The top political highlight of the last three months in Bulgaria was undoubtedly the Apartmentgate scandal that saw several high-ranking figures, mostly from the ruling GERB party and its close circle, buys luxurious properties in central Sofia below market prices. The debacle led to the resignations of several government ministers and deputy ministers and most importantly, that of Tsvetan Tsvetanov, prime minister Boyko Borissov's top lieutenant. The now ex-head of GERB's parliamentary group and election council has been a principal figure in mustering majority during crucial votes in the National Assembly and in party-building. The potential effects of his absence would likely be noticed in the local elections this autumn.
The European Parliament elections in Bulgaria that took place on 26 May reaffirmed the political status quo. The ruling GERB party lost 75,000 votes in comparison with the 2014 elections but retained its six seats in the European Parliament. Main opposition Socialists regained 50,000 votes compared to 2014 and took five mandates - one more than they previously held, but fell short of winning the election, as the party leader Kornelia Ninova aspired to. The Movement for Rights and Freedoms lost one MEP seat, the nationalists from VMRO got two after consolidating the "patriotic" vote and the centrist liberals from the Democratic Bulgaria movement barely passed the mark to send one MEP to Brussels. While the authorities failed to detect serious offences, media reports and a deeper look into the results in rural areas suggest serious vote-buying.
A series of troubling developments hit Bulgarian media in the last few months. Nova TV, purchased by Kiril Domuschiev in February with a helping hand from Bulgarian regulators, started dismissing many of its top reporters, including investigative journalists Mirolyuba Benatova and Genka Shikerova. Public television BNT, which is 50 million levs (25 million euro) in the red, lost its director-general, who received a suspended sentence of 15 months for drunk driving. Additionally, pressure mounted on investigative journalists, with Capital's Rossen Bossev being sentenced to a fine for defamation by a judge he previously criticized and Bivol's Assen Yordanov being pressured by the prosecution authorities on the basis of fake complaints.
Five candidates have filed bids for a 35-year concession contract for the management and development of Sofia Airport. On 11 May, the transport ministry said the five bidders are: Manchester Airport Group, which enters the race in consortium with China's state-owned Beijing Construction Engineering Group; French infrastructure investor Meridiam in consortium with Munich Airport; a tie-up of Swiss-based SSB Sauerwein & Schaefer and Copenhagen Airports; Germany's Fraport, which operates both one of the largest European airports, in Frankfurt, as well as Bulgaria's Varna and Burgas airports; and Turkey's TAV Havalimanlari Holding in consortium with Aeroports de Paris. According to initial estimates based on the transport ministry's criteria, the tie-up of TAV Havalimanlari and Aeroports de Paris is leading the race with its offer to make an initial concession payment of 275 million euro and invest at least 600 million euro.
On 24 April it was announced that the general manager of Lukoil Bulgaria Valentin Zlatev has been replaced by Bulat Subaev who managed the Central and Eastern European and Belgium branch of Russia's Lukoil. No official reasons for the change were disclosed, but according to sources of Capital newspaper it had to do primarily with the worsening financial results of the fuel retailer, Zlatev's controversial public image and his inability to facilitate the development of large-scale Russian projects despite his closeness to Bulgarian politicians from various colors. It is expected that Mr Subaev will launch a more market-oriented approach to the business of Lukoil in Bulgaria.
Russian influence in Bulgaria's energy sectors is once again growing. In a rather predictable way, the construction of the extension of Gazprom's TurkStream gas pipeline from Turkey to Europe via Bulgaria was handed to a Russian-linked consortium. Initially, Saudi Arabia-based Arkad group won the construction tender but then Bulgartransgaz disqualified it and invited Gas Development and Expansion in Bulgaria GRRB. One of the companies in the tie-up is connected to Russia's TMK, which was tipped as favourite to win by Russian media before the tender was opened. In another development, Bulgaria's National Electricity Company invited potential investors to express interest for restarting the frozen Belene nuclear power plant project. The conditions in the invitations can be fulfilled only by Russia's Rosatom.
Party subsidies
Bulgaria's parliament endorsed a cut in state subsidies to political parties to 1 lev (0.5 euro) per vote received in general elections, from 11 levs. The reduction was proposed by Prime Minister Boyko Borissov after it emerged that the parties have received greater subsidies from the finance ministry. The parliament also decided that the parties will have until the end of 2020 to repay the overpaid subsidies that amount to 14.6 million levs in total. While political parties are often criticized for keeping millions of levs in their coffers, some experts fear the cut in state subsidies may increase the parties' reliance on funding from shady sources.
Pope's visit
"Keep building peace, sow goodness," Pope Francis told Prime Minister Boyko Borissov as he left Bulgaria on 7 May after a tightly-packed three-day visit. The pontiff met with Bulgarian politicians and Orthodox clerics, prayed for peace alongside tens of thousands in the centre of Sofia, visited a refugee camp with a message of acceptance and openness and gave communion to dozens of Bulgarian Catholic children in Rakovski, near Plovdiv. While the Pope was warmly met by most Bulgarians, he was given the cold shoulder by the Bulgarian Orthodox Church.
Ethnic tensions
Yet another serious ethnically-tinged clash shook Bulgaria at the beginning of April when a confrontation between a shopkeeper and a client in Gabrovo led to an anti-Roma protest in the city. Most of the 800-strong Roma population fled this city in central Bulgaria for several days after mobs of thousands entered their quarters and even destroyed some houses deemed illegally built. As on other occasions, ultranationalist parties and their supporters stirred up the protest.
On 17 June the US embassy in Sofia handed Bulgaria's Ministry of Defense an official offer for the sale of eight F-16 Block 70/72 multipurpose fighter jets, but no details were disclosed. Two weeks earlier the Department of State notified the Congress of the proposed Foreign Military Sale (a procedure that uses US DoD acquisition system to procure defence articles and services on behalf of its partners) to Bulgaria for an estimated cost of $1.673 billion. Bulgaria hopes it can lower the price to $1-1.1 billion in the course of the ongoing negotiations with the US, Defense Minister Krasimir Karakachanov said.
NEW BUYER OF CEZ BUSINESS
Insurance and financial holding Eurohold Bulgaria is buying the assets of Czech energy group CEZ in Bulgaria for 335 million euro. The deal still needs to be approved by the anti-trust authority which has prevented the sale to the previously selected buyer, local energy trader Inercom. This time, a smooth change of ownership is expected. CEZ has even included the expenses for the planned rebranding of the company in its annual application for approval by the regulator of its fees, hinting that the state will not block the deal. CEZ's business in Bulgaria - energy supply, distribution and production of renewable electricity, tops the ranking of energy companies by revenue in the country. The Czech group has been trying to exit Bulgaria for a number of years, citing worsened business environment and pressure from the authorities.
REFRESH AT NEC
National Electricity Company (NEC) CEO, Petar Iliev, resigned suddenly on 19 June. Mr Iliev didn't explain his decision which followed an aborted electricity sale tender which industrial associations claim was fixed in favour of one preferred buyer. Rising prices on the Bulgarian energy exchange triggered a careful examination of NEC's practices. State-owned NEC is the biggest electricity seller on the exchange and is frequently accused of manipulating the market. The management of the heavily indebted company however maintains that it only aims to optimise NEC's revenues. The fall from grace of former deputy prime minister Valeri Simeonov, who was Mr Iliev political patron, probably hastened the resignation.
GREEN URGE FOR BULGARIA
The European Commission criticized Bulgaria's National Energy and Climate Plan which is supposed to lay down the country's energy policy to achieve the EU emissions reduction and renewable energy goals by 2030. The EU's executive body is urging Sofia to set more ambitious targets for renewable energy. Bulgaria's government plans to increase the share of renewables in final energy consumption from current 18.8% to 25%, while the EU-wide goal is 32%. The additional green energy, according to the government plans, is supposed to come from wider use of biomass for heating and cooling but not from new photovoltaic and wind power generators.
GROWING IN ALBANIA
Bulgaria-based Albania Telecom Invest is the new owner of Telekom Albania, the Western Balkan country's former telephone monopoly. Its previous owner, Greece's OTE Group (a subsidiary of Deutsche Telekom), sold it for 50 million euro. Albania Telecom Invest is owned by Bulgarian businessman Spas Roussev and by Albanian-Bulgarian investor Elvin Guri. Mr Roussev is chairman of the supervisory board of Sofia-based telecommunications group BTC, while Mr Guri is venture investor.
DEUTSCHE BAHN IN KARLOVO
Rail freight operator DB Cargo, part of Germany's Deutsche Bahn, acquired the Wagon Repair Plant in Bulgaria's Karlovo. The plant was closed down in 2013 and now will be revived by the German company which hopes to expand its business in Bulgaria. DB Cargo intends to maintain its rolling stock at its new acquisition and probably attract orders from outside Bulgaria later. In recent years, Bulgaria became a preferred place to establish maintenance facilities for several big German companies. Lufthansa's Sofia base is one of the biggest of Germany's national air carrier.
FREEDOM TO ADVERTISE
The Administrative Court of Sofia Region repealed the record 14.97 million levs fine imposed on Metro Cash & Carry Bulgaria by the Commission for Protection of Competition. The regulator fined the company earlier this year for a commercial following a complaint by Lidl Bulgaria & Co. The decision can be appealed before the Supreme Administrative Court. According to the Sofia court, the promotional campaigns run by Lidl in the form of thematic weeks are not exclusive and are not only conducted by this retail chain. Metro Cash & Carry Bulgaria's add ran with the message "Do not change the taste, change the store. The Italian week lasts the whole year, Metro", alluding to the week-long promotional campaign in Lidl stores.
The top political highlight of the last three months in Bulgaria was undoubtedly the Apartmentgate scandal that saw several high-ranking figures, mostly from the ruling GERB party and its close circle, buys luxurious properties in central Sofia below market prices. The debacle led to the resignations of several government ministers and deputy ministers and most importantly, that of Tsvetan Tsvetanov, prime minister Boyko Borissov's top lieutenant. The now ex-head of GERB's parliamentary group and election council has been a principal figure in mustering majority during crucial votes in the National Assembly and in party-building. The potential effects of his absence would likely be noticed in the local elections this autumn.
The European Parliament elections in Bulgaria that took place on 26 May reaffirmed the political status quo. The ruling GERB party lost 75,000 votes in comparison with the 2014 elections but retained its six seats in the European Parliament. Main opposition Socialists regained 50,000 votes compared to 2014 and took five mandates - one more than they previously held, but fell short of winning the election, as the party leader Kornelia Ninova aspired to. The Movement for Rights and Freedoms lost one MEP seat, the nationalists from VMRO got two after consolidating the "patriotic" vote and the centrist liberals from the Democratic Bulgaria movement barely passed the mark to send one MEP to Brussels. While the authorities failed to detect serious offences, media reports and a deeper look into the results in rural areas suggest serious vote-buying.
