Imagine being a Russian billionaire.
Well, most of us probably can't but I would imagine life requires a certain ambivalence: keeping the Russian authorities at bay with constant pampering on one hand, investing abroad under different names on the other - so that authorities there don't confiscate it in the event of sanctions, and well enjoying life from time to time.
That probably applies to Vagit Alekperov - the 5th wealthiest Russian according to Forbes in 2020 and owner of oil company "Lukoil". While he reasonably stays within the reach of Vladimir Putin, he invests all over Europe: a home in Copenhagen, a shipyard in the Netherlands and a huge superyacht named Galactica SuperNova are just some of his properties, if the media are to be believed.
Bulgaria, it turns out, is another place where Alekperov invested, albeit undercover. Documents from the international investigation OpenLux, leaked by the investigative website "Bivol", showed this week that Alekperov is the real owner of a Luxembourg fund, which bought a huge mall and two business towers in Sofia in 2018 (pictured above during their construction).
In short, the biggest shareholder of "Lukoil" secretly bought properties totaling 100 mln. euro in Sofia.
While Russian money buys properties everywhere in the world, and most of it is done secretly, there are two things worth noting here.
First, the deal was concluded in September 2018 - the same month "Bivol" website published an investigation into how the then-CEO of the Bulgarian branch of "Lukoil" Valentin Zlatev was cheating the company out of millions of euro through property deals. Several months later, Zlatev - a famous power-broker and friend of Prime Minister Boyko Borissov - was relegated from his position. It seems that the Bulgarian property market was of great interest to Alekperov in 2018.
Second, despite the requirements of the Law against Money Laundering, the oligarch and his family have not been disclosed in the Commercial Register as the actual owners of the company, whose assets include "Bulgaria Mall" and Infinity tower. This speaks volumes about the ability and desire of the Bulgarian authorities to track down and investigate dirty money (be it their own or someone else's).
And third, Alekperov would certainly classify for a "start-up" visa or even citizenship with his current investment (if you don't have a 100 million euro but still want to reside in the EU and start a company - read more here).
POLITICS THIS WEEK
Now imagine being Mika Zaykova.
The 79-year-old former mining engineer and trade union economist became the unlikely star of the first session of the new Parliament (and a social media meme right away). As the oldest parliamentarian, she chaired the session and while she might have seemed like a granny, provoking sympathy with her thick glasses and slow reading, she was far from being a helpless old lady.
"You are either ashamed of showing up before us and the nation, or you are showing your contempt for this institution," said Ms Zaykova, slamming Prime Minister Boyko Borissov in absentia for failing to deposit his resignation in person.
She later criticized GERB for laughing at another MP's statement on Bulgaria's economic situation, asking them if "it is not true that we are the last in the EU by all criteria, if it is a lie that the poor are eight times poorer than the rich". Videos of her remarks and jovial laughter took Bulgarian social media by storm.
Borissov and GERB are definitely not used to being slapped down in Parliament like that
And it showed. In every vote they stood alone. They were visibly unhappy to be battered by everyone else in the hall, including their recent shadow-partners - the Turkish MRF. Borissov himself was missing, as he resigned his parliamentary seat in an obvious hint he is waiting for new elections.
And new elections are coming, it seems
Judging from the speeches of the main parties, especially Slavi Trifonov's party "There is such a people", the anti-GERB coalition is gearing up for a new vote in several months' time. It is unclear who will reap the spoils from this throw of the dice, but Borissov will keep his fingers crossed and hope to get out of the corner in which he finds himself.
This could prove to be the biggest tactical mistake of the TISP party but for now, they are still riding high. Read more about how they gained pole position in this profile of Slavi, written by our Martin Dimitrov.
In the meantime, lots to do
16 proposals for new laws or amendments were filed on the first working day of the new Parliament. While parties there have no desire to form a government, they obviously have lots of ideas about everything from electoral changes to major reforms. How much of this, if anything, will get done remains to be seen.
One thing settled: a new speaker
Iva Miteva from TISP was elected unanimously while only GERB abstained. Miteva is a long-time parliamentary official, serving as a legal counsel there for the past 20 years.
Talking about authoritative female figures, while only 23% of new MPs in the new Bulgarian Parliament are women, the Speaker's position and 4 out of 6 of her deputies will be female. Women might still be proportionally underrepresented in Bulgarian politics, but when it comes to actually doing work, it is more than clear who is in charge.
One thing we hope to leave behind? The silence
The Parliament is alive again, yet the years of silence, imposed by the way GERB governs will not go away that easy. It has become a state of mind for many institutions to not answer journalistic, neither public questions and be responsible to no one.
ECONOMICSOne thing everyone talks about: The new investment plan for 6 billion euro
Almost everyone on the political stage spoke about the Recovery and Resilience Plan due in Brussels by 31-st April. GERB promised not to file it for now. There is a problem however: a caretaker government will not be in a position to speak about long-term goals, and a new government will need at least one round of consultations before it corrects the current plan.
So Bulgaria can quite possibly file the plan with the Commission somewhere in the autumn. This will be VERY late indeed and probably a problem. One option: filing the current plan and then trying to do some corrections as it progresses.
Tourism, pandemic and vaccines: the state of play
While the political dust settles, the pandemic rages on. Bulgaria still registers a lot of deaths (more on this below) and new infections and this will be another pressing issue for the next administration. In a vulgar display of discontent, the Prime minister Borissov disbanded the current National COVID coordination unit before he resigned.
Only 580 thousand people have been vaccinated with one dose so far and 113 000 - with two. But even they have trouble traveling, because there is no pan-European "green corridor" for vaccinated people and even Bulgaria doesn't yet recognize its own certificates. This spells trouble for tourism.
Revenues from overnight stays fell 42% in February - down to 35.2 million levs, compared to the same period in 2020. Revenues from nights spent in hotels by locals are down 13.6% whereas those by foreigners decreased by 69.5%. In February, the number of functioning hotels was down 11.1% compared to the same month the previous year.
On the bright side: Greece is lifting quarantine restrictions from next week, so expect a lot of traffic in that direction.
In 2020, nearly 125 thousand people passed away in Bulgaria - an increase of 15.4% (16,700 people) compared to the previous year. This equates to a mortality rate of 18 deaths per 1,000 people in the population, up from 15.5 a year earlier. The death rate is at a record high according to historical data from the World Bank going back to 1960. As a whole, the population shrank by 35,000 people in 2020 even though emigration significantly decreased.
Bulgarian airlines want 25 million euro in state aid
The chairman of the association of the airline industry this week pointed out it is only reasonable for them to get part of the payment, due for the concession of Sofia airport. The association consists of 10 companies, 8 of which are airlines - among them Bulgaria Air, BH air, Bulgaria Air Charter and others. This comes on top of another request for 10 million euro made last week by another association, comprising various companies in the aviation industry.
Exports are rising. Prices too.
Inflation is back, registering a 0.6% increase in prices in March after two months of deflation. The shift is mostly due to higher fuel prices which have grown 5.2% in March compared to February. According to macroeconomic forecasts, the inflation rate will increase by the end of the year as energy and food prices increase, and some administrative prices (like natural gas) are raised.
Bulgaria's goods exports also grew - by 2.8% on an annualized basis in February, approaching a sales volume of 5 billion levs, according to preliminary national statistics. The increase comes from trade with both EU and non-EU countries. Imports are also on the rise - sales increased by 2.6% to 5.4 billion levs, of which just over 3.4 billion came from EU member states. Thus, the trade deficit for the first two months of 2021 reached 702 million levs compared to 741 million a year earlier.
TechBulgaria Innovation Hub (BIH)
Silicon Valley-based Bulgarian Innovation Hub (BIH) has attracted another 725,000 US dollars to expand its operations, according to Trending Topics. The organization aims to help Bulgarian startup founders set foot overseas. About 400,000 US dollars came from the America for Bulgaria Foundation in the form of a grant. The remaining 325,000 US dollars came from the startup ecosystem in Bulgaria which includes partners like Eleven, BrightCap Ventures, and Endeavor Bulgaria.
The martial arts streaming platform Fite was acquired by the American TrillerNet. Fite operates locally through the company Flips Media, and among the first investors in the business is the fund LAUNCHub Ventures. The price of the deal has not been announced, but according to the fund it is the biggest sale in their portfolio so far. Market sources value the business at several tens of millions of dollars, which makes it one of the largest sales of a Bulgarian technology company. Another Bulgarian fund also has an investment in Fite - BrightCap Ventures.
Bag and packaging manufacturer Extrapack has invested 3.5 million euro in three new nonwoven production lines. The Veliko Tarnovo-based manufacturer of bags and packaging is expanding production due to the trend of shortening value chains and increased demand for products from local suppliers in Europe. After two meltblown filter cloth machines were installed last year, the line for the so-called spunbond textile, which is widely used in the industry, will also soon be in operation.
Romanian RPA-making unicorn UiPath will be seeking a valuation of 26 billion dollars from the stock exchange. The process automation startup will seek to raise more than 1 billion dollars from the stock market in its IPO. Earlier this year, in its most recent funding round, the company was valued at 35 billion dollars. UiPath was founded in Bucharest in 2005 by Daniel Dines and Marius Tirka. It is currently based in New York.
Bulgaria moves ahead with new renewable energy capacities
Data in the annual report of the Energy and Water Regulatory Commission shows that the solar and wind power installations connected to the electricity distribution networks of CEZ, EVN and Energo-Pro grew more productive in 2020. Meanwhile, power plants such as Maritza Iztok 2 were finding it increasingly difficult to place their electricity.
The most noticeable increase in installed capacity is at Energo-Pro. For example, in 2019, the wind farms were with a capacity of 128 MW, and by the end of 2020 they passed 293 MW. There is also a significant increase in solar systems - over 123 MW of installed capacity in 2020 compared to only 54 MW in 2019.
Daniel Mitov The ex-foreign minister of the second GERB government quickly joined the party and became its nominee for Prime Minister (or more correctly a "lame duck") to try to form a cabinet next week.
17 AprilThe plenum of the Bulgarian Socialist Party (BSP) will meet to discuss the party's poor results at the 4 April elections, but most importantly - to announce if it will back Rumen Radev for a second presidential term.
The battle plan for the Euro"We expect Bulgaria to join the eurozone in 2024," said Finance Minister Kiril Ananiev during the annual CEE Forum, organized by Euromoney. Ananiev also assured everyone that a plan for the introduction of the euro is being drawn up.
AfghanistanBulgaria, which has been a part of the peacebuilding force there, also announced it will bring its soldiers home. Currently, Bulgaria has 120 military personnel in the Central Asian country and has sent a total of 42 troop rotations in the past 20 years.
Krumovi Zakoni - The laws of Khan KrumRule of law and vengeance by law are often confused in the minds of many Bulgarians. One of them appears to be the unofficial head of Slavi Trifonov's TISP party - Toshko Yordanov. After a Nova TV journalist had a slip of the tongue on Thursday and mistakenly claimed TISP was ready to do a coalition with the old parties, Mr Yordanov said that "if we lived in [Khan] Krum's Bulgaria, this boy with the microphone would have been missing an arm and limb already".
The reference was to the IX c. Bulgarian ruler, famous for imposing the first written common laws in the Bulgarian state, known as Krum's laws ("Krumovi zakoni"). They provide for cutting off limbs and other parts of the body, as well as death for libel.
One can only hope Mr Yordanov moves closer to the XXI c. in his understanding of the legal system, when he tries to build a government.