The week: Weapons promises, foreign agents and budget in the red

Hence, the parliamentary ruling would simply shed light on the process. It is unlikely that Sofia would send any of its C-300 or 9K33 "Osa" anti-aircraft systems, which could be counted on the fingers of one hand - or at least that's what Defense Minister Dimitar Stoyanov said in the Parliamentary Defense Commission on Wednesday. While the MPs obliged the government to start negotiations with allied countries to replace the Bulgarian army's arsenal with NATO analogues, this would likely take time and the outcome is uncertain.

Parliament's decision could just be pretty futile anyway as those deputies might not be around at all to check whether the government has followed through on its promise. The prospects of forming any coalition remain very slim and it is foolhardy to believe that, while the executive remains dominated by President Rumen Radev's men, there would be much impetus to expedite sending weapons.

But at least one general had a change of heart - Bulgarian Rise's former Defense Minister Stefan Yanev voted in favor! That's right, the same Mr Yanev who was ousted from office at the beginning of the war precisely because he had commented that giving weapons to Ukraine would backfire and "prolong the agony".

The downside of all this is that the symbolic vote might not give Ukraine weapons, but definitely handed ammo to the Russophile parties. BSP and Vazrazhdane had a field day promoting their thesis that, by passing this decision, Bulgaria had practically entered into hostilities. This could play badly for the pro-Western parties come the next election.

1. Politics this week:

On Friday, the same majority of pro-Western parties (GERB, WCC, MRF, Democratic Bulgaria and maybe Bulgarian Rise) are supposed to approve another Defense-related bill - this time, on the purchase of a second half-squadron of 8 F-16 Block 70 fighters. These are to be delivered after the finalization of the first order of fighters in 2027 and should be paid in three installments, with the first one of about 700 million USD to be paid in 2027.

Cabinet talks drag on with little chance of success

President Rumen Radev met WCC and MRF an entire week after meeting GERB, apparently in an attempt to give them more time to find a working variant for a government. At this pace, Parliament is probably going to get more time to pass laws, before dissolving.

GERB leader Boyko Borissov said last Sunday that he was ready to talk with all political forces in an attempt to form a government. Over the weekend, Mr Borissov received two invitations for public discussion for coalition - from WCC and the co-chairman of Democratic Bulgaria Atanas Atanasov.

GERB's leader did not respond to either and reiterated that, in his opinion, the agreement on a government should be made before the first mandate is handed. He added that if there were no such agreement, there would be no government within this parliament.

A Foreign agent calls for the registration of other Foreign agents

The pro-Russian party Vazrazhdane party submitted to the National Assembly a "Law on Registration of Foreign Agents". The law has no chance of passing, given the grouping's virtual pariah status, but it's important to see the direction in which the party is headed.

The proposal wants to restrict the rights of certain categories of citizens to exercise professions such as teachers or researchers in public institutions, as well as to subject them to discrimination through public shaming, if they ever received more than 1,000 levs from any foreign company or state.

Both foreign agents and their related individuals would be banned "from carrying out creative activities at the expense of the state or local budget, from participating in public procurement, from participating in state and local government projects and from carrying out environmental assessments. They are prohibited from engaging in political activities, lobbying or electioneering in any form, or activities to influence any section of the public in Bulgaria".

BSP's Yavor Bozhankov hit the nail on the head when he said that it's hilarious such a law hails from a party leader famous for his nickname, which is foreign currency (he meant Vazrazhdane's Kostadin Kostadinov, known as Kostya Kopeikin after the Russian coin).

2. Economy:

Galab Donev's caretaker cabinet was rebuked by Brussels this week after it emerged it was planning to reverse a previous decision by Kiril Petkov's government to ban the re-export of Russian oil and fuels after December 5.

On Monday, a statement by European Commission spokesman Daniel Ferri made it clear that Brussels did not approve this plan, which would have effectively allowed Lukoil to export fuels from Bulgaria to third countries during the years of derogation, practically subverting the idea of the oil embargo, imposed by the EU on Russia in June.

Budget in deficit

The state's finances are in deficit to the tune of 20 million levs in the first ten months of 2022, as expected. According to preliminary data from the Finance Ministry, the deficit in the budget is one billion levs in October. It is mainly due to increased pension costs and the larger amount of VAT refunds to businesses. The 2022 Budget is planned with a cash deficit of 6.2 billion levs, or around 4%.

Hurrying for the euro

Parliament mandated the government and the Bulgarian National bank to speed up preparations for the euro. In the decision submitted by the ex-ruling GERB, it is explicitly stated that Bulgaria accepts the European currency while maintaining the official exchange rate of the leva to the euro - 1.95583. The document instructs the Council of Ministers to expedite consultations and negotiations with the European institutions, the member states whose currency is the euro, and the countries participating in the exchange rate mechanism, to adopt the euro in Bulgaria with a target date of January 1, 2024.

Figures:

Is the exports growth in the first half of the year, if we look at quantities, not prices. Bulgaria exported nearly 700% more natural gas and over 400% more electricity in the first six months of the year compared to the same period last year, according to analysis from the Bulgarian Chamber of Commerce (BCC). The total value of exports for the half year is close to 25.8 billion dollars and is up 30.6% compared to 2021.

4.4%

of graduates in Bulgaria are unemployed, and among the low-educated, almost every second person is unemployed, according to NSI data from the 2021 census.

3. Business

The Bulgarian subsidiary of the Swiss Howag, specializing in versatile cable solutions, is expanding the cable plant in Targovishte with an investment of 1.5 million levs. This will create 15 new jobs. The implementation of the project is expected to begin next year, and its completion is planned for 2025, said Howag's manager for Bulgaria Radka Boneva for Capital Weekly.

Communications

The Bulgarian communication ecosystem has grown by yet another agency. Advertising specialists Ivan Totev and Dimitar Stefanov have founded the content studio &play. They want to modernize the work models in the industry and enter the international market. The company is part of the Ogilvy Group, whose portfolio now includes a total of eight agencies that cover the entire communication spectrum.

Transport

Renault Group is selling its Bulgarian subsidiary for import and distribution of the Renault and Dacia brands to the Swiss Emil Frey Group. The deal should be completed by December, when the new owner will take over the business after approval from the Commission for the Protection of Competition. The entry of the Emil Frey Group, at least at first, is not expected to inflict any particular changes for end customers. The group's headquarters in Zurich are yet to comment on their plans for Bulgaria.

4. Energy:

Companies operating in the crude oil, natural gas, coal and refining sectors are to pay an additional tax of 33% on top of their weighted average profits for the last four years, the government proposes. On Bulgarian soil, the new taxation will affect the Lukoil Neftohim Burgas refinery, which turned a profit in 2021 for the first time in years. However, it operates on a tolling basis and the new large profits are for companies of the Russian chain registered outside Bulgaria - or namely, the Swiss-registered Litasco company that controls the majority share of Lukoil Bulgaria.. Because of the outsourced profits, the effect on Bulgaria would be small.

Offshore energy bill on the way

Bulgaria will likely introduce a law for offshore energy after a bill about "renewable sources within the sea" was voted on in the parliamentary commission. Next week, the texts will be discussed in parliament as well, with general support expected. Bulgaria was the only country in the EU without a specific law allowing offshore wind installations.

Kozloduy NPP stops working hours after repair

The 6th unit of the Kozloduy NPP, which has not been functioning since October 29, just hours after its scheduled repair was completed, will not re-commence operations this week. This was stated by the Acting Minister of Energy Rossen Hristov. Although there is no health risk to the general public, all this leads to huge money losses for the plant. At an average price of electricity of BGN 350/mWh for the last week, the plant is losing roughly BGN 8.4 million per day.

5. Watch out for:

The young BSP MP interrupted Ivan Geshev's comfortable tour of parliament, in which the Prosecutor General was delivering his somewhat dubious view of justice reform, to give him a thorough dressing down. "For you there are good and bad oligarchs. [Vassil] Bozhkov was an oligarch, but his talks with Borissov were not important. [BSP] favors curtailing the powers of the prosecutor general and for active anti-corruption investigations. Judicial reform should lead to your resignation," he told Mr Geshev on Wednesday.

Place:

The caretaker government chose a site on the edge of the city, in the Gorna Banya district, for the long-awaited National Children's Hospital. According to Health Minister Dr. Assen Medjidiev, however, this is a "well-connected" location.

Date:

17 November