The week: Finally, some money for the cities

Yes, in the top 3 of the most expensive projects are the Varna library with 60 mln.levs, and 2 Plovdiv stadiums with a combined value of 75 mln. Go in there, find the municipality you care about and figure out what they've received money for.

As someone who's been arguing for years for more money for the cities (outside Sofia) this is welcome. It was always grossly unfair for one city to reap the lion share of the benefits of EU funding and state support. The money Sofia got only for the subway overshadows almost everything received by the other 20 cities combined.

If we want to make the cities better, more money is always a good start.

Yet it's also very important how that money is spent.

Right now we're in the old fallacy: any projects that were left on the desks, were handed in and received funding. So the money is distributed not on the basis of "what we need the most", but "what we have left in our drawers". And that's not the same. Sure, Plovdiv can benefit from not 1, but 2 state-of-the-art stadiums. But how about a working public transportation? Or an e-administration system?

But that's a different topic and I'm not going to delve into the details of who and how is going to control the money. The thing that matters is the outgoing government untied the hands of the local power and gave them instruments to work with.

This puts them in a vastly different situation to a year ago: they will not go begging hat in hand to Sofia and they are somewhat immune from the turbulence at the center.

This will be important, because as you will see below, turbulence is what we mostly forecast.

This newsletter is created with the help of

Martin Dimitrov, Evgeni Ahmadzai, Mary Ivanova and Monika Varbanova

Politics this week:

This has been a very confusing week for anyone following Bulgarian politics. It started right after the resignation of the government, with an anti-corruption operation against an alleged high-level smuggling ring involving the newly appointed head of the Customs Agency Petya Bankova and the (now fired) General Secretary of the Internal Ministry Zhivko Kotsev. It also involves a poodle and stacks of cash, which were found on pictures, purportedly found on the phone of Kotsev by investigators (how and why they reached the media, is what you need to ask yourselves).

It has been all over the news in the last ten days, but the whole thing is a mess. And that's because politicians (mostly from GERB), were using their air time to confuse people and shout "corruption" and "contraband".

So we tried to explain to you the basics on Monday, but here it is in a nutshell - what exactly is going on, who is indicted (and for what, exactly) and why it matters.

First, the Customs

On 3 April, Bankova was arrested by the National Security Agency (DANS) and the Anti-corruption commission (ACC) alongside six others on suspicion of their participation in an organized crime group for drugs smuggling and money laundering. She said this was a personal vendetta against her by her ex-DANS boss and rejected all charges. It was the first time a Customs chief was arrested, yet Bankova is probably one of the shortest-lived directors in memory.

Then, the police

On the next day, the police secretary general Zhivko Kotsev surprisingly filed his resignation. It turned out that he did this after being interrogated by the ACC and, more importantly - after meeting Prosecutor General Borislav Sarafov. A few days later, when the court published its decision on the pre-trial detention order of Bankova and her alleged accomplices, Kotsev did not appear as a defendant - which hinted that he was, in fact, sought as a "secret witness." The reason - he was connected to the alleged smugglers in question, and was, it seems, a rather close friend with them.

The dog comes in

Yet you can always trust the Prosecution service to do some leaks. And so pictures from phones started emerging: Kotsev with an expensive watch, with his girlfriend and former GERB minister of tourism Nikolina Angelkova. Kotsev, accompanied by one of the defendants in Bankova's case, going to the beach and even attending the birthday of ex-Internal Minister and current WCC deputy Boyko Rashkov. While most of the photos did not seem inter-connected, one thing united them: the same poodle dog (likely belonging to one of the alleged smugglers) appeared on all of them. Including - with piles of cash on.

The political dimension

Even if we accept that Bankova and Kotzev are knee-deep in dog shit, so to say, it's hard to miss the timing of this "anti-corruption" action. This is obviously not something DANS came up with a day ago. It was conveniently timed to match the fall of the government (and the unofficial union of WCC-DB with GERB and MRF). And it sends two messages.

First, the campaign will be very dirty and the goal will be to discredit key political figures from WCC-DB. And GERB knows they only need to throw a bone and others will jump. To prove that, what do you think is the name of the parliamentary investigation committee on the matter? "Ad Hoc Committee to Investigate Corrupt Practices at the Customs Agency and the Possible Role of Assen Vassilev in Them".

And second, it sends the message that it can get a lot worse. The directors of this scandal are issuing a warning. Look at how much mud we've been able to throw in just one week and its effects on opinion. We've convinced the public that something is rotten with the WCC-DB leadership, changed the leadership of several key institutions and used the whole spectrum of force: DANS, the prosecutor's office and the anti-corruption commission, as well as the media. So, will you play nice with us next time?

The personal dimension

Do not underestimate the ego and the rage of Borissov and Peevski. Funnily enough - the new batch of pictures emerged on the same website where the first pictures of Borissov were leaked, lying next to piles of cash. And if we use his own words: "He who draws the bundles of cash, dies by the bundles of cash."

Economy:

The rise of revenues in hotels in February this year, which comes despite a 2.5% decrease in the occupancy rate of rooms.

8.3%

The contraction in Industrial production in Bulgaria in February compared to the same month last year, according to seasonally adjusted data from the National Statistical Institute (NSI). The mining industry experienced a significant annual decline of 20.8%, while production and distribution of electricity, heat energy, and gas decreased by 20.7%. The manufacturing industry also saw a decline of 3.3%.

Business:

The public holding company intends to conduct a large-scale issuance of securities to raise up to 130 million levs, with potential for more than 500 million levs in the future, on the Bulgarian Stock Exchange.

AI

Sofia-based Institute for Computer Science, Artificial Intelligence, and Technologies and Toyota will collaborate on developing a new generation robot with embedded artificial intelligence. Toyota is funding robotics research in Bulgaria, aiming to create a new type of artificial intelligence embedded in a robot, incorporating audio commands, natural language commands, and computer vision for object recognition.

Digital

The Bulgarian cloud services firm, part of the investment company 6ix Capital, became "Partner of the Year" in the category "Expansion" for 2024 of Google Cloud for the EMEA region.

Coffee

The coffee plant in Kostinbrod, part of the Dutch Jacobs Douwe Egberts International (JDE), plans to produce 25% more coffee in 2024 compared to the previous year. The increased volume will be the result of a 5 million euro investment.

Industry

Lovech's industrial park Balkan has applied for a 30 million levs funding under the National Recovery and Sustainability Plan which would help it establish infrastructure for attracting investors. This was announced by the mayor of Lovech, Strassimir Petkov, during the Meeting of businesses in Pleven, Lovech and the region, organized by Capital weekly.

Energy:

The past week has been marked by record levels of solar electricity production. The lengthy heatwave brought high temperatures country-wide and powered up the over 3000 MW solar installations. Thanks to solar, during midday hours green electricity went over 80% of the demand and exports to neighboring countries began again. Nevertheless, solar production brings controversies due to zero and negative prices which are storming the exchanges and contradicting installations' revenues.

Watch out for:

Bulgarian-born entrepreneur and his Varda Space Industries has raised 90 million dollars to expand its production of pharmaceuticals. Asparouhov announced this week that the company has completed a Series B round led by venture firm Caffeinated Capital, with participation from Lux Capital, General Catalyst, Founders Fund and Khosla Ventures, which brings the capital it has raised to date to 145 million dollars.

Place:

has been broken for several years. Instead of producing RDF (refuse derived fuel) and thus reducing landfill, the garbage simply passes through it and is directly buried at a nearby landfill. This is illegal and violates a bunch of European directives, and may also be of interest to European prosecutors, since the facility was built with EU funds and is apparently not functioning. All of this has been known since 2020, when Capital Weekly exposed that the plant was not working as intended and 100,000 tonnes of rubbish a year were going to the Dolni Bogrov landfill instead of being turned into energy. Nothing happened then.

Suddenly, this week, as part of the whole dirty campaign, GERB municipal councilors launched an investigation, publishing a report that highlighted the issues and signaled the Regional Environmental Inspectorate with a request for an immediate inspection. The only thing that's changed since 2000 is Sofia's new mayor - Vassil Terziev. Politics is indeed a dirty game.

Dates:

Bratska Mogila Park in the Sofia neighborhood of Orlandovtsi is hosting the traditional TABIET festival, held since 2018. For four days, organizers promise music and traditional Bulgarian cuisine, along with gourmet street food offerings. Chefs will demonstrate their interpretations of dishes from Balkan cuisine.

Institution:

Bulgaria is about to become the first country in Europe with AP1000 reactors, said the CEO of the Engineering unit of the South Korean company Yoon Young-Joon. Speaking to Capital, he showed confidence in the ability to meet the challenging task of completing the first block within a fixed cost and 60-month construction period. He also expects to engage around 10,000 workers on-site at the peak of construction activities.

Weekly moment of Zen:

Source: Afera.bg

The picture of Zhivko Kotsev's poodle playing around with bundles of cash became an insta-meme on Bulgarian social media, so we had to share it with you in case you missed it.