The week: Fly, don't float - Bulgaria enters Schengen

The week: Fly, don't float - Bulgaria enters Schengen

Schengen entry is upon us, Who wants to be a Prime Minister, A very rich church

© Capital weekly

Imagine you live near the Danube. Starting midnight of 30th of March, Bulgaria and Romania will enter the Schengen airspace and waterspace: meaning their citizens and goods can travel freely without checks if they arrive by air or water. So you start your boat on Sunday, pack up some beers and head for the Romanian shore, to celebrate the occasion.

That would still count as trespassing a national border.

You see, the Danube is a land border, said the European Commission when asked about that by Capital. It might seem a bit watery to you, but Schengen entry does not cover it.

And that's only the first misunderstanding, when it comes to the waterspace. The bigger one is the Black Sea. At first, when asked, the EC said that of course, all travelers and cargo between Romania and Bulgaria sea ports are covered by the agreement. But that's not the point, unless we expect someone to travel between the two countries by sea (not a very popular route). Does passing the Bosphorus strait count as exiting the Schengen zone which in turn means that re-entering will guarantee more checks?

As far as we can tell, no. If you're not stopping in Turkey, you're safe. From what we hear, though, nobody at Varna port is actually sure of that. I take it it's the same in Burgas. The mere fact that no clear guidance is available, makes it a nightmare for businesses and institutions. We wouldn't recommend doing it in the next few months, if you count on fast deliveries. And don't worry - the situation will not go away soon.

All in all, Bulgaria and Romania entry has been handicapped because of Austria. A lot of people are hoping for a full entry this year, so we might disappoint you: our forecast is no. Bulgaria is heading for new elections and a new government, Austria and the EU too. Unless a political miracle is pulled by the Belgian or Hungarian presidency, this is a DOA issue.

But there's of course, a brighter side: no more checks on air travel and cargo. Expect an uptick in both which will mainly go towards Sofia Airport - the biggest hub for passengers and cargo. Plovdiv Airport, which for years hoped to be a cargo hub and might have benefited immensely from the current situation, does not have a cargo terminal. It has no money, neither the capacity to build one soon enough, so that's that. We've spent a generation (24 years) from the lifting of visas to Schengen entry.

Hopefully we won't spend another one on full acceptance.

This newsletter is created with the help of

Martin Dimitrov, Evgeni Ahmadzai, Mary Ivanova and Monika Varbanova

1. Politics this week:

There we go again: early elections now certain

After the cabinet negotiations between WCC-DB and GERB hit a wall - in fact, several walls in the matter of two weeks - it is now certain that Bulgarians will be voting in more than the European Parliament elections this year. None of the parties that got the second and third exploratory mandate by President Rumen Radev - WCC-DB and TISP, respectively, did not attempt to propose a cabinet, knowing that this would be a doomed endeavor.

2 in 1?

The question now is whether the early parliamentary vote could coincide with the MEP vote, which ought to take place on 9 June, as the timetable is quite tight - there are only two months and a week until then, which would hardly be enough for the President to carry out the consultations before the appointment of a caretaker cabinet, and leave enough time for the compulsory month-long elections campaign, as well as for the actual organization of the vote.

Talking about caretaker cabinets, here's the thing.

New Constitution

At the end of last year Parliament passed a set of Constitutional amendments, some of which were obviously targeted at dismantling the caretaker cabinet institution. The parties wanted to close the loophole that allowed the President to practically rule unchecked via his proxy cabinets in times of political fragmentation.

So they did. And now the President can only choose a PM from a shortlist of possible candidates, which include the president of the National Assembly, the governor or sub-governor of BNB, the president or deputy president of the Court of Auditors, the ombudsman or their deputy.

Old Problems

Well guess what. Many of these supposedly independent positions are held by GERB loyalists. Party chairman Boyko Borissov called on two of them - Parliament speaker Rosen Zhelyazkov and the chairman of the audit agency Dimitar Glavchev - not to accept a potential nomination by the President.

Prime Minister? No, thank you

The BNB people said they can't do it, as the ECB supposedly voiced disapproval before the eurozone entry. The ombudsman already was elected as a judge in the European Court of Human Rights, and its deputy resigned this week, obviously unwilling to find herself suddenly a PM overnight.

Which leaves very few potential candidates in the game. But also begs the question: how did we find ourselves in this situation? Rushing to show things done, the deputies left much of the work on clarifying the legal texts for a later date and a special new law - which never came to be. So now we don't know what happens if the President and the parties nominate different PMs and what happens if all of these nominees don't want to become PM.

So all in all: quite disappointed in the governance of the country

This is the attitude of most Bulgarians according to a Gallup International study published on Wednesday. According to the poll, 61% of the people say they do not believe that the country is governed by the will of its citizens and only 13% believe the opposite is true, with 22% undecided. What is more, almost half of Bulgarians find the elections unfair (49%), only 21% perceive them as free and fair and 20% neither agree nor reject the statement. The rest could not answer.


Do not rush to conclusions. Living in a system where a few people decide everything, where captured institutions fail to provide justice or progress, and you've seen billions being drained by totally unpunished corruption can do that to your worldview. The mere fact that a narrow majority (51%) say they see democracy as the best system of government, is in itself, a good omen.

2. Economy:

Finance ministry wants to raise 200 million levs through a 3-year bond issue in April

The government intends to return to the domestic debt market next month. The first auction of the year is being prepared for 15 April, with plans to offer three-year government bonds. The Ministry confirmed the planned auction with Capital weekly, saying that the resumption of issuance activity on the domestic market after more than a year's absence has been "caused by various internal and external factors." The forthcoming issue is relatively small and does not in itself contribute significantly to the State securing the necessary funding for 2024, which envisages 11.7 billion levs deficit ceiling, and likely real expenditure of about 9.5 billion.


750 million euro

The total amount of funding that will be available to Bulgarian startups in the next two years, with the state-owned Fund of Funds contributing 350 million euro through 8 new funds and the European Investment Fund (EIF) - 400 million of risk capital more in at least 5 new funds.


of the EU median is the Bulgarian GDP per capita in PPP for 2023, which leaves us last in the Union.

3. Business:

Retail Carrefour

The French supermarket chain Carrefour has returned to Bulgaria after almost a decade of absence by opening two stores in the capital on 27 March. They are a smaller format than its previous sites, with 25 locations expected to be operational by the end of the year.



After failing to win the bid for delivery of new fighters for the airforce and closing its representation in Bulgaria in 2019, the Swedish defense manufacturer announced its return to Bulgaria and its intent to compete in at least three modernization projects of the Defense Ministry - for new coastal anti-ship missile complex, long-range rocket artillery and portable anti-tank systems for the needs of special operations forces.

4. Energy:

ContourGlobal starts laying off people

After the expiry of its long-term contract with the National Electric Company and the suspension of work from February 20 this year, the ContourGlobal Maritsa-East 3 Thermal Power Plant announced it is laying off 160 of its 450 workers in an attempt to optimize its costs and to preserve the possibility of restarting the capacity. The plant remains hesitant about future plans, but foresees "back to work" conditions. Currently, the coal plant cannot operate due to the low prices on the exchange and is being priced out by cheaper sources of electricity.

5. Brussels

#EU degree - The European Commission presented this week three initiatives to advance transnational cooperation between higher education institutions, with the ultimate goal of creating a European degree. A voluntary European degree would benefit students and the higher education community by boosting learning mobility within the EU and by enhancing students' transversal skills.

#Traineeships- The European Commission is taking action to improve working conditions for trainees, including pay, inclusiveness and quality of traineeships in the EU by regulating how internships will be realized. In 2019, the latest available reliable data, there were an estimated 3.1 million trainees in the EU. Approximately half of all trainees (1.6 million) were paid.

#Tariffs and trade - The Commission is also today proposing to increase the tariffs on imports into the EU of cereals, oilseeds, and derived products ('grain products') from Russia and Belarus, including wheat, maize, and sunflower meal.

6. Watch out for:

Person: Merdin Bairyam

The mayor of Varbitsa (village near Shumen) appeared on every single section (apart from the windshield, likely over safety concerns) of all new transport minivans that his administration purchased for the needs of the public transit in the locality. Asked about the peculiar decision - which is reminiscent of the good practices in some authoritarian Central Asian countries, the mayor commented that "this is what the people asked for." Bairyam has held the mayoral post there since 2011 and won the last election with a record 94.44% of the votes. At the same time, there are objective reasons for his popularity - he managed to reopen the village's hospital, a no small feat.


Black Sea France's TotalEnergies announced its withdrawal from exploring Khan Asparuh gas block for oil and gas along with OMV Petrom. The company will transfer its share to the Austrian-Romanian branch of OMV. A year ago, the general manager of TotalEnergies for Bulgaria, Yves Le Stunf, had pinned hopes on the eastern part of Khan Asparuh showing sufficient gas reserves. Drilling, however, will cost between 80 million and 100 million dollars.

If you ask us, and we hear things, it's not only the money that is a problem. The Black Sea is basically a war zone and mines, ships and rockets fly around. Mining for oil in it might prove costly due to the very high insurance costs.


On Wednesday, the cabinet appointed three carriers for routes connecting Bulgaria with China.

Bulgaria Air and Gulliver will carry passengers and operate scheduled combined services between Sofia and Beijing and Sofia and Shanghai three times a week each, while Compass Cargo Airlines will carry regular cargo between Sofia and Shanghai, as well as to Zhengzhou and Shenzhen.


Toplofikacia Sofia

Whose 1.6 Billion levs in debt will be covered by the Energy Ministry. The debt is towards the state-owned energy companies and means that for yet another time, every taxpayer in the country is going to pay for the bad decision-making in Sofia's heating company. It also means the company is probably gearing up for a concession.
ZEN of the week:

Фотограф: Capital weekly

This BMW i7 appeared in front of the Plovdiv Bishop's Seat, bearing a German license plate and the symbol of the local Bishop, together with a blue sticker from the municipality (probably for either free parking or disability - neither of which can be granted to a foreign-registered vehicle). Seems like not paying taxes is good for the pocket: the price for this car starts from over 200 thousand levs.

Imagine you live near the Danube. Starting midnight of 30th of March, Bulgaria and Romania will enter the Schengen airspace and waterspace: meaning their citizens and goods can travel freely without checks if they arrive by air or water. So you start your boat on Sunday, pack up some beers and head for the Romanian shore, to celebrate the occasion.

That would still count as trespassing a national border.

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