The week: Borissov’s EU accomplices, Energy woes and 2.25 billion euro in state bonds

EPP's move is yet another attempt by the largest European party to launder Mr Borissov's image and shield GERB from corruption allegations just before the upcoming 2 October snap elections.

See, EPP's attitude towards corruption in Bulgaria has always revealed an inherent contradiction. Official censure of GERB's dubious actions, even when certain scandals were backed by concrete facts, has always been muted. Mr Borissov always counted on EPP's "full support," whether in the European Parliament, the Commission or the EU Council. On the rare occasions when there has been criticism of corruption in Bulgaria (beyond the technical CVM reports of the Commission that stopped a few years ago) on the political level, it has never been properly addressed, as if it were a natural phenomenon. Mr Borissov was always legitimized by his political family in return for his unconditional support for whatever they demanded of him. GERB's more than 10-year rule was characterized by growing corruption but the EPP steadfastly ignored Sofia's role throughout.

This is unfair to European and Bulgarian taxpayers whose money is leaking into Bulgarian corruption networks. Worse still, this attitude has been shared by all European parties. The Party of European Socialists (PES) did not see the corruption during the Oresharski government of 2013-2014. Nor did the party of European liberals, ALDE, which has since then even appointed Ilhan Kyuchuk, representative of the MRF, as its co-chair. ALDE not only ignores MRF's role in corruption in Bulgaria, but also supported the MRF against the Magnitsky sanctions on notorious MP Delyan Peevski.

These are just the Bulgarian examples of the EU's flagrant and often self-inflicted inability to fight corruption. By erecting umbrellas over their selected local partners, European parties make it almost impossible to solve the most socially erosive issue in the Union.

This newsletter was helped by Anina Santova

1. Politics this week:

Talking about umbrellas, the case of Georgi Semerdzhiev, the drugged driver who killed two young women on 5 July in central Sofia, continues to unravel, exposing the rottenness at the heart of the State Police. On Monday, Interior Minister Ivan Demerdzhiev said the detailed report following the 166 km/h crash in the heart of the capital exposed "startling data" regarding 40 Interior Ministry employees who had provided some form of protection for Semerdzhiev, including three senior officers. Instead of sending him directly to the State Prosecution for his over 50 serious breaches of the traffic law, the senior police cadres had "downgraded" them to administrative offenses. This inevitably gave the driver free rein to continue his road onslaught.

Absurdly, these conclusions would not automatically lead to sanctions for the unnamed police officers. A kafkaesque catalog of disciplinary proceedings, establishment of the circumstances, collection of evidence, seeking explanations from the implicated officers etc. would be initiated before that, and the deadlines for their completion are, as always, unclear.

Oh, and add to that the separate revelation by the Internal Ministry made in the aftermath of another deadly disaster - that of a bus, carrying migrants, crashing into a police car last month and killing 2 officers. Apparently, dozens of border guards have been assisting refugee smuggling operations for years. So police corruption kills not only innocent bystanders, but also their own.

DANS opens its eyes to Russian spying

The State Agency for National Security (DANS) has finally discovered the existence of Russian espionage in Bulgaria! In its annual report for 2021, published by the Council of Ministers, the agency notes that Moscow has mobilized "a complex toolkit, including diplomacy, military force, special services, economic leverage and dependencies (mainly in the energy sphere), information propaganda and disinformation campaigns, and cyberattacks" in the country.

These "findings" are quite surprising, for one simple reason - in recent years Bulgarian counterintelligence paid scant attention to threats to national security posed by Russia. The most glaring examples are overlooking explosions in military depots since 2014 or the lack of investigation of the 2015 poisoning of arms dealer Emilian Gebrev and his associates, which became known as the "Bulgarian Novichok" and was only investigated after the UK got involved. Better late than never, though!

Democrats and radicals trust social media the most: Survey

A study of media consumption habits published by the Open Society Institute (OSI) this week showed some interesting trends. According to the survey, the overwhelming majority of Bulgarian citizens tap online media and television as the main source of information about the country's state of affairs.

Online media, including social media, is the main source of information for most people under 50, those living in the capital, university graduates and somewhat bizarrely, for supporters of Democratic Bulgaria and Vazrazhdane - the most pro-Western and pro-Russian parties respectively! The likeliest explanation is that the supporters of both parties mostly trust their camp's "influencer-politicians," who are more active on social media than in the mainstream.

For everyone else the main source of information continues to be television, while radio and newspapers are the main source of information for a relatively small group, the survey claims. More than 70 percent of Bulgarians watch TV daily, and more than half of them go online daily.

Economy:

Bulgarian grain producers - the representatives of the largest and most subsidized agricultural sector in Bulgaria - announced with pathos that they are facing mass bankruptcies because of the "uncontrolled and unregulated" import of cheap, poor quality and allegedly dangerous grain from Ukraine. They also demanded that the state protect them by imposing restrictions so that this grain does not remain on the Bulgarian market. This, of course, was welcomed by a huge public outcry, but in a shaky, pre-election moment their demands could easily be recognized by a certain significant political party.

Good news for the Sofia metro

Sofia's subway will extend from the Military Academy through the "Slatina" district, reaching "Tsarigradsko shose" blvd. Its construction includes six new metro stations and will begin in 2023. The extension was adopted on Wednesday with an amendment to Sofia's General Development Plan, voted by the government.

Figures

The funds raised by the caretaker government, which issued 7- and 12-year bonds on the market on Thursday for the first time in two years. The money will cover to a large extent the necessary financing for the state budget for the rest of the year.

41.7%

Is the export growth as of July, compared to a year earlier. In the first seven months, over 54 billion levs worth of goods were exported from Bulgaria, according to preliminary data from the NSI.

17.7%

Is the (massive) year-on-year inflation recorded in August. It already exceeds the values seen at the beginning of the global financial crisis in 2007 and is comparable to levels last seen at the end of 1998.

3. Business

The e-bank has now also launched a system for online payments in Bulgaria. The new service is based on the principles of Google Pay and Apple Pay and enables quick payment with one-step confirmation.

Export

Bulgarian companies exported over 150 million levs through Lidl for the period from 2019 to 2021. In these three years, 252 products of 58 Bulgarian companies reached 27 foreign markets, it became clear during a press conference of the retail chain.

Energy

The largest coal mining company in Bulgaria - Mini Maritsa-East, reported a profit of 39 million levs for the first half of the year. The state-owned company realized a 58% increase in revenues, reaching 406 million levs. The comparison with the first half of 2021 is shocking - then the mines operated at a loss of 8.5 million levs. The reason for the change is a huge increase in production.

Startup

The Bulgarian start-up for food with an expiry date attracted 300 thousand euros. Half of the funds emanate from the Innovation Capital fund, which works through co-financing from the European Regional Development Fund.

Hotels

The five seaside hotels in Sunny Beach and Obzor with nearly 2000 rooms, owned by the former general director of Lukoil Bulgaria Valentin Zlatev will be rebranded under the Hyatt brand, the Tera Tour Services firm that operates them announced on Tuesday.

4. Energy:

If one Bulgarian coal power plant again exceeds air pollution standards, all the coal-powered TPPs might be forced to shut down. This may sound extreme, but in the words of caretaker energy minister Rossen Hristov, it is a fact. He claims that the deleterious consequences of environmental violations are not only dangerous for people's health, but pose a huge risk to our entire energy system. The minister's statement refers to the operation of the Maritsa 3 TPP near Dimitrovgrad, which is linked to the energy mogul Hristo Kovachki. On 11 September, the plant was once again shut down at the request of the regional eco-inspectorate in Haskovo, after the inspection already tried to force the plant's hand as early as April. However, its ordinances were later overturned by the Supreme Administrative Court due to "the need to protect the opposing public interest from the termination of employment of over 200 workers".

EU energy measures might hurt Bulgaria

The proposed European Commission cap on the revenues of power plants producing cheap electricity has so far largely been ignored by most Bulgarian politicians. But some Bulgarian economists have claimed that it would directly harm Bulgarian interests. The proposal, presented by Commission President Ursula von der Leyen as part of a package of measures to tackle energy problems of the union, envisages imposing a 180 euro per Mwh limit on the revenues of nuclear power plants, coal-fired power plants and electricity production from renewable sources. Any revenue above this limit should go to the state budget and from there be redistributed as aid/subsidies, so that household and SMEs' electricity bills are affordable. Moreover, large exporters of electricity - such as Bulgaria - will have to share the budget revenue they collect with the countries importing the electricity, which would be against Sofia's interests.

5. Watch out for:

The radical leader of the pro-Russian Vazrazhdane party is the most popular Bulgarian politician at least on social media. According to Facebook data to which Capital weekly is privy, over the last month he and his party's Facebook profiles have attracted a whopping 1.4 million likes, shares and comments, or 37% of all interactions with pages and profiles of political parties in Bulgaria. Far behind, on second and third place, are GERB and WCC with 17% and 10% of interactions, respectively.

Date:

Bulgaria celebrates its Independence Day on Thursday, so don't expect to find anyone in the office from Wednesday onwards.

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