The week: From Ruse to Sofia, or why elections might not be all that important

The first was with one of the biggest business owners in Bulgaria. Stanko Stankov is the founder and owner of Bulmarket group: a large conglomerate, dealing in biodiesel, fuels, rail cargo and other valuable stuff. He deals with everything from farmers to Lukoil and from consumers to factories. If you are looking for someone who knows the pulse of the economy, he is a rather good pick.

Talking with Stankov is a bit of relief after the onslaught of bad news, coming from the TV screen all day long. I asked him how he thinks the economy is doing these days. "Rather well", he answered. Yes, he says, energy and inflation are issues, but not insurmountable ones. Businesses are countering them - by changing to propan-butan, finding new suppliers, and charging customers more. Overall, Stankov claims, the mourning for the economy is a bit too dramatical.

The mixed signals coming from the government (whichever that happens to be) are the spanner in the works. For example, the idea of freezing the biodiesel add-on to the fuels made Bulmarket halt a business project worth hundreds of millions while they waited for clarity.

Subsequently, I spoke to the mayor of Ruse. He told me how much they had counted on the central government fulfilling promises for better infrastructure - a new bridge, a new highway (this traffic jam I've been part of is actually the result of a lot more business activity, which helps Stankov argument)

Yet they were doing what they could: he was doing the rounds convincing every ambassador that building more interconnections with Romania is good for everyone. While the neighboring country for years had dragged its feet, Russia is now a factor and the bottlenecks on the Danube are a worry for a far more powerful group than the transport companies: the military.

What if, I wondered, there is no reliable central administration for quite some time? There might not be one after those elections (see below). There might not be one for years to come, if you ask me. This will be bad, of course. But not necessarily the end of the world.

Unless something very corrupt, prone to stupid actions and disruptive comes by (still a possibility) municipalities and businesses will keep on doing what they do. Trying to find new ways to survive and thrive, possibly. Some will do better than others. Life, in short, will go on.

Do remember this after Sunday.

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POLITICS THIS WEEK

Yes, this Sunday people will be voting in the 4th parliamentary election in the space of just 18 months. The polls show no clear winners, and no clear path to a coalition. The two main outcomes remain a stalemate, or a muddle-through government, backed by the former ruling party GERB. You can read more about that in our in-depth analysis.

Bulgarians believe in democracy - but not in the law and its institutions

A fragile majority of Bulgarian citizens believe in democracy (52%), support the Euro-Atlantic orientation of the country and believe that the Western liberal democracies are the best governed countries in the world and should serve as an example for Bulgaria, a new report by the Open Society Institute and the Center for Liberal Strategies claims. At the same time, the majority of Bulgarians distrust the country's main democratic institutions, refrain from participating in organized forms of public life and believe that laws are not fair and are not applied equally and universally.

The real goal of a pipeline around Ukraine: to go around Ukraine

A leaked report from the National Security Agency (DANS), published by investigative website BIRD.bg exposed that President Rumen Radev, Prime Minister Boyko Borissov and the Speakers of the National Assembly had known as far back as 2017 that the Balkan Stream gas project (known as TurkStream outside Bulgaria) had as its main goal to isolate Ukraine from gas supplies by 2020. The report also claimed that Sofia will receive no gas through this pipe - which turned out to be true.

It is unclear why it took a whole secret service to get to those, rather obvious, conclusions.

Another military jet bites the dust

ECONOMY

Just like before elections last November, the Competition Commission (CPC) alleged on Thursday that Lukoil Bulgaria has abused its dominant position on the market and will be sanctioned under the Competition Protection Act. The company has 60 days to submit written objections before a potential fine is imposed (which did not happen last time). In late August, President Rumen Radev invited representatives of Lukoil to a meeting related to high fuel prices. No concrete results were announced from the meeting, but a few days later the retail price of A95H petrol in the Lukoil petrol station fell below 3 levs per liter.

Figures:

13.4

Is the growth in bank loans for August. It is mostly due to company loans.

155 million levs

At Monday's auction for a new issue of 5.5-year government bonds, only 150 million was placed against the 200 million sought by the Finance Ministry. Securing the 1.7 billion levs of government debt by the end of the year needed to cover maturities and the budget deficit is becoming increasingly challenging due to deteriorating market conditions.

1230 km

BUSINESS

The German producer is coming to Ruse (yes, the same), and opening a factory there. It will mean over 500 new jobs are opening up in the city for the production of AC systems and heating.

Venture capital

Bulgarian venture fund Eleven has contributed 1 million euro to an investment round by Macedonian freelance payments startup Native Teams. The total funding is 2 million euro.

Retail

The largest retail chain in the country, Kaufland Bulgaria, said it has invested more than 35 million leva in its 13th outlet in the capital, which will open in the Gorubliane district.

ENERGY

On Wednesday, the gas connection with Greece (IGB) formally received the so-called exploitation permit, making the physical transportation of any gas other than Gazprom's possible for the first time. This will officially happen on Saturday, 1 October, at an event that will also be the occasion for an international meeting between European Commission President Ursula von der Leyen, the Presidents of Azerbaijan, Serbia and North Macedonia - Ilham Aliyev, Aleksandar Vucic and Stevo Pendarovski, as well as the Prime Ministers of Greece and Romania - Kyriakos Mitsotakis and Nicolae Chuka, in Sofia.

This ends a decade-long saga and the "prize" for that is an immediate 32% reduction in the price of gas for October in Bulgaria due to the receipt of the full volumes of Azeri gas at the long-term contract price.

WATCH OUT FOR

One of the most elusive Bulgarian business figures, the former owner of Vivacom, Spas Rusev, has acquired Bulgaria's largest TV provider, Bulsatcom.

Date:

Is the new date until which Fraport will be operating Burgas and Varna airports. This was a caretaker government's decision after a motivated proposal by the mixed BG-DE group. They will also invest 10 million euros more in the two seaside airports.

Place

the village near Sofia, better known as the home of ex-PM Boyko Borissov - is regaining its status as a balneotherapy center with this week's reopening of its communal mineral baths. Now, it can once again live up to its own name (which is a derivative of "bath" in Bulgarian).

WORD OF THE WEEK

the popular Bulgarian restaurant chain is already reaping the benefits of being announced the best restaurant in London by the British restaurant awards. While you might not head off to London to try it out, there are many to visit here in Bulgaria: they are putting up billboards everywhere to invite you in.

It has always been somewhat frowned upon by the upper middle class and food snobs in Sofia, yet Happy remains a congenial and well-frequented venue.