This week your newsletter is coming not from Plovdiv of Sofia, but from Brussels. Normally, we include several topics from the epicenter of Europe, just to keep you informed on what's happening.
But this week I've spent a whole day in DG Trade, which is the division in the European Commission responsible for trade agreements, rule setting for export and imports and, last but not least - Russian sanctions.
And after speaking with various experts there, I've decided you might use some hindsight into what is cooking.
First of all, the EU doesn't want to be dependent on one country anymore (after Russia that is). What it currently does, apart from trying to find various energy sources, is negotiate "Raw material partnerships". These are very curious new instruments, which grant EU companies access to some precious resources, like lithium in Chile. Do follow this - it might prove vital in the next few years.
Speaking of which, fear not for globalization. "The risk of fragmentation is there" as the commissioner Valdis Dombrovskis admitted, yet if two years of Covid and one year of war hasn't torn it apart, it's proving far more resilient than it's given credit for. Here is a list of countries and regions with whom the EU is currently negotiating, or has finished doing so: New Zealand, Thailand, Chile, UK, and Mercosur. As one of the heads of division said, "it's not about what you like or don't like, it's about what is good for you". Translated: even though China and the US might not like the WTO, they are still getting a lot more from that order, than outside of it.
That said, it's not business as usual. The spat between the US and Europe on subsidies is known, but there are at least negotiations going on. The trade agreement between China and the EU, which had to grant investment protection and investment dispute settlement, is all but dead. "Ratification is currently not advancing" as Dombrovskis politely puts it.
What's even more, the EU has a new "investment screening" procedure, which is another way to say Brussels wants to check anyone who invests in European companies. It's not an ideal solution for a market economy, but Brussels seems fed up with Chinese and Russian money.
2022 was the first year for that, and it already has screened more than 400 cases.
Fun fact: guess which is the only country which doesn't have such a mechanism, or hasn't promised to put one soon? Right. Maybe it's because Bulgaria hasn't really had a government for the past year, or because it really doesn't want to know where the money is coming from.
And lastly, Bulgaria. The country wants to open up its recovery and resilience plan (RRF) for renegotiation. Not a good idea, judging from what I heard from Dombrovskis. 2023 should be a peak year for funds from the plan, and Bulgaria is not even close to getting a second payment. But hey, judging from the last several years of missing EU funding, we're actually not doing bad without it. So I, for one, won't be crying too hard about it.
This newsletter is helped by
Martin Dimitrov & Mary Ivanova
1. Politics this week:The cycle of elections starts again! On 2 April
The inevitable finally happened - a new early election date has been set by President Rumen Radev, 2 months after the previous elections. BSP - the party that received the third and final exploratory mandate to form a government - failed to do so and returned the Mandate on 23 January unfulfilled to Mr Radev.
He, in turn, spoke to the Central Electoral Commission (CIK), which pleaded for a later date - say, 23 April - because of problems linked to the delivery of specialized paper for the voting machines (yes, now we will have both voting machines AND paper ballots in all polling stations)
But the President, who is already under heavy fire for ruling unchecked via caretaker cabinets, did not agree to prolong the agony of the parliament any longer and set the date for 2 April, which CIK reluctantly agreed to.
Judging by the current moods, this election would likely be as inconclusive as the previous one and we will go to yet another round in the autumn, which will coincide with the faithful local vote and, potentially, some referendums to spice things up. Find out more about all that in our analysis from Tuesday, available here.
An Austrian Chancellor in Sofia: relations warm up, but no Schengen
A little more than a month after Austria vetoed Bulgaria and Romania's Schengen membership, Chancellor Karl Nehammer and Interior Minister Gerhard Karner arrived in Bulgaria at the end of last week, at the invitation of President Radev. They met caretaker Prime Minister Galab Donev and inspected the Bulgarian-Turkish border.
Mr Nehammer politely refused to set a date for Bulgaria's (and Romania's) entry into the Schengen zone.
Instead, he confirmed that Austria's veto on the two countries' entry into Schengen had very little to do with their border control performance and much more with Vienna's own ambition to reform European migration policies - an issue that it will raise formally during the EU leadership meeting in early February. Vienna is lobbying for an EU pilot project to fast-track asylum procedures at the EU's external borders, more EU funds for countries at the union's external border.
2 billion euro, but don't call it a bribe
This is the sum Mr Nehammer mentioned in order to strengthen the capabilities of the Bulgarian border guards, and the possibility of requesting asylum in safe third countries for those arriving. But the EC later said there was "no money for such things".
Alas, North Macedonia again
It has been surprisingly quiet on the Sofia-Skopje front for some time. Well, this ended last week after three men assaulted a Macedonian citizen of Bulgarian heritage, Hristiyan Pendikov, who was the secretary of the Bulgarian cultural organization "Boris III" in Ohrid. Mr Pendikov suffered serious injuries and was immediately flown to Sofia, where he is currently recovering (a feat not available to most Bulgarian citizens).
A tsar better left unsaid
The incident sparked a series of tit for tat actions. First, N. Macedonian Foreign Minister Bujar Osmani visited Pendikov at his hospital bed alongside his Bulgarian counterpart, but then told TV that Bulgaria still has to change the names of some of its clubs in his country. Bulgarian cultural clubs and organizations have proliferated around N. Macedonia, some of them named after people the Macedonians deem highly dubious. An example is the last Bulgarian tsar - Boris III. The Bulgarian army was last in N. Macedonia during WWII as a Nazi ally, under the command of Boris, but also, standing by as the Nazis loaded Macedonian Jews on to trains.
Bulgaria quickly summoned its ambassador to N. Macedonia, Angel Angelov, for consultations at the MFA on the same day, citing "the serious situation regarding the rights of Bulgarians in North Macedonia and the escalation of hate crimes against them in recent months".
More from this week:1000 km cable through the Black sea will interconnect Romania and Georgia. But where is Bulgaria?
2.Economy:Lobbying is not dead: an insurance issue might derail the euro-accession
GERB and Bulgarian Rise introduced a new amendment to the Green Card scheme, which might render the insurance mechanism useless. Bulgaria was obliged by the European Commission to introduce a mechanism for "pay first, appeal after" - meaning the Bulgarian insurance companies could not delay payments for accidents in other EU countries. Obviously under some heavy lobbying, the parties decided otherwise (though it still has to go to a vote). Since this is one of the benchmarks on the way to the eurozone, this will prove a problem.
The EU court of auditors will audit Bulgaria
for payments in the new 2021-2027 period and the RRF. The country has been cited as a weak spot in the fight against fraud, yet someone had to indicate to the EU that we haven't spent a single euro from those two sources yet.
Is the fall in the overall annual growth of bank credits - while in November it was 13%, in December it was 12.2%. The reason is that this was the first month in which bank credits shrank in all segments, mostly company loans.
3. Business:Venture capital Eleven Ventures
Bulgarian venture capital firm started the year as lead investor in a late seed round of Greek technology company BibeCoffee. It enters with 1.2 million euros against an unclear share in the startup, which raises a total of 2 million euros. Athens-based BibeCoffee develops IoT devices for measuring and diagnosing professional coffee machines, whose real-world data customers can monitor via BibeCoffee's platform, where information about all their machines is stored on the cloud. The devices allow remote management, control and configuration of coffee machines and predict malfunctions.
Since its inception five years ago, AMPECO has attracted hundreds of customers in dozens of countries for its charging station management software platform.
The merger between two dairy companies with Greek owners: Plovdiv-based United Milk Company (UMC) and Plovdiv-based Tirbul has created a local giant dairy with an annual turnover of nearly BGN 200 million.
4. Energy:6 billion from electricity sales abroad
In 2022, Bulgaria earned around 6.1 billion levs from electricity exports to neighboring countries. This is equivalent to nearly 4% of the projected GDP for the year. Export earnings are almost three times higher than the previous year, when they were 2.1 billion levs and accounted for 1.55% of GDP. High prices, less energy production in Europe and the fact that Bulgaria generates more electricity than it consumes have helped the country rank among the continent's leading net exporters. Electricity sold abroad totalled more than 12 million MWh.
5. Watch out for:People: Ivan Geshev
The Prosecutor General took pride in being invited by the US to attend the annual National Prayer Breakfast in DC, only to get rebuked by the US Embassy in Sofia a few hours later. He did receive an invitation, but it did not come from the US state, it turns out.
The leader of the TISP party, who steadfastly and openly refused to officially declare his assets (as required by law) over the past two years since his party entered parliament, said that after a period of "contemplation" he had changed his mind and will now submit the required declaration to the anti-corruption authorities.
President Rumen Radev confirmed that Mr Donev will remain as PM in the next caretaker cabinet despite speculation that he might be substituted by the up and coming EU funds minister Atanas Pekanov.
The last working day of Parliament and MPs' last chance to pass the outstanding bill that would allow oversight of the Prosecutor General, which is needed so that Sofia receives the next tranche of funds from the EU Resilience plan.
ErevanArmenia's capital has become the latest destination for low-cost air carrier WizzAir from Sofia. There will be two flights a week, launching on 29 April.
Words of the week: Affording John Malkovich
A cultural storm erupted this week in Bulgarian intellectual circles - the question of who can afford to see esteemed actor John Malkovich's performance in the play In the Solitude of the Cotton Fields, which will take place in mid-February at Sofia's National Theatre. The controversy began when the publicly funded institution released tickets for the shows at prices ranging from 50 to 400 levs (or 25 to 200 euro), which was deemed outrageous by many.
The wrangle became even more heated when it turned out that in neighboring capital Athens tickets cost between 5 and 50 euros - roughly a quarter of the price. In the end, the market solved the drama: all tickets were sold off despite the exorbitant prices. This illuminates two truths - there is a market for culture in Bulgaria, even if it is more pretentious and snobbish (as it often is). And prices here are higher than in many other places in the EU - not only for theater. Now that's more of a problem.