- The unvoted amendment to the Insurance Code blocks Bulgaria's entry into the eurozone
- It is related to the interests of one insurance company and Alexey Petrov who shares a long history with ex-prime minister Boyko Borissov
- GERB and MRF didn't vote although they consider themselves "pro-euro" parties
At the end of this parliament, the two parties deemed to be "pro-euro" effectively blocked Bulgaria's European development. The reason: another deliberate delay to a small and technical change in the Insurance Code, a vital prerequisite to Bulgaria's admission to the eurozone in 2024. In this parliament's dying hours, the amendment was sabotaged by the coordinated absence of five parties from the economic committee, leaving the vote without a quorum. The parties were GERB, MRF (despite their positive position for the eurozone), Bulgarski vazhod, Vazrazdhane, and BSP (all opposed to Bulgaria's admission).
Co-chairman of Democratic Bulgaria Hristo Ivanov cited the political explanation: "Bulgaria must adopt amendments to the Insurance Code that meet the expectations of our partners in the EU and is not doing so because of the interests of Aleksey Petrov," he said, addressing the co-founder and considered the real owner of the Bulgarian insurance company "Lev Ins".
For the euro to be accepted as the official currency from January 1, 2024, the government and the Bulgarian National Bank must request an extraordinary convergence report from the European Central Bank and the European Commission relatively soon - this spring. And it depends on meeting the numerical criteria, regulatory compliance, and the fulfillment of several commitments undertaken in 2020 upon entering ERM II. One of them is dealing with the "Green Card" problem in Bulgarian auto insurance - accumulated liabilities for claims from abroad to the Bulgarian bureau. They are concentrated mostly on the leader in the "Civil Liability" policy, namely the "Lev Ins" company.
The complete blocking of the changes impairs Bulgaria's chances of entry in January 2024. And after that, it will be even harder. Currently, the political will exists to compromise on some of the criteria that Bulgaria does not meet (especially inflation), but not for the others, whose decision depends solely on Parliament.
However, Parliament (and especially GERB) preferred to protect the interests of "Lev ins". This is due either to lobbying or fear (Alexey Petrov has a turbulent history with GERB and has said publicly that GERB's leader Boyko Borissov is scared of him).
The inside story clearly encapsulates all the vices afflicting Bulgarian politics: a complete discrepancy between words and deeds, dubious past ties, and unregulated connections between business and parties. Instead of talking about the bigger goal or that the proposed amendments will bring us closer to the eurozone, for which there is an open window right now, former prime minister Boyko Borissov claimed that it was about "lobbying on behalf of European insurers". According to unofficial information from GERB, Borissov has made it clear that the party will strictly adhere to the theses of the Union for Economic Initiative (led by Alexey Petrov) and insurers and will obstruct completely all other proposals to redress the situation.
The result is stalled admission to the eurozone at a pivotal moment, risking Bulgaria's continued isolation. In addition, the thwarting of much needed supervision of financial flows in and out of the country. This is exactly the loose regime that allows the Peevski model to flourish in politics, likewise Kovacki's model in energy, and Alexey Petrov's in insurance.
Where is the problem?
The problem with the Insurance Code is not new or "domestic" - it affects 50 countries, including the entire EU. That is why the Ministry of Finance initiated amendments. With them, the ministry was supposed to guarantee compliance with the rules in the "Green Card" system and the fundamental principle "first you pay, then you can argue ''. This was included in the commitments undertaken by Bulgaria after entering ERM II.
The broad coalition led by GERB failed the voting and as the old parliament has now ended, the old rules will remain in force. On the one hand, the benefits for Bulgarian insurers will continue, and on the other - they are blocking Bulgaria's path to the Eurozone.
The longstanding association between Borissov and Alexey PetrovGERB's leader Boyko Borissov and Alexey Petrov go back a long way. In the 2000s, they even had a joint company - "Budoinvest", which, they both claimed, was created to bring income to the karate federation, but it never worked.Subsequently, the relationship between Borissov and Petrov soured, and Petrov was arrested in connection with the famous "Octopus" case. It became an occasion for the media to recall that the two karate fighters were not always on good terms. Alexey Petrov commented publicly that he suspected it was Borissov behind an assassination attempt against him in 2002.
It is not clear now whether Borissov rekindled his relationship with Alexey Petrov, especially after Tsvetan Tsvetanov (who didn't get along well with Petrov) left GERB. However, his party has sacrificed Bulgaria's entry into the eurozone in the name of the interests of the former beret.