The week: No country for the old

Let me explain why that is important and why, I argue, it is a lot more important than who's going to make a government.

The World Happiness Report measures life satisfaction, negative and positive emotions through popular polls and combines them in 3-year intervals, to get the median data. In those 3 parameters a lot of inputs are combined: GDP per capita, healthy life expectancy, having someone to count on, freedom to make life choices, generosity, freedom from corruption, inequality. All in all: the ingredients of a good life.

The current report's findings are quite astonishing. The whole region - Central and Eastern Europe, sees a massive increase in the levels of happiness in 2021-2023 compared to the period 2006-2010. In the top 5 of movers in the world, only one country is outside of the region - Congo. Serbia sees the largest increase, followed by Bulgaria, Latvia, and Romania. As the authors put it "Central and Eastern Europe had the largest increases, of the same size for all age groups".

This means that the "black hole" of depopulation and depression between the West and Russia is no more. For those ever 60, the gap between the two halves of Europe is about half of what it was in 2006-2010. For those under 30, happiness levels are now equal in both halves of Europe. Even the war in Ukraine seemingly can't quash the change here which is mainly led by the young. While in places like the US and Canada the 50-60 year olds are much happier than those under 30, in the CEE the reverse is true.

Bulgaria is a case in point. While the overall standing shows us at 81st place in the ranking, when you take only those under 30 we are at 40th place.

In other words, we made it. For everyone who know exactly how hard is it to make Bulgarians admit they are living better, or that they are (God forbid) better off than their neighbors, this is a massive change.

Things can, of course, go terribly wrong. But hey - we've spent 3 decades in the desert in order for a new generation to come and start afresh. That's worth at least a little toast.

This newsletter is created with the help of

Martin Dimitrov, Evgeni Ahmadzai, Mary Ivanova and Monika Varbanova

1. Politics this week:

What the hell happened to the rotation?

Do you know that cold feeling in your stomach, when you watch the washing machine going into high-spin mode and you wonder if this time something will go wrong and the whole thing will break apart? Well, we've been having this for the past week, as the rotation between GERB and WCC-DB transformed into a centrifuge.

We tried to summarize the sudden turn in the negotiations between Sunday and Tuesday here, but here is a longer timeline that would try to place everything in context:

Step 1: Hello, hello

It appears that WCC and GERB entered these negotiations with different demands. For the reformists it was important to sign a document to regulate the decision-making in the ruling majority, isolate Delyan Peevski, guarantee reforms in the judiciary and security services with a clear horizon, as well as to have a mechanism for electing the members of the regulatory bodies.

During leadership meetings GERB's Borissov declared that he wanted only two or three cabinet changes - Mariya Gabriel to keep her foreign minister portfolio and GERB to get two more ministries - the social and e-government.

Obviously that was not what he truly wanted.

Step 2: Different speeds

The two teams had to prepare a common document on the basis of the proposed memorandum by WCC-DB and the coalition agreement that GERB drafted. It turned out that GERB insisted on a new formula of power, initially proposing their representatives to head six ministries, including Energy, Innovation and Environment. The tricky two were Defense and Agriculture, which proved unacceptable to their partners.

Step 3: Talks suspended

At one point the WCC said that outgoing PM Nikolay Denkov should also become foreign minister, which became the bone of contention for some time. At this point Borissov stopped picking up the phone to the leaders of WCC-DB, leadership meetings were suspended, and the GERB chairman renewed his vicious attacks on Defense Minister Todor Tagarev and Finance Minister Assen Vassilev.

Step 4: You still there?

The talks were revitalized by an all-female negotiating team from GERB and a complete silence surrounding the process. It seemed for a moment, that we were heading into a rotation, after all. It was never clear whether the GERB negotiating team had a real mandate (i.e. if Borissov didn't call the shots regardless of what happened during the official meetings last week).

Step 5: All in

Until last Sunday, when the GERB negotiators surprisingly announced that talks had failed. Although more talks happened, nothing was concluded. Yet Gabriel returned to the President with a file in hand, containing the names of the GERB and WCC-DB ministers. This was a bold poker move by her puppet-master Borissov, daring the former partners to either jump on board or drop everything. The WCC-DB called their bluff and now we're in a no-man's land where no one is sure if we're going to have a government or not.

So now what?

To be fair, no one who knows Boyko Borissov should have been surprised by the way the supposedly routine change of Prime Ministers turned into a complete debacle that has placed Bulgaria on the precipice of yet another election. In his career so far, he has elected as health minister a person he met at an intersection on the way to Varna, and his party MPs have voted in controversial candidates for various positions, only to withdraw them dramatically later.

Speculation varies as to why he resorted to this. Some think it is the personnel changes in the intelligence services that have become a stumbling block. Others think that judicial changes and in particular the planned abolition of the investigative secrecy for cases of public interest have angered Borissov. All we know is, we've spun out of control.

2. Economy:

IMF: Budget 2024 is pro-inflationary, deficit must shrink Bulgaria's 2024 budget is expansionary and, if implemented as is, will increase demand and add to inflationary pressures. That's part of the conclusions in the regular annual economic review of the International Monetary Fund (IMF) for Bulgaria. The Fund recommends reducing the deficit by 1% of GDP. The cash deficit set by the Finance Ministry is 5.8 billion levs, or 3% of GDP, and it already faced criticism from the National Bank precisely for that.

According to the IMF, what is needed now are short-term measures, mainly to increase revenues. If these are followed, the country's accession to the euro area in 2025 is realistic, IMF mission chief in Bulgaria Jean-Francois Dauphin said.

Figures:

2.7%

The GDP growth expected for Bulgarian economy by the IMF for 2024.

3.5%

The expected annual inflation according to the same forecast.

4.3%

Is the unemployment rate in Bulgaria for 2023

3. Business:

Fintech Payhawk

The Unicorn corporate expense management company plans to hire 60 more staff in Bulgaria by the end of this year, according to its seasonal development report. At the beginning of 2024, the number of employees in Bulgaria was just over 200 (and 300 worldwide).

Supermarkets

Metro

The German wholesaler is to open at least 50 franchise mini-market outlets under the My Store brand, complementing the nine existing stores. Next year, the plan is for the number to reach 250, 480 in 2026 and 800 in 2027.

Logistics

Fantastico

The Sofia-based retail chain is building a new logistics base in Elin Pelin, next to the existing company warehouse space. The investment in the facility, which will be opened in May, is 36 million leva and it will create about 70 new jobs.

4. Energy:

A new pipeline worth 825 million levs is about to be built

With 188 votes in favor from GERB, WCC-DB and MRF the National Assembly adopted on 14 March a decision instructing the Council of Ministers to prioritize three projects worth more than 400 million euro (excl. VAT) for the gas transmission infrastructure of Bulgartransgaz. These include the increase of the natural gas transmission capacity at the point of interconnection Kulata/Sidirokastro in the direction from Greece to Bulgaria and at the Negru Voda/Kardam interconnection point from Bulgaria to Romania, respectively, as well as the construction of high pressure gas transmission infrastructure to supply consumers in the Maritsa East basin.

The three projects are part of the so-called Vertical Corridor initiative, which provides gas transmission opportunities between Bulgaria, Greece, Romania, Hungary, Slovakia, Ukraine and Moldova. The last one hints at the possibility that the state might try to gasify the coal-powered Maritsa East power plants instead of completely shutting it down.

MPs approve Bulgaria-US cooperation on new Kozloduy NPP units in a final vote

On the same day and with the same votes (plus the votes of the minor oppositional TISP party), the National Assembly ratified a cooperation agreement signed on 12 February between Bulgaria and the US for the construction of new nuclear capacity at Kozloduy NPP. The ratification of the agreement has largely been seen as an attempt by the majority in parliament to circumvent the process of selecting a strategic investor for the construction of the new nuclear units and to directly assign the project to US company Westinghouse.

5. Brussels

#Bulgaria's eurozone accession - Bulgaria could still join the single euro currency in 2025, Eurozone President Paschal Donohoe told Capital. However, falling inflation and political stability are the main tasks ahead, he added.

#EU enlargement- Brussels wants to gradually ease Ukraine, Moldova and the Western Balkans into the EU. The Commission announced some more membership benefits for those in the EU waiting room, rather than waiting for years or decades while they undertake the necessary reforms. In particular, Brussels is proposing to gradually allow accession countries to join the single market, as it was recommended by the advisory Group of 12 in the last year.

6. Watch out for:

People: Dimitar Avramov

This week the ex-GERB and current MRF deputy became one of the rare cases of a Bulgarian politician successfully sentenced for corruption, more precisely - for receiving a bribe and influence peddling. The caveats: it's a one-year sentence, and on top of that it is a suspended one. Also, it comes a full 12 years after the prosecution raised allegations against him. Talk about effective prevention.

Georgi Ivanov - Gonzo

The ex-Levski striker and director in the Bulgarian football Union was elected to inherit the organization after Borislav Mihaylov's era of almost 20 years at the top ended last week. Gonzo's win was a surprise given the efforts of the "reformist trio" - Dimitar Berbatov, Stilyan Petrov and Martin Petrov - to restart the Union and the football scene in Bulgaria. Petty backroom deals proved stronger and the new chief promised "minor changes". Expectnothing.

Date:

30 June

The date when the Church Council, which is to elect a new Patriarch of the Bulgarian Orthodox Church after the death of Father Neofit last week, will take place.

Institution:

Customs Agency

The European Magistrates for Democracy and Liberties (MEDEL) is among the four European magistrates' organizations alongside the European Judges Association, the Judges for Judges Foundation and the Association of European Administrative Judges who wrote an open letter, expressing their "strong concern about the situation of the judiciary in Bulgaria, where cases of judges being subjected to pressure and intimidating behavior in relation to the performance of their professional duties have been reported." The letter is connected to the ongoing repressions against judges Vladislava Tsarigradska and Tsvetko Lazarov, who have spoken up against the informal networks of influence led by Petyo "the Euro" Petrov and the assassinated Martin "the Notary" Bozhanov.