The week: We’re still on the outskirts of an Empire, The most important regulator, Real estate deals keep coming down

The week: We’re still on the outskirts of an Empire, The most important regulator, Real estate deals keep coming down

It's rare to have an EU agency moving HQs. It's even rarer to have a new agency being set-up and looking for a home.

The EU agencies are like ministries, yet on a grand scale. Think of all the networks and supporting infrastructure that comes with them: administration, experts, think-tanks, regulators, lobbyists. They bring image, recognition and of course, money. They are seats of power for a 500-million-strong market.

For a very long time, only the Western part of the EU was home to agencies. It is, after all, where most of the power lies. Some time ago, the Union realized this is one of the most efficient decentralizing tools it owns and started spreading them wider. As of now, there are only 4 countries without an EU agency in one form of the other: the far-away Cyprus, the newcomer Croatia, Estonia and ours truly - Bulgaria.

You would suppose that when a new EU agency comes up for grabs, one of those four would be in the poll position. And you would be wrong.

The new agency is the Anti-Money Laundering unit and it will be vital for a lot of things in a Union that craves global financial importance. The list of cities vying for the prize suggests so: it ranges from (obviously) Frankfurt and Brussels, through the top-level stars Paris, Rome and Madrid, to eastern unicorns like Vilnius and Riga.

Now I know you'd laugh when I say Bulgaria is, quite understandably, not on this list. For starters, we recently made it on a new "gray list" for money laundering, which is not exactly surprising for a country where institutions are unable to trace tens of millions of euros vanishing into thin air in the middle of its capital.

If you ask me, however, I'd argue that the EU needs to base exactly a Rule-of-Law agency here. Yes, this one is quite fancy and requires strong financial and investigative institutions in order to function properly, so we're obviously unfit. But if you want to strengthen your flank and make sure the foundations here are rectified, you would want to base here an agency which will help in that process along the way.

No way Sofia can attract such a top-level institution, I hear you say. Well, not on its own, no. Obviously, it is on the further reaches of the Union. But a little help from the center will surely help. Just to remind you - the Silicon Valley was basically farms and houses before William Shockley came to work in Palo Alto and the military started putting money into transistors.

And by the way, to the attention of Sofia mayor, as to any other mayor in the country, here's the list of what the new agency is looking for in a city:

  • Quick and easy relocation to top-level offices

My advice for the administration is: memorize this list and turn it into a gospel. You need to provide this on a day-to-day basis. This is what every investor that is worth your efforts will look for in your city.

This newsletter is helped by

Martin Dimitrov, Monika Varbanova, Evgeni Akhmadzai, Mary Ivanova

Politics this week:

The most important regulator

You've probably heard of the Commission on Protection of Competition (CPC). Well, for a plenty of reasons, this is the most important regulator in Bulgaria. It can alter any procurement procedure and almost any business deal. And it is almost entirely run by former PM Boyko Borissov and his mate Delyan Peevski.

The mandate of the current Commission expired last June. Suddenly, Kiril Petkov - the leader of the ruling We Continue the Change party, said on Thursday they need "to change it as soon as possible". The reason is the expected approval by the CPC of the notified acquisition of Bulsatcom by Dutch-based United Group - owner of of Bulgarian telecom Vivacom, which will seriously affect the TV and internet market. The other two telecoms on the market screamed "foul" and workers from Bulsatcom planned a protest in front of the CPC headquarters.

Not so fast, mate

As expected, Petkov's partners in government, the above mentioned two, are rather unhappy with that. To quote Mr. Peevski: "There are many mandates that have expired. We can begin negotiating. Nothing is urgent". I suppose that a month before the so-called "rotation" in the cabinet nothing seems urgent to Mr. Peevski.

Speaking of rotations: "Mr. Magnitsky" goes after "Mr. Cash"

The omnipotent Peevski got his hands full with yet another hit this week. Hardly a day goes by without him being in the news: this time for attacking President Rumen Radev.

The president dared oppose the decision to appoint Desislava Atanasova (who, we hear, is really close to Mr. Peevski) and Borislav Belazelkov as judges at the Constitutional Court. This seems to have infuriated the unofficial MRF chairman, who accused Radev of corruption and illicit financing of a future political party he is said to be creating.

Peevski, who is the object of high-level corruption sanctions from the US and the UK, asked rhetorically in front of journalists if the Interior Ministry, the counterintelligence agency DANS and the Prosecutor's Office have ever received any signals of corruption against members of the advisory cabinet of President Radev (which is another way of saying "I got you by the balls").

Attacking the only competitor

On the surface, President Rumen Radev had appeared isolated and marginalized by the "Euro-Atlantic" majority of GERB, WCC-DB and MRF in the last nine months since he lost control of the executive through the caretaker governments he had appointed. But he still is the main rival in the political field and Peevski's attack proves that.

The MRF politician connected the corruption allegations to the supposed plans of the President to launch or endorse his own political party (called 3 March), and even taunted Radev to leave office. Nicknaming him "Mr. Cash", he accused Radev of plans to finance the project with illicit kickbacks that his close circle had collected during the reign of the caretaker cabinets.

A pinch of truth

This accusation is not new - there are more than a few witnesses to how people around Radev behaved during his reign. And the President probably does think of his own political platform - he already gave such indications last year, when the abolition of 3 March as a national holiday was proposed and he launched a campaign for a referendum in defense of the date of the liberation of Bulgaria from Ottoman rule by Russia.

A few days ago, it was announced that an ex-caretaker minister close to Radev, Vessela Lecheva, had registered in the Patent Office the trademark "3 March Movement.


Mobile operators raise prices, causing public and political ire

The three telecoms announced in unison price hikes for their monthly subscriptions, causing outrage and calls for stricter regulation by politicians. Yettel Bulgaria announced on Tuesday it will raise its subscription prices by the annual average Consumer Price Index for 2023, which is 9.5%. Last week, the other two operators, A1 Bulgaria and Vivacom, also signaled such an intention. Vivacom's subscribers will pay 4.5% more than last year, while A1 is still considering what the increase will be.

CPC sees no cartel - once again

This is the second price increase in the span of one year, despite the fact that the state made serious concessions to the telecoms in 2023.

The move provoked a quick reaction from politicians, with Ivaylo Mirchev MP (WCC-DB) saying that by the end of this year the parliament will implement measures to counteract the cartel in the sector, including conditions for new players to enter the market, new rules for the work of the CPC and the Consumer Protection Commission, as well as change of their composition.

EU energy funds to support thermal insulation of homes

The 480 million euro that Bulgaria will receive from the REPowerEU facility that aims to end reliance on Russian fossil fuels before 2030 might go towards the program for insulating apartment blocks instead, Finance Minister Assen Vassilev hinted on Tuesday. This would mean that the Energy Ministry will have to abandon the seven projects that it has been working on for several months in favor of the long-discredited housing insulation program.

These included projects to digitally transform the electricity grid and adapt it to integrate renewables, launch near-zero consumption district heating in several cities and launch feasibility studies for the construction of PV power plants next to existing dams.



The rate of decrease of the number of real estate deals in 2023 on a year-on-year basis. The last quarter of 2023 was the 4th quarter in a row with a drop in transactions, although there was a slight increase at the end of December in Sofia, Plovdiv and Ruse.


out of 23 big Bulgarian companies, tracked by Capital, saw a rise in revenue last year. This is a bellwether for the whole economy, which grew slower in 2023 due to problems in the Eurozone.




Is the first bank ever in Bulgaria with a profit of over 1.0 billion levs (500 million euro). This is practically 30% of the whole profit in the sector, which by the way is at a record level of 3.4 billion levs for 2023. UBB is the biggest bank in Bulgaria with 34 billion levs in assets at the end of last year


Europapier Bulgaria

The Austrian-owned enterprise, which is part of Europapier - the CEE leader in the sector, plans to acquire Plovdiv-based Micro Asu


#Ukraine - EU leaders agreed on Thursday on a deal to provide predictable long-term financing to Ukraine, ending weeks of uncertainty. The swift agreement came after a small group of EU leaders persuaded Hungarian PM Victor Orbán to drop his veto over the funding package of €50 billion.

#Ammunition - The EU acknowledged during the Council of defense ministers in Brussels this week that it was forced to delay its ambitious plan of sending 1 million artillery rounds to Ukraine by March, despite a boost to Europe's capacity. Тhe bloc is planning to provide Ukraine with only about 600,000 rounds of ammunition at this stage.

Watch out for:


Hakan Fidan

The new Turkish Foreign Minister's visit to Bulgaria raised some questions, as it began with two separate meetings with senior representatives of the MRF party, including the new informal leader Delyan Peevski. This hints at the complicated behind-the-scenes relations between Turkey and the party that draws its support among Bulgarian ethnic Turks and Muslims and also reminded Bulgarian politicians Ankara keeps its fingers on the local pulse.

Simeon Saxe-Coburg Gotha

The last Bulgarian Tzar will receive 1.6 million euro from the state as compensation for a 2009 moratorium over the so-called "Tzar estates". This is the decision by the ECHR, where Simeon II is suing Bulgaria over 16.5 thousand hectares of forests in the Rila Mountain.


Gorna Banya

The Sofia district where Martin Bozhanov, a.k.a. The Notary was shot dead. This is yet another mafia-style killing that shook Sofia this week. "Martin the Notary" was one of the notorious consiglieres who was a middleman between high-ranking magistrates and people whom they prosecuted - as the famous 8 dwarfs case showed. As an investigation of the Anti-corruption Fund showed, Bozhanov was implicated in some VIP cases of "mediation" between members of the now defunct Specialized Criminal Court and its clients.


Sustainable Cities Fund

Just closed the first round of investment of over 330 million levs in Bulgarian cities. The Fund delivered low-interest loans to municipalities and companies for urban-renewal projects.

First Investment Bank

Has seen its shares go down rapidly, after Kapital revealed the bank is gearing up for a fight with the biggest debt-collector company in Bulgaria - S.G. Group which is connected to the Money+ group. The bank gave out loans to the group which bought some of its problematic debt. That helped FIB pass the ECB test some years ago, but now it seems, the chickens came home to roost and S.G.Group is not paying what it owes. This might prove to be a problem for the bank.


20 February

Kapital will hold the biggest Energy Summit in the country, to be attended by high-ranking state officials and business leaders from the whole region.

Word of the Week:

Безплатно (free of charge)

This week, the Ministry of Education announced out of the blue that it will abolish university fees for all students. The surprise decision raised many eyebrows - and caused the usual polarization of opinions. For some, especially on the left, the move was a small, but positive step towards the provision of an important public good by the state. But most skeptics who believe "there is no free lunch" saw in the cabinet's decision an attempt to postpone much-needed higher education reform even further, and make universities even more dependent on state subsidies than they are at the moment. In any case, in a typical Bulgarian fashion, the decision came without any public discussions or impact assessment, leaving a lot of questions open (for example, how would it affect the lucrative business model of teaching foreign students that local medical universities have established in recent years, if their exuberant international fees don't apply to EU students anymore?)

It's rare to have an EU agency moving HQs. It's even rarer to have a new agency being set-up and looking for a home.

The EU agencies are like ministries, yet on a grand scale. Think of all the networks and supporting infrastructure that comes with them: administration, experts, think-tanks, regulators, lobbyists. They bring image, recognition and of course, money. They are seats of power for a 500-million-strong market.

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