The week: Emperor Mihaylov lets Sofia burn

Events on the streets of Sofia this week resembled the 1989 of Football. Thousands of people gathered outside the National Stadium, confronted by an immense police force, while inside the silent venue, well-dressed officials were patting themselves on the shoulder. It was like watching a dictatorship in its dying days.

The protest turned violent, which is of course, no surprise, given that die-hard fans from all over Bulgaria were gathered in a small area and the police were ready to charge. But that probably was the point.

They wanted to drag themselves out of the sports news. They wanted people, not only in Bulgaria, but all over Europe (and the world) to bear witness to the smug indifference with which the Bulgarian Football leaders were treating their own population, living in the high-class world of corruption and cocktails. The same people who thought it was a good idea to hide the protest against their rule from international cameras by throwing it out of the stadium.

It's an inherent feature of sporting events that they can often be an outlet for group emotions and feelings which are larger than the sport itself. Hence the protest was the boiling point of decades of corruption, nepotism, mismanagement, mediocrity and last, but not least, negligence towards the public, who are, after all, the whole point of football (you can read about it in depth here).

Even more hurtful is that Bulgaria is a stand-out amongst its group of CEE countries in the way organized sports (and especially football) have plummeted. It is a bitter irony of history, that in the country where gangs of organized sportsmen took over the streets in the 90s, those mutras and their political puppets were unable to recreate the very thing which gave them life - a network for competitive sport.

What will happen after this night of violence is still unclear. But it will be very telling if UEFA, the same body which shamed the head of Spain's federation into resigning for giving an unwanted kiss to a female player, stays silent on Bulgaria's downfall. The emperor has no clothes.

This newsletter is helped by

Martin Dimitrov and Monika Varbanova

1. Politics this week:

The infighting within the unstable majority continued on another front after the local elections - the derogation from the EU sanctions regime against the import of Russian oil. In short, last year Sofia (among several other countries that rely exclusively on Russian oil) gained a 2-year period to move to non-Russian products for its Lukoil Neftochim refinery. Yet, since last week there has been an intense effort on several fronts to abandon the derogation immediately - something that the Denkov-Gabriel cabinet is reluctant to do over fears of fuel shortages and price spikes.

Drop it like it's hot

The first blow came from a Politico article that relied on several NGOs' claims that Lukoil Neftochim is abusing its derogation and is selling oil to third countries. While the European Commission rejected having investigated Bulgaria over this, MRF and GERB decided this is a good occasion to pressure WCC-DB and filed a proposal to drop the derogation within three days. With the votes of WCC-DB, Vazrazhdane and BSP, the proposal was rejected, which gave GERB MP Delyan Dobrev, who co-sponsored the bill alongside Magnitsky-sanctioned oligarch and MRF MP Delyan Peevski, a reason to claim that there is a new pro-Kremlin coalition "fighting for Russia's interests for life and death."

Next fight - the Budget

GERB and MRF are not hiding their unhappiness with the budget presented by the Finance Minister Assen Vassilev. They helped reject the whole set of tax changes of the Ministry in the Budget committee - which is seen as a warning shot to Vassilev.

Deadlock in the Sofia Municipal Council

As of this week, Sofia Municipality has a new mayor - the WCC-DB and Save Sofia nominee Vassil Terziev, who opens a new page for the city after 18 years of GERB rule. Shortly after he took the oath of office, however, it became clear how difficult this would be - not only because in his first week Sofia saw the bloodiest protest in years. The municipal councilors from his group do not have a majority. At its first meeting, the Sofia Municipal Council failed to elect a chairman, which is unprecedented in Sofia's recent history. All parties voted for their own nominees and GERB did not participate and did not nominate a candidate, which made the situation even more complicated. The next meeting, which will again try to elect a chairman, is scheduled for Monday, 20 November.

2. Economy:

This result will not even be reached in 2025, when the Commission foresees some acceleration to 2.6%. Thus, the European Commission's forecast for next year appears to be the most pessimistic among those of the other major institutions - most of them, including the IMF and the World Bank, bet on Bulgarian GDP growth of over 2%, and some even over 3%.

Feeling "The Germany effect"

Meanwhile, the most recent figures of the National Statistics Institute (NSI) showed that the growth of the Bulgarian economy slowed down even more in the second half of the year. In the third quarter, gross domestic product increased in real terms by 1.7% compared to the same period of 2022, according to the latest NSI flash estimate, after the economy expanded by 2% in April-June. The gross domestic product of the country in the months from July to September was worth 47.7 billion levs at current prices. Consumption has the biggest weight in it - nearly 78%, while about 18% is occupied by investments. The excess of exports of goods and services over imports amounted to nearly 2 billion levs, or about 4% of GDP.

Figures:

The inflation rate in Bulgaria for October, which continues to slow down from 6.3% a month earlier.

2000 lv

The median monthly gross salary in the country for the first time crossed the threshold in the third quarter of 2023 - a 15% increase compared to last year.

50%

Over half of Bulgarians shop online for non-food items, revealed a retail association research. When shopping offline, they prefer big stores, not local ones.

3. Business:

Telecom operators A1 and Yettel have opposed the announced intention by Vivacom's owner United Group to acquire pay-TV satellite provider Bulsatcom. According to the other two big players on the market, the possible approval of the deal by the Commission for Protection of Competition (CPC) could lead to an unprecedented concentration of market and media power.

Smart devices

The smart devices company, which is among the largest publicly traded firms in the country, announced revenues of more than 86 million levs for the first nine months of 2023, an increase of 50% compared to the previous year.

Retail

The French supermarket chain returns to Bulgaria after an almost decade-long absence and is planning the creation of 25 shops under the brands Carrefour Express and Carrefour Market alongside Bulgarian partner Parkmart holding.

Retail

One of the big players in the food and beverage sector will invest 68 million levs in opening 12 new stores and in the reconstruction of 11 already operating ones in 2024.

4. Energy:

On 13 November, the European Commission confirmed that it had received a letter from Hungary against the fee for transporting Russian gas via Bulgaria. Last week, Hungary's EU relations minister Janusz Boka said his country had asked the Commission to launch an infringement procedure against Bulgaria over the recently announced new 20 levs charge per cubic meter on the transit of Russian gas through the country.

5. Brussels:

#Victims' rights..again - The European Commission has decided to refer Bulgaria to the Court of Justice of the European Union for failing to fully transpose the Victims' Rights Directive. The objective of the Directive is to ensure that all victims of crime receive appropriate information, support and protection and are able to participate in criminal proceedings.

6. Watch out for:

The head of the National Security Agency got a boost from President Rumen Radev, who rejected the motion for his resignation. The cabinet requested Radev release Tonchev from his position for "helping destroy the trust in the machine voting process".

Place:

The city is home to both the best and the worst example of grant money.

The new sport Arena, which was supposed to be finished in 2 years and had been mooted to cost 35 million levs, took 9 years and almost twice that sum. It turned out to be unfit for purpose because the hall has failed to purchase adequate equipment for most sports it was intended to host. It transpires it can only host gymnastics competitions. This is probably the result of state-organized corruption, as the hall was one of many in the country designed to siphon away money for construction.

At the same time, the city got its first REGIOSTAR Prize for ground-breaking EU-funded projects under Cohesion Policy. The winner was the 'Cultural Art Centre: museum and library': an abandoned building reconverted into a cultural and educational center. It is now home to a museum, the largest library in South-East Bulgaria with 600 000 books, and a space which can be used for community events and workshops. Turns out, locally-designed projects are far more useful than grandiose state structures.

Institution:

Last week, Defense Minister Todor Tagarev admitted that there are a stunning 6,000 vacancies in the Bulgarian army, which amounts to a fifth of its supposed size. He blamed, among other things, a disinformation campaign by BSP and Vazrazhdane that spread a fear of mobilization of Bulgarian troops to fight in Ukraine.

Date:

1 March 2024

Is the earliest possible date when Bulgaria can drop the Russian oil completely, said the Prime minister Denkov.