The week: Yet another saviour on the horizon, Fourth Covid wave is here and some good news for the budget

The reason: the most popular caretaker minister likely held a second, Canadian citizenship on the day he was appointed to office by President Rumen Radev in May. The Bulgarian Constitution forbids this for MPs and people holding government office. The saga reached Ottawa and the Constitutional court, which still has to cast a judgement on the appointment, but the damage seemed to have been done.

Or so his opponents, fearing his charisma and popularity, thought. In fact, their attempt to tarnish his reputation seems to have backfired.

Mr Petkov immediately produced a document proving he had applied to revoke his Canadian citizenship weeks before getting drafted into the caretaker government. Many viewed this as proof of his loyalty to Bulgaria.

Apparently, the general public thought that the Canadian citizenship debacle was no more than an attempt by the status-quo to take down a politician committed to dismantling the captured state. A Facebook group backing him to become Prime Minister appeared and quickly reached 100,000 followers. Then, a poll by Market Links appeared last Friday, putting Mr Petkov's approval rating at 43 percent, which is topped only by President Radev.

This was hardly a surprise. Mr Petkov's image: a young, Western-educated family man who does not shirk probing questions appeals to Bulgarians tired of grumpy middle-aged men like Slavi Trifonov and Boyko Borissov berating them on Facebook. Besides, Bulgarians love an underdog - Mr Trifonov's project kicked off when Parliament ignored his referendum on election rules and Mr Borissov launched his political project after coming into conflict with his then-superior, socialist Internal Minister Rumen Petkov.

The big question is this: what are Mr Petkov's plans? Would he launch a brand new party - something many expect - and if he does, what would it be like? A new personality-driven formation? A "Presidential" party getting support from Rumen Radev, who nominated Mr Petkov for cabinet minister? Or maybe he will join the ranks of Democratic Bulgaria, with which he has sympathised in the past?

So far Mr Petkov refuses to talk. Whatever the answer, Bulgaria seems to have a new saviour in the making. We should be enthusiastic, but also wary, because we have seen plenty of messiahs over the past few decades (the last one - Trifonov, fizzled out in just under 6 months) and so far they've done us little good.

1. Politics this week:

Socialist leader Kornelia Ninova failed to attract enough support for a cabinet with the third mandate

Photographer: Georgi Kozhouharov

BSP can't form a government. Third election looms

On Thursday afternoon socialist leader Kornelia Ninova said that she will return the third and last mandate to form a cabinet to President Radev on Tuesday, 7 September. After she met TISP for five minutes (just so they blew her off) and did not even manage to see representatives of Democratic Bulgaria, it was clear that there was no chance of BSP passing any cabinet they could have proposed. So it is official - Bulgaria will undergo yet another round of Parliamentary elections within the next two months, the third national election this year. The exact timing of the new vote is President Radev's call next week, when he will have to dissolve parliament and choose a date.

Presidential elections on 14 November

Talking about President Radev, he will seek reelection on 14 November. This was the date that MPs chose and agreed on in Thursday's vote. In practice, that is the last possible date the elections can take place, as a potential runoff will happen the following Sunday, 21 November, which is precisely two months from the end of Mr Radev's official mandate.

Now, the ball is in Radev's court

Will he call the Parliamentary election for the same day and thus trigger the first "2 in 1" elections in Bulgarian politics (something he says he prefers to avoid)? Or will he instead choose an earlier date in October-November, which would potentially mean three consecutive weeks of elections? Both options have their risks - choosing the first one would mean that the Presidential and Parliamentary campaigns would be mixed up and likely cannibalize one another, while the second might mean voter (and voting administration) fatigue, exacerbated by the imminent fourth Covid wave. Talking of Covid

Government reluctantly imposes (some) Covid restrictions

Obviously, it did it out of the blue and just a day after we wrote this piece criticising them for acting in a similar manner to their predecessors from GERB, taking decisions based on political expediency rather than medical expertise. Anyway, if you've missed it, ignore the part of the text where we say no new measures have been imposed. But read it anyway, as it still provides a good overview of the situation with the fourth wave and the (absent) vaccinations.

The new measures include:

- The big unknown remains whether the school year will start with in-person attendance for some or all students, or whether it will be online. The prospects in any case are grim - either more sick students, parents and teachers, or another very, very hard school year for everyone.

2. Economics:

Good news for the state coffers - on Thursday the National Revenue Agency (NRA) declared that it has increased the collection rate for the first eight months of the year by 12.5 percent compared to the same period in 2020, reaching 9 million euros. This is mostly due to the higher collection of corporate taxes, individual earnings taxes and social security payments.

The information came a day after the Finance Ministry said that at the end of August the budget surplus had reached 442 million euro, a 100 million euro increase compared to a month earlier. As of August, the revenues in the consolidated budget reached 16 billion euro, which is 70.5 percent of the annual planned target.

They are up 2.3 billion euro, or 16.8 percent more than last year, but this is partly due to the one-time injections of 300 million euro payment from the concession of Sofia Airport. At the same time, expenditures reached 16.3 billion (or just over 62 percent of the annual plan). They are almost 2.75 billion, or 20 percent higher than reported in August 2020.

Record bank profits

Capital weekly reported on Tuesday that profits in the sector have reached 400 million euro for the first seven months of 2021, with overall banking assets reaching a record 65 billion euro. This is a 35 percent increase in profits compared to the same period of 2020, Capital weekly says. Compared to the booming pre-crisis year of 2019, however, it marks a drop of about 100 million euro. The increased earnings come from a growing credit portfolio, increase in income from taxes on operations and a decrease of guaranteed schemes' contributions and lower impairment charges.

Read more about Bulgaria's post-Covid economic recovery in our Monday piece.

3. Business:

Batteries

Battery manufacturer Monbat reported a 30 percent increase in sales for the first half of 2021. Company revenues fell to 68.8 million euro in the pandemic-marred H1 2020, and rebounded to 90.2 million euros for H1 2021. Sales began growing in the second half of last year and current results show a continuation of this trend. The bulk of the revenues (about 75 million euro) come from sales of lead-acid batteries, followed by the company's recycling business.

Insurance

Eurohold Bulgaria's bonds will be listed on the Sofia stock exchange. The insurance and finance group's bonds were placed privately at the end of last year and their entry into a regulated market means that the holding will have to meet certain financial indicators. The issue is seven-year, with an annual interest rate of 3.25 per cent.

Space

On 26 August, the European Investment Bank (EIB), the long-term lending institution of the European Union, and Bulgarian nano-satellite firm EnduroSat, announced a venture debt financing agreement of up to 10 million euro. The financing is offered under a newly available venture debt instrument backed by the European Guarantee Fund set up by the EIB to support EU businesses during the COVID-19 pandemic.

Retail

The export of 141 products made by 39 Bulgarian companies, especially for the German supermarket chain Lidl, reached 15 million euro in the first half of 2021. This marks a 44 percent increase in revenue compared to the same period of 2020, Lidl says. Products include premium beef meat by Tandem Popovo, baked goods by Hebar EAD and sunflower oil (Klas Olio AD), among others.

Find out more about Bulgaria's top 100 companies and how the pandemic affected them

4. Energy:

New price hike for electricity

After electricity prices remained stable at about 100 euro/Mwh for the whole of last week, on 30 August day-ahead prices reached 220 euro/Mwh, which is as high as at the peak of the energy crisis on 11 August. The difference - this time there are many more energy facilities up and running. The similarity - there is a lot of export of electricity involved, just as at the beginning of the month - about 1,600 Mwh compared to 4,200 Mwh domestic usage.

Energy regulator approves 20.5 percent gas price hikes for September

The State Energy regulator announced on Wednesday it has approved a 20.5 percent increase of wholesale natural gas prices for September and it will now sell for 35.5 euro per Mwh. The Energy and Water Regulatory Commission (KEVR) said the price hike was decided on the basis of information about the market indices of the European gas hubs and the average US dollar to euro exchange rate of the European Central Bank.

5. Watch out for:

People:

Dobri Mitev - the 49-year-old lawyer became the head of the Managing Council of the Union of Bulgarian Business after the death of businessman and media owner Radosvet Radev.

Date:

7 September - many things will happen then - BSP will return the mandate to form a cabinet to the President and he will have to choose a date for the early vote; also, the new Covid restrictions will be implemented and restaurant owners already say they will boycott them.