The week was one of protests and blockades across the country, and especially in Sofia. While those on the streets demanded special concessions from the government to ease the pain from soaring inflation, there was an undoubted political motive to it all.
Among the protesters were international carriers, well aware that fuel prices in Bulgaria are among Europe's lowest, but still wanting the government to subsidize the fuel they use. Then there were bus companies that currently use most of the roads for free, want this to continue and are trying to derail a proposed toll system for heavy vehicles outside the highways. All of them joined to demand a reduction in VAT and excise duties, and more subsidies, although they have the option (which they are gladly using, by the way) to pass the burden of increased fuel prices to their end customers.
The situation may sound ridiculous, but, in reality, hundreds of trucks and buses chose to block major thoroughfares. And because the industry's demands are either unacceptable or simply cannot work, their protest turned political with calls for the government to resign.
This demand is hard to justify. How is the cabinet's decision to reduce (or not) excise duties on fuels in Bulgaria supposed to help international carriers, operating across Europe, where they buy most of their fuel at much higher prices? When it comes to toll taxes, the cargo companies complaining about their introduction don't seem to be bothered, celebrating lavishly with the toll collection intermediary - TollPass (Intelligent Traffic Systems AD) exactly as they urge their workers to take to the streets, a video published earlier this week shows. A feast in times of plague, one can say.
Also, from the lamentations of carriers you'd be forgiven for thinking they are almost bankrupt. In fact, the number of trucks crossing the borders has increased by over 18 percent year-on-year and business is currently flourishing.
Closer scrutiny of the blockaders - both from the carriers' side, and from the Sofia Urban Transport side - shows they have close ties to the government. Union Ivkoni, the largest coaches firm and a leading protester, was owned until recently by former GERB MP Ivaylo Konstantinov, now Executive Director of the National Association of Bus Operators. Other protesting companies, like speditor PIMK and other businesses linked to Mr Konstantinov - are registered fuel traders, which makes their demand for compensations to counter fuel prices strange, to say the least. The Sofia Urban Transport workers, who blocked the city on Wednesday, were co-organized by GERB city councilor Ekaterina Yordanova, who is simultaneously a leader of the city's Transport Union
All this is not to diminish workers' right to demand better pay or help in this time of crisis. Yet, if their protest is hijacked by the opposition to fan the flames of fury, then only greater instability and suffering will ensue for everyone. And the result won't be pretty - just check out the polls.
1. Politics this week:Polls don't look good for the government Three polling agencies - Gallup International, Market Links and Trend - published their electoral attitudes surveys this week. All three show very similar trends - and none of them make happy reading for parties in the ruling coalition.
WCC continue their descent in the polls, down to 17-18 percent, while their main opponents, GERB, enjoy stable support, comfortably ahead on 23-25 percent of the vote, if elections were today. BSP and Democratic Bulgaria seem to have halted their decline, but there is little to envy in their single-digit results, while TISP is in complete free-fall and barely passes the 4 percent barrier.
On the other hand, all agencies record the continuous rise of pro-Kremlin Vazrazhdane, which already aims to become the fourth largest party, overtaking BSP in two of the surveys, and on about 10 percent of the vote. According to Market Links, its leader Kostadin Kostadinov is already more popular than Prime Minister Kiril Petkov (19 percent positive rating compared to his 17). The other leader on the pro-Russian front, former caretaker Prime Minister and Defense Minister Stefan Yanev, also boasts the second highest personal rating after the President and is transforming it partially into a 6-8 percent support for his newly launched Bulgaria Rises party.
N. Macedonia, we just can't be friends
In addition to these surveys, Gallup International - which really likes to probe the topic of Bulgarian-N. Macedonian relations - asked their respondents what is more important - that Sofia lets Skopje launch its EU bid, or that the two countries resolve issues between them first (which, from the Bulgarian viewpoint means complete abdication from Macedonians of any sense of a separate history and identity). Unsurprisingly, almost 70 percent said the latter takes precedence.
Hence it's hardly surprising that the first event of the newly established Club for Bulgarian-Macedonian Friendship, founded in early May by liberal Macedonian and Bulgarian intellectuals with the goal of finding alternative pathways to breaking the ice between the two nations, was thwarted by VMRO MEP Angel Dzhambazki and activists from the nationalist party.
It was supposed to be a talk between former Macedonian Prime Minister Lyubcho Georgievski and historian Assoc. Stefan Dechev, two of the leading co-founders of the club. In the words of Dzhambazki, who was broadcasting on Facebook, the action was against holding a "Macedonist gathering" in Sofia. Eventually the organizers abandoned the event, which was one of the first attempts at a civic-led rapprochement between the two countries.
Soldati italiani, benvenuti!
And some good news for Bulgarian defense this week - the Council of Ministers announced on 18 May that Italy will take over the role of the "framework country", which will lead and coordinate the NATO battle group in Bulgaria. Sofia will invite Rome to send a combat unit of up to 800 servicemen together with their necessary weapons, equipment and machinery. The duration of the Italian forces' stay is not fixed - the cabinet said that they will be invited to the country "for the duration of the functioning of the battlegroup". In addition, 40 Albanian soldiers will also join the NATO unit.
"A contribution with formations from the armed forces of other Alliance member states is expected," the Council of Ministers added. Currently, one US mechanized infantry company with Stryker fighting vehicles and one British company have joined the prototype battlegroup. Also, once Italy takes over the leadership of the NATO battle group, the Bulgarian contribution to the unit will be reduced to one company of up to 140 troops and up to 15 staff officers. Currently, Bulgaria participates in the prototype group with an entire mechanized battalion, which will be downsized once the allied forces strengthen the battle group.
2. Economy:Government has a plan to fight inflation - a bad one, but a plan nonetheless
After a long and painful debate within the coalition, the cabinet finally announced its measures to combat the price hikes of basic products in recent months (inflation reached 14.4 percent in April). Most of them are debatable at best - according to many economists, they might actually serve to fuel the already serious inflation - or outright populist. Here is the list, so you can decide for yourself:
- Tax allowance for families will increase from 4,500 to 6,000 per year per child;
- Pensions go up by an average of over 20 percent from 1 July, plus the 60 BGN bonus;
- Zero rate VAT on bread, which will be offset by an increase in VAT on beer and wine in pubs back to 20 percent;
- Reduction of the VAT rate for heating, water supplies, gas and methane to 9 percent;
- A 0.25 BGN discount on every liter of E95 petrol and diesel without additives from 1 July;
- Increase of the VAT registration threshold for companies to 100,000 BGN;
- Taxation of excess profits from electricity generation;
- Electricity, natural gas and methane will be exempt from excise duty;
- Reducing the interest rate for late payments to 8+basic interest rate for companies and 4+basic interest rate for individuals.
The rate by which the Bulgarian economy grew in the first quarter of 2022. It is estimated that for the first quarter of 2022, the overall GDP of the state is 30.4 billion BGN.
1,055 billion euro
Foreign direct investment (FDI) in Bulgaria for the first quarter of the year. This marks a whopping 332.6 percent increase, or a spike of 811.8 million euro in nominal terms, compared to the same period last year.
The registered unemployment rate in April, according to the State Employment Agency, which is the lowest ever in Bulgaria's democratic history.
3. Business:M&A Kohlberg Kravis Roberts (KKR)
The US-based fund announced it will buy the owner of the second largest coal-fired power plant (TPP)in Bulgaria - ContourGlobal Maritsa Iztok - 3, another US company ContourGlobal, for just over 2 billion euros. The deal is expected to be completed by the end of the year.
FoodsNestle - Bulgaria
The company reported an 11.4 percent increase in revenues for Q1 of the year, which amounts to 80.6 million BGN. Nestle - Bulgaria's turnover for 2022 is expected to exceed 300 million BGN, also influenced by inflation.
Nearly 3 million consumers in the country will no longer receive their electricity bills from CEZ, but from Electrohold Bulgaria - the new name of the electricity supply company in Western Bulgaria, which is part of the Eurohold - Bulgaria holding from the summer of 2021.
As you might have seen earlier today, we officially launched the second Special Report by Kapital Insights - this time, on the topic of Bulgaria's Energy future. You can buy it from our store here.
It is divided into three general sections - Gas & Oil, Electricity Market & Regulations and Wind & Solar, each consisting of several in-depth pieces on the political, economic, business and regulatory sides of each of these topics.
- In the Gas & Oil section, you can find stories on how Bulgaria broke up with Gazprom, what are the country's alternatives and when they can become a reality, and why the lack of alternatives for Russian oil seems to be a bigger problem than gas dependence;
- In the Electricity Market & Regulations section, there is an inquiry into the details of the final version of Bulgaria's Resilience and Recovery plan, analyses on the rise of renewable sources and the end of the Belene Nuclear project, as well as on how the Energy Act is being rewritten.
- In the Wind & Solar section, you can read how every company can become an energy power plant, as well as a piece on how regulations to install one's own PV unit are on the way to be eased - and advice on how to finance a RES project.
And so much more, in KInsights' Special Report: The Energy Future of Bulgaria.
5. Watch out for:People:
The second Bulgarian woman to climb Everest, the world's highest peak earlier this week. Ms Azdreeva, who is from Petrich, also climbed the fourth highest peak in the world - Lhotse - within two days of her ascent to Everest, becoming the fourth Bulgarian, and the first Bulgarian woman, to ever do so. She was part of an organized expedition led by the legendary Nepalese sherpa Nirmal Pruja.
The two airports are kicking off the holiday season for real this week with dozens of flights connecting them to Western capitals. Find out more about the expectations of Bulgarian summer holidaymakers in our article from earlier this week.
23-25 MaySofia will welcome the holy relics of the apostolic brothers Methodius and Cyril, which will be exposed for public worship in the Sveta Nedelya Metropolitan Cathedral. They come from the Holy Monastery of Esfigmen in the Athonite monastic community. The relics can be seen between noon on 23 May and midnight on 24 May. The welcoming ceremony may disrupt traffic on 23 May, the Holy Synod warns.
Trudoustroyavane (Supported employment)
There has been a long-running joke in Bulgaria, at least from Socialist times, that one does not look for the right person for the job, but rather to find some job for the "right" person. We were reminded of this process, often mockingly called "trudoustroyavane," or "supported employment," this week when news broke of the new job procured by Betina Zhoteva, former head of the Media regulator (SEM). According to a RFL/RL - Bulgaria inquiry, she took a senior expert role in the Public Communications directorate of the State Prosecution. Despite her wide-ranging career in media and public communications, she never had anything to do with justice affairs - if we don't count her spite for the "anarcho-liberals and NGOs" that is shared by Prosecutor General Ivan Geshev. Even more absurdly, her hiring (without official contest) coincided suspiciously with the creation of a new position in the directorate that still has no description of duties - even Ms Zhoteva couldn't tell RFL/RL what exactly she'll be doing.