The week: The private border of Bulgaria and the EU, are we still on track for the euro and a stellar year for banks (so far)

The first border between the EU and Asia Minor

The week: The private border of Bulgaria and the EU, are we still on track for the euro and a stellar year for banks (so far)

K Insights 03/06: what happened with the refugees

Огнян Георгиев

The first border between the EU and Asia Minor

© Георги Кожухаров

Write Global South in Google. Then take a look at the map that's coming out.

You will see a visible geographical division that's following the rather blurred lines between the haves and the haves-not in this world.

Let us follow those lines.

In the Americas, the division is clear - the Mexican-US border is the obvious clash point, where hopes for a better life meet reality, where border guards meet throngs of migrants, and where mighty cartels run the show.

In Europe though, it's a bit more complicated. While the map considers Russia and Turkey part of the Global North, the first one is currently a closed space on a war footing, and the second is more of a bazaar between the East and the West. Leave aside the Mediterranean, that sea of hope, and you're left with a sliver of land right on the upper western border of Turkey, where it touches the EU.

Welcome to Kapitan Andreevo: the busiest border crossing on the only EU land border with Asia Minor.

On a normal day, more than 2500 trucks pass through the border between Bulgaria and Turkey, en route to the biggest and wealthiest consumer market in the world. As the first point of entry in the Union, this is the place where they are checked, vetted, and deemed safe. Foods and their sanitary documentation, plants and animals, meet: everything is checked here, before it reaches shopping aisles in France, Netherlands and Denmark etc.

It should all be performed by the Customs agency and by the Bulgarian food safety agency.

Yet it's not.

Last week it transpired that a private company has been tasked with checking the cargo, testing it and presenting the results to Bulgaria's authorities - who have been accepting them mostly on face value. And this has been going on for more than 10 years. That's mind blowing: imagine the US outsourcing its power to vet the entering cargo trucks from Mexico to a private company with little previous history. The company in question "inherited" the contract and the workers from another company, which had connections to shady figures from the past.

Kapital Insights has learnt from an insider that things were even more troublesome: while checking the cargo, the company often had no oversight from customs officers and there wasn't a single video tape over the years to verify any check.

And to top it all off: the company has been in effect controlling the cargo stream not because it has won any procurement, but because it had a rent contract. Yes, it has rented the entire free space for food safety checks and for cargo representation offices on the border and there was literally no space for competition.

It's too early to tell what exactly has been going on at the border. Yet signs are pointing in one direction: the new head of the Food Safety Agency has been offered a 3 million euro bribe so as not to touch the contract. The deputy minister in charge and the MP who sounded the alarm have been receiving phone threats.

"In Mexico, law enforcement is an entrepreneurial activity," says one of the heroes in the US-Mexican drug drama "Traffic". This was true for Bulgaria for the better part of the past two decades. It's probably high time to prove otherwise.

This newsletter was helped by

Martin Dimitrov


The refugees: too much talk and no communication

These lyrics from the 1990s hit song describe the debacle of transferring Ukrainians from private hotels, where they have been accommodated over the past three months, to state-owned holiday properties. Despite repeatedly claiming that there was a plan to deal with the asylum seekers after 31 May - the date marking the start of the holiday season on the seaside - what ensued in reality was pure chaos.

It turned out that the authorities were extremely late consulting Ukrainians on where they would prefer being moved to. Then, they failed to properly inform them where they were taking them, with people (both Bulgarian helpers and Ukrainians themselves) claiming that hundreds were simply summoned to bus and train stations at specific hours, without any information on their destination. Obviously most refused to leave.

To compound matters, the Deputy Prime Minister responsible for the refugees, Kalina Konstantinova, scolded them over a pre-recorded video, with Prime Minister Kiril Petkov joining in by saying that "the luxurious lifestyle" the state offered so far could not continue indefinitely.

Many Ukrainians were moved to the Elhovo and Sarafovo refugee camps, where they had to spend a night or two in tents, with little food or heating.

While the situation was slowly resolved by the end of the week, with people moved out of Elhovo and finally sent to state-owned holiday homes (and Ms Konstantinova apologizing for her stern tone), the whole story left a bitter taste. It also fed Russian trolls with a new narrative - about the ungrateful, pretentious Ukrainians.

Referendums, referendums all the way!

When Bulgarian politicians feel that a favorite issue they use (and abuse) to gain electoral traction is slipping out of their hands, or no longer being resolved on their terms, they start threatening to call a referendum on it.

Two politicians did it this week - first, Kostadin Kostadinov from Vazrazhdane, who called for a plebiscite on the topic of Euro adoption. The second one was President Rumen Radev, who implicitly warned that, even if the Bulgarian Parliament decides to drop the veto over Skopje's EU bid, he might call for a referendum. "The last instance is always the people and there are constitutional mechanisms for their consultation," Mr Radev said.

Russia oil embargo but not for us

A day after European leaders agreed to introduce an import ban on all Russian petrol transported via seafaring routes that ought to lead to a 90 percent reduction of oil imports from Russia, Prime Minister Petkov said that Sofia would receive a two-year derogation to the ban for its Burgas port. Hence, the country will remain the sole importer of Russian oil over a sea route and one of four (alongside Hungary, Czechia and Slovakia) to continue Russian oil imports for the next two years.


Still on track for the euro?

Bulgaria has been left out of the euro-track by the European Commission. In the new convergence reports of the Commission, Croatia is recommended for membership in the eurozone by 1 January 2023, while Sofia is left out to dry, because of non-sufficient legislation convergence and the inflation rate.

Yet Finance Minister Assen Vassilev said in front of the parliamentary committee after the report that Bulgaria is still on track for 2024 entry in the common currency. More than 100 laws need to be adjusted and the inflation rate needs to be kept low during a time of galloping prices. Yet Vassilev is still convinced we will be joining on time.

Thanks for nothing, Brussels

The reports came as a knife in the back for the ruling coalition, which has struggled to keep popular opinion in favor of the euro and has seen at least one of its members - There is such a People Party - delay the legislative process on purpose. The small, but loud fringe party Vazrazhdane has started a motion for a referendum on the matter.

And you can read here all about the anti-inflation measures of the government and why they are mostly populism.



Is the annual production inflation in April.

570 million levs

Is the budget surplus, although it has been going down lately. The revenues are up 11% compared to 2021, while expenditure is 8% up.

641 million levs

Is the profit of the Bulgarian banking system until the end of April. That's a whopping 32% over the same period last year and the highest ever recorded.



Is Bulgaria really rich thanks to them?

No, is the short answer. But if you want to find out why this myth persists, read on here.


Where can they go?

Bulgaria faces the uphill task of having to find accommodation for 60,000 refugees currently in seaside hotels whose owners want to kick off their summer holiday season. Integrating them in society and in the labor market are now pressing priorities - read it here.


  • The European Commission has given a positive assessment of Poland's recovery and resilience plan, an important step towards the EU disbursing €23.9 billion in grants and €11.5 billion in loans under the Recovery and Resilience Facility (RRF). The plan had been postponed a few times due to criticism from the Commission over aspects of the rule of law in Poland. The war in Ukraine and Poland's unequivocal opposition to Russian aggression have boosted the relationship with the EU.
  • The Commission has proposed confiscating the assets of sanctioned Russian oligarchs. The idea is to create a common framework for the freezing of assets, as well as to establish new legal grounds for their confiscation. There are a few of those in Bulgaria also


How much coal is enough?

Maritza-Iztok mines have sold 31.5% more coal in 2021 and are still in the red. Even though the sales have been going like crazy, the state-owned enterprise is still at 19 million levs (almost 10 million euro) loss.

Find out about opportunities for your business to finance a PV project for its own use in this week's article from the recently published KInsights Special Issue on the Future of Energy in Bulgaria (which you can read in full here).

Watch out for:


Borislav Mihaylov

the already infamous president of the Bulgarian football union got into the spotlight once again, for all the wrong reasons. He was pictured with a famous Singaporean betting mogul and was questioned by the website over possible match-fixing. He didn't answer questions and was caught getting off a private plane owned by Kiril Domuschiev - incidentally the owner of the current champion Ludogorets, who is not really supposed to be offering such favors to the regulator.



The new technology institute in Sofia, which is supposed to attract top-talent to the capital, announced its PhD programs and the scholarships. They are 36 thousand euros per year (a European level payment that's going to be quite an amount to spend in Sofia, to be honest).

Word of the week:

Seir (Buffoonery)

Bulgarians have rarely if ever held Parliament and MPs in high regard, and two incidents from this week give good reasons - and why the beautiful Turkish word "seir" (loosely translated as "buffoonery") describes parliamentary "work" pretty well. On Wednesday, Kostadin Kostadinov from Vazrazhdane and Iskren Mitev (WCC) almost got into a fight after Mitev called Kostadinov "kopeikin" (a derogatory term referring to the Russian coins aimed at offending Mr Kostadinov for his openly pro-Russian stance) and the Vazrazhdane leader retaliated by calling Mitev a "snail", all in front of schoolchildren who visited Parliament to mark 1 June, Children's day in Bulgaria.

Then, on Thursday, WCC MP and rap singer Hristo Petrov showed the middle finger to GERB MPs who lifted posters calling for the cabinet's resignation. All of this "seir" will certainly not help Parliament improve its single-digit rating any time soon.

Write Global South in Google. Then take a look at the map that's coming out.

You will see a visible geographical division that's following the rather blurred lines between the haves and the haves-not in this world.

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