The week: A very sudden twist

You have to sit back and take a deep breath to realize just how far we've moved since January 2022. Bulgaria has switched from being a puppet of Gazprom, which basically used the army and broke all laws to build TurkStream as fast as possible, to being a nemesis which plans openly to disrupt the last remaining holdouts of Moscow's influence on the continent. Just listen to Prime Minister Nickolay Denkov's comments: "Russia uses energy as a way to influence different countries. In the past year Gazprom won derogations in order to manipulate certain states, creating unfair competition concerning the gas prices".

Probably not quite what the Kremlin expected when they abruptly switched off deliveries for Bulgaria last year.

Multiple theories abound as to why that happened. First, that it's a push for Austria to allow us into Schengen. It's true that the country still uses a lot of Russian gas, and this probably will raise prices all over the markets. But that would be quite a reckless move for any government. There are 2 other countries in-between who will pay a heavy social price for that - Hungary and Serbia, and Sofia will not be making any friends with this policy. There might, of course, be some truth to the fact that Bulgaria was pushed into this by foreign influence to exert pressure on both Alexander Vucic and Victor Orban.

Another theory is that this is a way for Sofia to balance the payments it needs to make to the Turkish Botas on the newly signed contract. The budget already hangs in the balance, so a hefty 3 billion in tax will come in handy.

And last, but not least, the theory that this is added pressure against the Lukoil refinery in Burgas. Bulgaria is not using any of the gas transiting its territory, but Lukoil is. Since there is a push for the Russian company to exit this investment, this might be an added benefit flowing from this measure.

But no single explanation is good enough, so there must be a mix of reasons, focusing mainly on one man - Assen Vassilev, the mastermind behind this. It's quite unusual for Bulgarian politicians to assume unpopular opinions, so this one is a standout. Most concerning to everyone is Russia's silence on the matter. The Kremlin doesn't usually take hits like this lightly. So I have the feeling we're witnessing only the first act in a long drama.

This newsletter is helped by

Martin Dimitrov and Monika Varbanova

1. Politics this week:

Speaking of Russia: it's now an official enemy

Successive Bulgarian governments of every persuasion have consistently buried their heads in the sand regarding the Russian threat to the country and its region. One of the most blatant examples of that is how, in 2016, when the country was revising its defense strategy - the founding document that defined the basic parameters of Bulgarian defense - it only mentioned Russia twice, failing to even underline the fundamental shift in the security situation in the Black Sea region after the 2014 annexation of Crimea.

Well, this meekness seems to have evaporated. A draft National Defense Strategy with a 2033 horizon has been tabled by the Defence Ministry and Russia is named for the very first time as the main threat to Bulgaria, the Black Sea region, the EU and NATO and it is said that this will continue to be so after the end of the war with Ukraine.

This means more money for the military

The authors of the strategy pledge that Bulgarian defense spending will reach 2% of GDP in the next state budget for 2024, which is the only specific deadline in the entire document. The draft also states that Bulgaria will rely on the permanent deployment of multinational formations and/or rotational presence for joint training to boost its defense.

Barcelonagate: Borissov's whitewashing is concluded

Lost amongst the headlines is a topic which would have drawn throngs of people onto the street two years ago. Just two months after the Prosecution cleared GERB leader and three-time PM Boyko Borissov of any suspicion with regards to the pictures of him sleeping naked next to a bedside drawer full of gold bars, 500 euro bundles and a pistol, this week the case ended.

The Barcelonagate scandal is now officially closed. For those of you who don't remember - this is an investigation into a potential money laundering scheme to buy a luxurious property in a high-end Barcelona district for a model - and alleged mother of Mr Borissov's child - Borislava Yovcheva, that might have involved the ex-PM.

The investigation started in 2020 when Spanish newspaper El Periodico published a report that cited sources in the Catalan police about the ongoing probe - and Mr Borissov's likely involvement in it.Sarafov - the man for the job

In case you ever wondered what happened in the Prosecution service after Ivan Geshev's departure and whether they switched allegiances, this tells you all you need to know. The new acting head Borislav Sarafov did exactly what he was supposed to do: absolved Borissov of any suspicion of corruption. There is no evidence of "independent actions" of Mr Borissov in connection with the purchase of the property, or of movements of money from his accounts or his instructions to other persons for mediation or conclusion of the transaction in order to conceal actual rights, etc, according to Sarafov. Look out for our article on the topic next week.

Last hurdle remaining: the European prosecution

There is just one thorn left in Borissov's heel: the European prosecution service which is not controlled by his cronies and is free to investigate the last years of his reign. Just some weeks ago it stopped a huge rail project for suspected money laundering and the scheme is uncomfortably similar to the one on Hemus highway - money taken out of banks through shell companies. Only this time the Bulgarian prosecution can't really kill it. So they did what they always do: produced a kompromat. Namely, that the local representative of Kovesi, Theodora Georgieva, has been taking bribes from a famous corrupt power-broker. Expect more on that story also.

2. Economy:

Launch of new e-prescriptions turns chaotic

Have you tried picking up a prescription antibiotic this week? If so, you might have experienced the chaos endured by many Bulgarians after the bungled launch of an e-prescription system designed to make life easier for patients, doctors and pharmacists alike. The new system was supposed to limit the arbitrary purchasing of antibiotics (Bulgarians consume 50% more antibiotics than the EU's average and three times more than, say, Austria) and other problematic drugs like fat-loss pills and antidiabetics.

It turned out that some doctors don't have the standardized software to issue the new e-prescriptions, there was a disagreement between pharmacists and doctors on whether a missing drug can be substituted and so on. More transparency certainly won't hurt this system.

Figures:

3.9%

The real increase of the Bulgarian economy in 2022, compared to a year earlier, according to the final data from the statistics institute. Preliminary data indicated growth of only 3.4%

6.3%

Is the inflation rate in September and it continues to slowly recede and is already at 2021 levels, National Statistics Institute (NSI) data shows. When it comes to prices of food, fuel and most other goods and services, however, the statistics measure a rise compared to a month earlier.

3. Business:

Software

Milestone Systems

The software company with Danish roots and a Bulgarian office will invest 1 million levs in the expansion of its office space in Garitage Park at the Ring Road in Sofia. It is taking a new floor, increasing capacity for its team by another 70 seats.

E-mobility

Eldrive

The leader in the charging stations for electric vehicles business in Bulgaria, has launched a partnership with the owner of the Praktiker and Technopolis hypermarket chains and the Holiday Park retail parks to construct up to 50 publicly accessible electric vehicle charging points at the holding's sites in the coming years.

Retail

Billa

The supermarket chain presented its first small-scale corner shop from the brand Billa Today in Dobrich this week. This will be the first of 50 similar stores planned to open by 2030. It will cover up to 600 square meters large and sell a limited number of products (up to 4,500).

Packaging

Ate Plast

The family packaging manufacturer from Stara Zagora announced that it is planning a 20 million levs investment into the expansion of its production facility, which should become operational by 2025.

4. Brussels:

New Schengen vote on the horizon

The signals from the Interior ministers' meeting on Thursday was that "the Schengen accession of Bulgaria and Romania can be put to the vote on December 5-6", Capital's diplomatic sources reveal. Meanwhile, earlier this week, the Commission reported on progress made by the two countries on the Pilot Projects for Fast Asylum and Return Procedures, showing again full support for the Schengen enlargement.

Digital problems

he EU is opening a probe into Elon Musk's X, with regulators demanding answers over concerns about "illegal" and even "terrorist" content on the social media platform related to the Israel-Hamas conflict. Meanwhile, Musk has announced his intention to restrict access to the platform in Europe, due to the new taxes and administrative burdens imposed by the Digital Market Act.

5. Watch out for:

People: Daniela Televa

The judge who will, under the new mechanism to investigate the Prosecutor General, take up the case against the acting PG, Borislav Sarafov, and his involvement in the "Eight Dwarves" case of influence peddling in the judiciary. This would be the first test of the new mechanism that has been introduced after 20 years of efforts by the EU, ECHR, local lawyers and activists.

Kenneth Merten

The US Ambassador to Sofia told bTV that MRF politician Delyan Peevski, who has been sanctioned for high-level corruption under the Magnitsky act, cannot expect to "buy off" his indulgence via pro-US political acts. "I think that there is a mechanism by which one should be able to prove that the information gathered against him is somehow false or irrelevant," Merten said.

Place:

From left to right: Rob Dixon (UK Ambassador), Maya Tsaneva and Stiliana Todorova from the Safe Playgrounds Association, Ognyan Georgiev, editor at Capital and member of the jury of City Lovers

Photographer: Georgi Kozhouharov

Outdoor schools

Is the project which won the annual City Lovers contest. They want to revive abandoned urban spaces and make them usable for teachers and classes to hold sessions outside. It's always good to be close to nature. We had a ton of good ideas this season and all of them are worth recognition. If you want to be on board as a sponsor for next year's edition - now is the time to approach us.

Institution:

Russian consulate in Varna

The last active Russian consulate outside of Sofia has closed, the Russian embassy said. Its head was one of the 70 diplomats who was ousted by the Kiril Petkov government in July 2022, and now it has finally stopped operating entirely.

Date:

2026

Is the year the construction of Unit 7 at Kozloduy NPP could start. Westinghouse Electric signed memorandums with five Bulgarian companies it is planning to include in its supply chain for the project, leaving the door open for their participation in other nuclear projects in the region. Those are Oscar-El, Glavbolgarstroy, ENPRO Consult, EnergoService and IQI Bulgaria. The reactor is going to use US AP1000 technology. Bulgaria has to provide the necessary funds for the design and licensing, which are currently estimated at around 200 million euros, and decide exactly how it will participate in the construction of the new nuclear power plant.