The week: The worst-case post-election scenario, a sock company leaves, Bulgarian football rulers refuse to

The week: The worst-case post-election scenario, a sock company leaves, Bulgarian football rulers refuse to

K Insights newsletter 30/04

© Велко Ангелов

I've been avoiding predictions about the upcoming elections. Since they have taken the regularity of a moon calendar and seems to happen every month or so, to predict any massive change after the upcoming vote would be rather foolish.

But since this is obviously the huge topic this week, and I also have watched some of the pre-election debates (so that you don't have to), here are my 5 cents on the topic.

K Insights already described the "highlights" of the campaign as well as the scenarios for a post-election breaking of the political deadlock earlier this week.

But today I will try to sketch the worst possible scenario.

Let's start with the question everyone seems to be quietly thinking about: whether the likely winners, the coalition of Democratic Bulgaria & We Continue the Change, will be ready for a coalition government with GERB, which would be the easiest mathematically but ideologically the hardest choice. I don't think they are. They might be after the next cycle, but not right now with Borisov banging on the table the way he is. If there are no other parties except BSP in the parliament from their potential coalition partners, there seems to be no option for such a mandate.

So the second question: whether there will be a government at all, is the most interesting part in my view. I believe GERB wants to rule the country before the next local elections. This is not only a political necessity for a party which hasn't been in power for 2 years and whose local and regional coffers have been running dry. This is very important for Borissov if he wants to keep his hold over the country.

Since his power is rooted in the cabal of regional feudals running the municipalities in the past decade and he needs them to keep ensuring the vote for GERB, there is one ministry which is of utmost importance in this scenario: the Ministry of Interior. This is the house that Borissov built. This is where his march on power began, back in the 00s; this is where the secrets of vote-buying and so on are kept. Whoever controls the Ministry of Interior, controls the ability to crush or uphold the local status quo.

So Borissov will, in my view, do whatever is necessary to control it before the local vote at the end of the year (it is not a coincidence he donned the leather coat from his time as a police chief).

And he is in a much better position than his competitors to do so. If the current predictions hold, he will have an eager silent supporter in MRF, a sell-out in BSP, a probable smaller left-wing party and the only thing he'd need to cross the finish line would be Vazrazhdane.

Now, he's been going around saying he wants nothing to do with them. Yet I've been in this game long enough not to trust a single word Borissov says, and to remember his last coalition government, with the "Patriots" lot, which were basically Vazrazhdane 1.0 (pre-pandemic and pre-war). And I've also read the signs in the debates. There is an obvious anti-DB & WCC front with Vazrazhdane leading the charge.

My feeling is the fringe party knows it's nearing its peak. They will look for a cash-in and there are plenty of ways to do that.

Things are not clear-cut, of course, and reality can mess with such a scenario. And the public disgust with GERB hasn't entirely faded away. Yet if you strip away all the talk, the pretense, and the EuroAtlantic slogans, you are left with the simple calculation - power is the currency Borissov craves and there is a way to get it.

So there you have it. I very much hope I'm wrong.

This newsletter is helped by

Martin Dimitrov & Evgeni Ahmadzai & Monika Varbanova

Politics this week:

Let's look at the forecast
The last two opinion polls in the middle of the week were from Alpha Research and MarketLinks.

They predict a race between GERB and WCC-DB for first place and between MRF and Vazrazhdane for third place until the end, plus a slight chance of Stefan Yanev's party entering as the sixth party.

Cabinet continues janus-faced ammunition policy

Last week, K Insights wrote about President Rumen Radev's duplicitous attitude towards military aid to Ukraine. While he professed to journalists in Brussels that Bulgarian-made ammunition wouldn't reach the besieged nation while his caretaker cabinet is in charge, he signed the joint EU declaration pledging support to Kyiv and welcomed a EU delegation that probed for factories that can produce 155 mm shells - precisely the type Ukraine needs.

Well, a Council of Ministers decision from Friday shows that Mr Radev's belligerent distancing from the common EU policy is indeed a facade: the Donev cabinet allowed army munition stockpiles worth 350 million leva to be sold for "utilization" to state-owned arms factory VMZ-Sopot - precisely one of the plants visited by the EU Industrial Commissioner two weeks ago that promised to scale up its production of shells to Ukraine.

If estimates are right, we are talking about 300,000 shells - enough to last the current daily usage of the Ukrainian Defense Forces for 3 months.

NATO - still not a love story

Wednesday marked 19 years since Sofia joined the military bloc, which paved the way for EU accession just three years later. But Bulgarians - who've always had an ambivalent attitude towards NATO, haven't all been assured by the events of the past year. According to a recent survey commissioned by the Alliance, a sizable minority of 31% favors leaving it. This is not very surprising given the mobilization of propaganda. On the plus side, there's still a significant majority of 55% wanting to stay.

School's out

For the past four days, dozens of schools have been terrorized with bomb hoaxes. This time, however, it's probably not the work of bored students, but rather a more sinister operation. The suspicion is that a Russian hybrid campaign is in the works, trying to disrupt the upcoming elections.


5G has gotten cheaper

The outgoing caretaker cabinet has cut by 40% the one-off frequency fees that telecoms should pay in an attempt to get them to invest more money in their 5G networks. The government had accepted the proposal of Communications Regulation Commission (CRC) chairman Ivan Dimitrov to lower the price of one megahertz in the 700 and 800 MHz spectrum to 72,000 levs from a previous 120,000.

Those frequencies have not been used for civilian purposes prior to this and the government is counting on 130 million levs in revenue this year. Yet it's a peculiar decision given the rather good financial state of the telecoms and that they already pay one of the lowest fees in the EU for frequency usage.


3.7 billion levs The total amount that the state will pay for road maintenance this year, as the Road Infrastructure Agency raised forecasted expenditures with 60% year-on-year.


Deta Textile

The largest sock producer in the country is moving out. Delta will close its Ruse operations and will move to Turkey, which means shedding around 500 jobs in the Danube city. The reason is the wage growth in Bulgaria - unofficially the local edition "Dunav most" has calculated that the average salary in the company was between 900-1000 levs (500 euro) which obviously makes it unfit for an EU-based manufacturing.

Chemistry & paper


The owner of the Milde and Emeka brands invested 5 million eur in a high-tech production line for paper products, doubling its production capacity.


Kaufland and Lidl

Starting this week, two of the largest retail companies, part of the German Schwarz group, introduced vending machines for used plastic bottles and cans in 15 of their stores across the country. Customers will receive an ecovoucher worth 5 pence for each returned container.


Multivac The Bulgarian subsidiary of the German manufacturer of parts for packaging machines, expanded its base in Bozhurishte with an investment of BGN 12 million.


EU approves 2035 phaseout of polluting cars and vans

The agreement will ban the sale of carbon-emitting cars after 2035. The EU Commission will present a proposal for new types of e-fuels after pressure from German negotiators via a delegated act, which can still be rejected by the EU Parliament. Bulgaria abstained during the vote, citing the income levels in the country as the main factor in the decision. There are no car assembly factories in Bulgaria, but the automotive sector is relatively well developed with the production of components, cables and automotive software. Meanwhile, the country's capacity to accommodate electric cars is very limited.

What about next winter?

EU energy ministers backed a plan to extend reductions in gas demand by a year in order to ensure available supplies for next winter. Ministers agreed to prolong a voluntary 15% cut by a year, until the end of March 2024. That target could become binding if there are extreme supply shortages.


Don't say "gaz"

The absurdly populist presidential government has been trying to play the popular tune on every melody: North Macedonia, Ukraine arms, inflation. Yet reality comes back to bite them: in this case, through the 30% higher gas price for Bulgarian companies compared to the European levels. That is because the country bought expensive gas to fill the Chiren storage and now has to sell it. It is not hard to understand why: everyone was buying, the price was higher, and if the storages weren't full, the price would be skyrocketing even now. Yet when you are locked in a populist cycle and you want to be praised for everything, it's hard to square that reality with the complaints from the market. Rumour has it that hey even wanted the EU to pay for that (through the infamous Recovery and Resilience negotiations), yet failed miserably. Poor old Radev.

Alpiq: Gone with the wind

Austria-based company Renalfa is set to acquire the second largest wind farm in Bulgaria which is currently owned by Alpiq. The farm is near Kazanlak, central Bulgaria, and has a capacity of 72.5 MW. Alpiq's subsidiaries in Bulgaria -"Alpiq Wind Services" and the electricity trader "Alpiq Energy Bulgaria" - will be acquired by Bulgarian entities from the Renalfa group.

Since such transactions are rare for the Bulgarian market, it is difficult to guess the purchase price. Comparison could be drawn from a similar deal in 2021 when Swiss MET bought the 60-megawatt wind farm near Suvorovo from the Spanish group Enhol, and according to unofficial information the deal was for 50-60 million euros.



Manol Peykov

The energetic publisher and politician from Plovdiv, who single-handedly organized fundraising campaigns for generators for Ukraine and aid to the earthquake victims in Turkey, launched a fundraising campaign to buy the house of Dimitar Talev, the famous Bulgarian writer with Macedonian roots, in his native Prilep, N. Macedonia.

Slavina Ivanova

This good looking bar-owner from the seaside has obviously been a valuable asset for Energy Minister Rossen Hristov - she is an expert in his cabinet and now a member of the board of the state-owned Waterdam management and maintenance company. It's worth reminding you that Hristov himself was a skipper for sailing boats prior to last year.



Is in the top-10 cities in Europe for number of Revolut users, said the deputy-CEO of the fintech giant, who participated in the Capital conference on fintech.


A state-owned food store

This is the solution to the growing prices of food items, according to Agriculture Minister Yavor Getchev. The politician already found a place for such a store - in the cantina of his own ministry and it will sell dairy products of the state-owned company LBbulgaricum. One really wonders how far all this can go.

Word of the week:

Наглост - Insolence

That's the only word which can describe the attitude of those who govern Bulgarian football, after yet another devastating start to a qualification campaign. Bulgaria lost both to Montenegro and Hungary, while also demonstrating a total failure to create anything resembling modern football on the field. While all of this, is of course, a consequence of 15 years of systemic devastation, under the rule of Borislav Mihaylov's "team", Mihaylov himself, as well as other members of his entourage, blamed the players and the coach for not playing well enough. It's like blaming the motorway for cracking, when you haven't put enough asphalt in it

I've been avoiding predictions about the upcoming elections. Since they have taken the regularity of a moon calendar and seems to happen every month or so, to predict any massive change after the upcoming vote would be rather foolish.

But since this is obviously the huge topic this week, and I also have watched some of the pre-election debates (so that you don't have to), here are my 5 cents on the topic.

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