"Reforming an institution is like reforming a graveyard - you won't get any help from the inside." This memorable quote from the late Bulgarian constitutionalist Christian Takoff was used by Lena Borislavova - chief-of-staff to the Prime Minister - to describe the progress of the Petkov government's anti-corruption efforts.
Borislavova spoke at the annual conference of the Anticorruption Fund (ACF), an anti-graft watchdog that has carried out some of the most interesting investigations into the mechanisms of state capture in Bulgaria. It would have been great, if she had had something more to offer: the conclusions from ACF's latest report are rather blunt - they called 2021 a "Year Zero" for corruption investigations and lamented that "corruption at the highest level remains hidden".
Here are some numbers:
- 0 investigations launched last year
- 0 convictions for high-level corruption.
- 1 court decision on a corruption charge - an acquittal
This, mind you, in a year marked by nationwide protests against corruption and the inclusion of several high-ranking officials in the US Magnitsky sanction list. It seems nothing can force the supposed anti-corruption institutions - namely the Prosecution service and the anti-corruption agency, CIAF - into starting their work.
Take one of the biggest criminal investigations against high-ranking officials in the history of the country - the mismanagement of the Belene Nuclear power plant project that cost taxpayers billions. It all came to nothing with the case against two of the accused ministers being dropped and the rest following suit because of the expiration of the absolute statute of limitations for criminal prosecution.
Or the case against road construction officials for the tragic road incident near Svoge which caused 20 fatalities and sparked an opposition effort to check road repairs commissioned by GERB. It was returned to the prosecution for a second time, because of ineptitude and incomplete charges. This happens time and again, which points not only to corruption but probably, frankly speaking, to incompetence.
This, of course, is preposterous. But it is very, very dangerous also. Because it returns to haunt us all.
1. Politics this week:The captured state fights back 1
It took the state several arduous months to regain the border control of Kapitan Andreevo, which had been turned into a private holding, controlled by Eurolab 2011 company. The company, linked to shady interests, collected the fees for laboratory tests of food trucks from Turkey. In May, the Petkov cabinet terminated the contract and the state took over the testing of imported foods.
Just a month-and-a-half later, the Supreme Administrative Court (SAC) ruled on three separate cases on complaints by the company that the state's acts were illegal and reinstated Eurolab 2011 back at the border.
The three cases, which were filed with the SAC during the week and were to be assigned separately to different judges, were in fact assigned on the same day, with three consecutive numbers, all three ending up in panels with the participation of Georgi Cholakov, the head of SAC himself. Mr Cholakov is considered an appointment of the GERB-MRF status quo in the judiciary.
BSP gets final mandate - any chance of a cabinet?
On Monday, President Rumen Radev passed the third - and final - exploratory mandate to form a cabinet to the Socialist Party. This was the most logical and least risky choice, as BSP was the party that first stood behind Mr Radev's nomination in 2016 and the party was arguably the least troublesome member of the Petkov-led coalition in recent months. Does this improve the chances for a last-minute formation of a new cabinet?
Not by much. BSP launched a new round of negotiations with Democratic Bulgaria, WCC, TISP and the renegade MPs that left Slavi Trifonov's party before it took down the Petkov cabinet. But the differences, especially between TISP and WCC, appear irreconcilable. WCC wanted to nominate Assen Vassilev for PM once again - something TISP says they can't support.
Also, parts of BSP want Bulgaria to relaunch negotiations with Gazprom and reverse the decision to designate 70 Russians as persona-non-grata. This is a red line for WCC (especially if elections are coming), but also for Democratic Bulgaria - the silent third partner.
Hence - don't expect miracles, yet don't call it quits just yet.
Early elections might forestall second order for F-16s
The drama over the Bulgarian Air Force continues, as this week it became clear that the ever likelier early elections might sabotage the purchase of a second batch of 8 F-16 Block 70 jets from Lockheed Martin. That is because MPs have to approve the deal, which would likely cost an additional 2.5 billion levs of taxpayer money before 1 November and there might not be an active Parliament at that time. While a theoretical delay would not have been such a big deal in normal circumstances, the rising prices of materials may make a renegotiated price even higher - and harder to digest by the public.
EU straight ahead! Sofia and Skopje sign bilateral protocol
The foreign ministers of the two countries finally signed the protocol, as negotiated by the French-led EU Presidency in the past few months, which covers most of Bulgaria's requests and thus lifted the first (but not the last) barrier before the N. Macedonian and Albanian EU accession process.
N. Macedonia still has to introduce Bulgarians into its list of constitutionally recognized groups before real negotiations begin, but at least Tirana can finally proceed unobstructed by the Bulgarian veto.
From the week: Russia's invasion of Ukraine might prompt the rearmament of Bulgaria's military
2. Economy:Captured state fights back - 2
A few days before the dissolution of the current cabinet and parliament, the Road Infrastructure Agency (RIA) issued a decision that practically allocated the biggest public procurement in three years to the same companies that won the controversial Hemus motorway bids. The tender, worth more than 1.5 billion levs, was for the first 75.6 kilometers of the Ruse-Veliko Tarnovo motorway.
All this despite Prime Minister Kiril Petkov ordering the Ministry of Regional Development not to award public works topping 900,000 levs, and after scandals around road contracts practically brought down the government. RIA didn't offer any explanation except that the tender was due to expire.
Audit Office: RIA illegally signed toll-system contract with Kapsch
Speaking of the RIA, this is far from the only suspicious contract they signed. After an audit that took more than two years, the National Audit Agency announced in a report that RIA had committed illegal actions by signing a contract for the management of the toll system with a specific company. The audit claims that the 118 million levs awarded for the maintenance of the toll system through "contracting without prior announcement" was illegally given to the company Kapsch Traffic Solutions.
From the week: Increase in real estate deals slows down in Q2 compared to first one
The inflation rate in June on an annual basis, according to NSI data. That's a two-decade high that has not been recorded in Bulgaria since 1998.
This is by how much Bulgaria's trade deficit shrank in May this year, compared to last year, according to preliminary data from the Bulgarian National Bank (BNB).
871,2 million euro
Foreign Direct Investment (FDI) in Bulgaria for the first five months of the year, which is an increase of 177.6 percent over the same period in 2021.
3. Business:Bicycles Eljoy
Two years ago, at the height of the pandemic, a group of funds and business angels invested 630,000 euros in the Varna-based e-bike component company. Now, against the backdrop of an expected recession, the firm has managed to attract a further 6 million euro in funding from existing and new shareholders.
DearyDeary Food Bulgaria
The Sevlievo-based light processing company invested more than 6 million BGN in a new production building, equipment and to improve its energy efficiency. The new production building will cost 1.5 million BGN (from its own funds and a bank credit). It will cover 1800 square meters of floor area and will be ready in the spring of 2023.
The Russian SPA project in Sapareva Banya, which started in 2013, but stopped within months, will be resurrected under the luxury French Accor brand. The Aqua Entertainment investor, which is 75 percent Russian-owned, has announced that it will open in November 2024.
4. Energy:Gemcorp memorandum suspended after Parliament inquiry
Prime Minister Petkov announced on Wednesday that the cabinet will withdraw from the memorandum it signed back in May with the controversial investment fund Gemcorp, which allegedly has Russian ties. "We suspended [the memorandum] so that this topic disappears from the public space," Mr Petkov unconvincingly commented, failing to add any details. Check out KInsights' piece on the memorandum, which caused political tremor.
Chiren 42 percent full
Currently, the gas storage in Chiren is 42 percent full and reserves in it are increasing by about 1 percent every two days, according to the chairman of the Energy and Water Regulatory Commission (EWRC) Stanislav Todorov, who spoke to the National TV on Thursday. He claimed that if these filling rates are maintained, the gas storage facilities will most likely be completely filled by the end of October.
Overgas signs 1 billion cbm LNG deal with Excelerate Energy
Buglarian natural gas supplier Overgas and US company Excelerate Energy have agreed to cooperate in supplying up to 1 billion cubic meters of liquefied natural gas (LNG) to Bulgaria through a new terminal in Vlora, Albania. If the deal comes to fruition, this quantity would be equal to a third of Bulgaria's annual needs, which together with the Azeri contract through TAP would ensure almost 70 percent of consumption. However, deliveries cannot start until the floating terminal in Albania is complete, which is not expected to happen until the end of 2023.
5. Watch out for:
The Constitutional Court ruled on Thursday that the appointment of the head of the Energy and Water Regulator (KEVR) contravened basic law and he ought to be dismissed. Mr Todorov, in turn, announced that the regulator would cease its work forthwith and called for Parliament to launch an immediate procedure for his replacement.
The coal power plant, which is among the biggest polluters in Bulgaria, finally saw a Prime Minister on site. Kiril Petkov and the Environmental Minister came on a surprise visit to check the emissions. No surprise there - they were high above the threshold. Also it was the first time a PM mentioned that the company might, in fact, be linked to energy oligarch Hristo Kovachki.
The family-owned plastic packaging company with a turnover of 20.4 million euro in 2021 attracted the interest of CEECAT Capital, which acquired a majority stake in it. Read the full story, published this week on KInsights.