance Ministry officials have recommended that the remaining funds not be spent and instead be shifted to reduce the year one deficit.
 
In response to the claims made in the document, the Finance Ministry has alleged that the document is a forgery and should not be taken seriously. In a statement, Minister of Finance Vitaly Todorov urged the public not to fall for ‘forgeries designed to undermine the fiscal program of the Socialist Party government’. The Finance Minister also criticized the media for publishing the document and discussing it’s content without first verifying the document’s authenticity. Despite this, our own checks with current and former finance ministry officials indicated that the document is genuine and did originate from the Ministry of Finance.
 
In other news, the Zapadnayan Lira declined further in currency trading today. The Lira fell from 6.94 ISU per Lira to a new record low of 8.72 ISU per Lira at the end of currency trading today. It is now widely believed among financial analysts that the Lira will cross the 10.00 ISU per Lira mark in the next three days. The Zapadnayan Stock Exchange (ZSE) fared little better. By the end of trading the ZSE had declined by 12.4% on news of the government’s missed deficit targets and a further slowdown in the shipbuilding industry.”[/i]
 

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ZCNA News: Finance Minister caught on tape asking officials to ‘fudge’ the numbers

 

“An explosive leak from the Ministry of Finance which was revealed this morning has severely damaged the already battered Socialist Party government. According to our source, the leaked tape was a recording of the weekly meeting between Finance Ministry officials and the National Budget Office (NBO). At the meeting, Finance Minister Vitaly Todorov is heard on tape demanding that the NBO ‘fudge the numbers’ in order to hide the widening budget deficit and the collapse of the stimulus program. The Finance Minister is heard stating that the government has been forced to cancel some of the projects that stimulus funding was already announced for, but that the government had not announced this.

 

When an NBO official asks the Finance Minister what was done with the additional stimulus funds, the Mr. Todorov replies that the funds were used to pad the tax collection numbers in order to show that the budget deficit remained ‘mostly on track’ for the second year of the program. The NBO official then voices concerns about the ethics of presenting misleading statistics and suggests that the integrity of the NBO as an organization would be called into question. The Finance Minister responds by suggesting that the NBO official would be fired from his post if he did not comply with the Finance Ministry’s request. The NBO official then left the meeting and the Finance Minister then contacted Prime Minister Genadiev.

 

In response to the shocking leak, the Finance Minister has sought to denounce the tape as a ‘crudely made forgery’ and has insisted that no conversation took place with the NBO regarding reporting incorrect or inaccurate figures to the National Assembly or to the public. The National Budget Office has declined to comment on the tape in detail, but has suggested that an investigation will be launched into the alleged incident. Prime Minister Genadiev did not address the controversy directly, but said in a short statement that he ‘continues to have faith in Finance Minister Todorov and his ability to discharge his duties in an effective and transparent manner’.

 

The Opposition Justice and Development Party (JDP) has expressed outrage at the developments and has demanded a full audit of the Finance Ministry by an independent authority without delay. The JDP has also insisted that a criminal investigation be launched into the actions of the Finance Minister to determine if any illegal actions took place. The JDP has also insisted that the actions of the Finance Minister ‘render his position untenable’ and that he must resign immediately. The Office of the Prosecutor General (OPG) is expected to begin an investigation into the incident shortly."

Edited by Imperator Azenquor

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[b][u]ZCNA News: Finance Minister resigns, will remain in the National Assembly[/b][/u]
 
 
[i]“Finance Minister Vitaly Todorov has resigned from the Cabinet, but will remain as a Member of the National Assembly according to a statement released by the governing Socialist Party (SP) this morning. In the statement, Mr. Todorov reiterated the claim that the recording of him urging a member of the National Budget Office (NBO) to commit a potentially criminal act was a ‘forgery’ and that no such conversation took place. The statement suggests that the Finance Minister has resigned due to the fact that ‘remaining in office as Finance Minister would prevent (him) from focusing a sufficient amount of his energies on fighting the allegations’. 
 
Prime Minister Genadiev has accepted the resignation ‘in the interests of national unity’ and has pledged to push ahead with the government’s economic reform program. According to the Prime Minister, the allegations made against the former Finance Minister are ‘of a serious nature’ and should be proven before anyone seeks to draw conclusions. To facilitate this, the Prime Minister announced that the Justice Ministry will launch an investigation into the incident to determine whether or not criminal actions took place and to determine whether or not the recording presented is genuine. The investigation will be led by Justice Minister Miroslav Markov. In the interim, Prime Minister Genadiev will serve as Finance Minister until a new appointment can be made.
 
In other news, the Office of the Prosecutor General (OPG) has announced that its investigation into the scandal is being ‘deliberately frustrated’ after several Finance Ministry officials refused or ignored summons to report to the OPG to give statements regarding the scandal. The refusals, according to the OPG, appear to be a ‘coordinated effort on the part of certain state institutions to prevent a full and transparent investigation from taking place’ and will not be tolerated. The OPG has, however already conducted several interviews with personnel at the NBO including officials who serve as liaisons between the NBO and the Finance Ministry.
 
In the National Assembly, the Opposition Justice & Development Party (JDP) has introduced a motion of no confidence in the Genadiev-led administration in light of the scandal. The motion charges that the administration has ‘willfully or by ignorance of reality led the country towards economic ruin’ and that the scandal represents the ‘most significant evidence of misuse of taxpayer funds by government’. The motion concludes that allowing the Genadiev administration to remain in office would be ‘detrimental to the functioning of the institutions of state’ and would lead to a ‘further deterioration in transparency and the rule of law’.”[/i]
 

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[b][u]ZCNA News: No confidence vote fails, Justice Minister resigns[/b][/u]
 
[i]“The no confidence motion in the Genadiev government was defeated in the National Assembly today. Despite a heated and impassioned debate, the governing Socialist Party (SP) prevailed but not without damage. The leader of the Justice & Development Party (JDP) Iskra Grigorova led her party’s broadside against the Genadiev administration, while the Prime Minister made a lackluster attempt at defending the conduct of the government. In his speech, the Prime Minister accused the opposition of seeking ‘any excuse to attempt to oust the government’ and suggested that the scandal was blown out of proportion by the media.
 
When the debate concluded, it appeared that the government’s 259 MPs in the 500 member Assembly would easily defeat the no confidence motion. But prior to voting on the motion, Justice Minister Miroslav Markov stood to address the assembly. In his address, the Justice Minister revealed that the government’s decision to request a Justice Ministry-led investigation into the scandal was solely in the hope that the Justice Ministry could help to distract from the seriousness of the scandal and potentially clear the former Finance Minister of wrongdoing in the case. Citing the conflict between his loyalty to his party and his oath to uphold professional ethics standards, the Justice Minister revealed that he has opted to resign from the government and to vote for the motion of no confidence. The Justice Minister invited his other Socialist Party (SP) colleagues to do the same, stating that ‘sooner or later’ the members of the National Assembly will have to give an account for their votes and whether or not they voted to ‘shield a criminal from justice’.
 
When the vote took place, 8 members of the Socialist Party (SP) including Mr. Markov, broke ranks and voted for the motion. The entirety of the Justice & Development Party (JDP) and the Republican People’s Party (RPP) also backed the motion, while the remaining SP members voted against. When the votes were tallied, there were 249 votes in favor, 250 against and one abstention. The sole abstention was from former Minister of Defense Sevastian Markov, brother of the former Justice Minister. The vote means that the Genadiev led administration can carry on in office, but the defections from the party and the fallout from the razor thin margin of victory has undoubtedly crippled the Socialist Party (SP). Rumors are already swirling that as many as 15 Socialist Party MPs are prepared to jump ship as the scandal deepens.”[/i]
 

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