It is considered polite practice to give a brand new government a 100-day grace period. After all, we've all had new jobs - you need several days to even learn how to navigate your way to the nearest WC, let alone govern a country. This government had 1.
The new 4-party coalition government - between We Continue the Change, The Socialist party, There is such a people and Democratic Bulgaria - was voted into office on Monday and the first bomb exploded on Wednesday.
The ex-ruling party GERB tricked them into an ambush. First, the supposedly independent energy regulator, stuffed with GERB-loyalists, voted on raising energy prices from 1 January, instead of waiting until the end of the regulatory period - July 2022. And then, when the new coalition rushed to find a solution in parliament, GERB offered a total moratorium on prices - something the grateful ruling parties voted in.
It took several hours for the new cabinet to understand what had happened.
The moratorium (apart from being an awful way to deal with economic uncertainty) fixed prices from 1 January 2021 and had no deadline. Since the regulator already changed them in July this year, this meant total legal chaos - retracting the price to a lower level, interfering with thousands of contracts and basically bankrupting the energy sector.
The new chief of cabinet of the prime minister - Lena Borislavova (a lady we will be hearing a lot from) rushed in to clear up the mess and did some damage control on the TV and in parliament. In the end, the new vote set a deadline for March and fixed the prices at their current level - still not a perfect decision but at least granting some breathing space.
Yet this shows the first big problem facing the ruling coalition. Kiril Petkov and Assen Vassilev (PM and deputy PM) moved all their big guns to the government, leaving behind no one capable and experienced enough to steer the coalition in parliament. None of their coalition partners - except the Socialists - was of much use in this first test and the opposition, in the form of GERB, will be relentless from day one.
If they are to last, this needs to be dealt with quickly. Other, bigger tests are coming fast.
This week's newsletter was co-produced with
Martin Dimitrov & Anina Santova
This is the last newsletter of this (first) year of K Insights. Thank you for sticking with us through this energetic, dazzling, at and times very tiring year. Hope you have a lovely and warm holiday season and see you all in the New Year.
POLITICS THIS WEEK
Speaking of tests: Northern Macedonia
The favorite (and practically only) topic of Bulgarian foreign policy made international headlines this week yet again. In an interview with the Financial Times on the day of his inauguration new Prime Minister Kiril Petkov said that he expects a breakthrough in relations with Skopje "within six months".
This did not make Macedonians very happy: "Six months is too long a period given the situation confronting the region. I think this approach does not satisfy us," N. Macedonian Foreign Minister Bujar Osmani told local TV 24.
Yet, to be honest, this is probably not even a real timeline, but more of a sound bite. Bulgaria still hasn't moved an inch: president Rumen Radev said on his visit to Brussels on Thursday, "This process is going to be led by results, not deadlines."
If you want to know more about why that is: Kapital Insights explains it in our article on Tuesday.
Green certificates? Yes, minister
While various new ministers were assuming their positions, domestic media coverage focused on the first promise of the Petkov cabinet - introducing compulsory Green Covid Certificates for everybody working in the Public Administration.
The result was not surprising for anyone who watched the famous 1980s BBC series "Yes, Minister", where a cunning public servant manages to derail a new government minister's zeal for change. In a very "Yes, Minister" type of development, the administration welcomed Petkov's promise and it will enter into force from March next year.
This leaves privately owned public spaces such as restaurants and shopping centers feeling like fools: they still have had to abide by stricter Covid-19 prevention rules throughout the winter.
A not-so-cheesy affair
Clouds are gathering around Prosecutor-General Ivan Geshev. He received a rather cool welcome from the new Minister of Justice (see the video of the week below); meanwhile, the investigative website BIRD.bg published a report alleging Geshev had participated in a business-raiding scheme.
According to the investigation, in 2013 - when Mr Geshev was just a low-ranking prosecutor - he was approached by the co-owner of the Josi diary brand Georgi Georgiev, who confessed he sought assistance to take over the entire business from his partner.
In return, he transferred a share of his company to Mr Geshev's father, but instead of eliminating Mr Georgiev's partner, the prosecutor turned against him and thus he lost everything. The chilling account of Mr Georgiev, who has filed reports with the Interior Ministry and the Ministry of Justice, has been confirmed by documents available in the Commercial Register, BIRD.bg claims.
So now, the only question that remains is: who can investigate the Prosecutor-General?
Which, coincidentally, is the question the European Commission is asking - see below.ECONOMY
Is there a plan for the Plan?
The EC returned Bulgaria's Recovery and Resilience plan - with a lot of comments. To be precise, 44 of them. We will go into more detail next week when K Insights will publish an article about that. But a quick overview:
- Energy transition needs to be dealt with in a more robust way (think coal ban in this decade).
- Transport strategy sucks. Big time.
- The Prosecutor General needs to be investigated by someone and this someone needs to be independent.
The person to do it:
Assen Vassilev. The new finance minister gets the EU portfolio also and will be writing back to Brussels ASAP if we are to get any funding next year.
Figures:
7.3%
Is inflation on an annual basis, which is the highest level since 2008. Transport prices rose the fastest - 23%.
23%
Is the growth of Bulgarian exports in October, according to national statistical data. This is 14% more than the pre-pandemic 2019.BUSINESS
Stock exchange
Dronamics Capital
The company attracted strong investor interest on the BEAM market of the Bulgarian Stock Exchange (BSE), with the offering oversubscribed by almost 4.5 times. The company, established to invest in cargo drone manufacturer Dronamics Global Ltd., raised the maximum planned amount of nearly 6 million levs (3 million euro) by offering investors 5,334,081 shares with a par value of 1 lev at an issue price of 1.1 levs earlier this month.
HR Capital
Also managed to fund itself with 1.5 mln levs on the stock market, while the offers were for over 10 million levs. On Friday a new investment round is looking to bring another million into the company. ENERGY
A moratorium is in place
as already mentioned - until March. Yet this covers only household prices. So what happens with business rates? Nothing, for now. Until the new cabinet figures out a way to help the business, it will pay record-breaking prices for electricity - 300 euro per MhW on Thursday. The compensation package ran out in November and there are no new measures planned. For now. Expect urgent developments on that front.BRUSSELS
- Passenger trains should travel at 160 km/h or faster by 2040 in order to create competitive high-speed rail links across the Union. This is part of the European Commission's plan to improve connectivity and support rail transport as a way to achieve the goals of the Green Deal and reduce emissions by 90% by 2050. They should, but could they - for example in Bulgaria, where it still takes 17 years to renovate Burgas-Sofia?
- As a follow-up to the Global Methane Pledge in partnership with the United States, in which more than 100 countries have pledged to reduce their methane emissions by 30% by 2030 (compared to 2020 levels), the Commission will require the oil, gas and coal sectors to measure, report and verify methane emissions. So expect a little bit more on top of your methane bill, if you are using this kind of fuel.
WATCH OUT FOR
PEOPLE
Bozhidar Bozhanovthe new minister of Digitalization and e-governance has pledged to introduce e-identification and eliminate much of the useless paperwork in Bulgarian administration in the next few months. Godspeed!
Lena Borislavova
The 31-year-old lawyer left her position as an MP to become cabinet chief of Prime Minister Petkov. In her two working days, she has already had two public appearances in which she responded to media queries. Watch out for a meteoric rise to fame.
DATE
February 2022: The deadline new Justice Minister Nadezhda Yordanova gave herself to have found a way to fire Prosecutor General Ivan GeshevWatch her here: Roses are red, violets are blue, I want to discuss your resignation with you
COMPANY
Financial Times and CapitalOpened their content for high school students. Both newspapers want highschoolers to have more financial culture and exposure to quality content. FT has an automatic system for registration for schools, while Capital is still working on it, but willing schools can apply by mail.
PLACE:
Ski Resorts of Bulgaria, which open for business (and skiing) from tomorrow, 18 December
Words of the week:
Sin Talon (Blue Coupon)If you are not Bulgarian, this is going to puzzle you: there is a blue piece of paper you need to carry around together with your driver's license. To show how many "driving points" he/she still has - every Category B driver starts with 39 and loses some for relatively minor transgressions.
This is a relic: every police officer has access to the digital records of any driver and, respectively, to his or her "driving points."
Hopefully, the blue coupon will not last much longer. That is what Bozhidar Bozhanov promised. Barring any new "Yes, minister" moments, this might actually happen.
It is considered polite practice to give a brand new government a 100-day grace period. After all, we've all had new jobs - you need several days to even learn how to navigate your way to the nearest WC, let alone govern a country. This government had 1.
The new 4-party coalition government - between We Continue the Change, The Socialist party, There is such a people and Democratic Bulgaria - was voted into office on Monday and the first bomb exploded on Wednesday.
