The week: A hot political summer just turned nuclear, A bridge to Romania gets closed and a Historical Ponzi scheme

Not only has this not been happening, but things are going in reverse. The electoral committee, acting on a tip-off from a pro-GERB blogger, has already removed a second district mayor from his position, due to a minor transgression of not leaving a company in which he has a small share. Several more are on the firing line.

This opens up the question of not only what exactly constitutes an offense for which an elected official should be removed (owning a share of a company, for example), but also - how a committee can so easily overthrow the vote of the people. The same thing has been occurring in Varna. We're now waiting for it to happen not only to district mayors, but to the mayor of Sofia as well.

In the meantime, the anti-change rag-tag coalition of GERB, Socialists and nationalists have banded together to try and destroy whatever is left of the city. They have not only blocked any possible changes to the way Sofia's municipal companies are run, but they've installed new people in all of them, ensuring tight and untransparent control over a 3 billion levs economy.

Just one, really outrageous example: they've thrown out Stoyan Bratoev - the chief of Sofia Metro, the most successful Project Manager in the country and the guy who kept GERB winning for over a decade. There were no reasons given for this and he is replaced by someone from the railway company (the biggest black hole in the country). Bratoev was only saved when Vanya Grigorova - an ex-union leader and a candidate for mayor from the Socialist party - demanded a vote on his return to the post.

So there must be only one explanation. They simply want Sofia to fail. Simply put, Boyko Borissov wants to watch his old city burn, rather than hand it to others.

I'm saying this, just to remind you that Dogan and Peevski aside, we are still very, very far from normality.

This newsletter is helped by

Martin Dimitrov

Politics this week:

Two weeks after Delyan Peevski's large-scale purge in the MRF, which caused a crisis in the party, we finally have the long-awaited decision of the movement's honorary chairman Ahmed Dogan on how to resolve it. It is a radical, albeit not really surprising one - in a statement to the party's members and sympathizers from Wednesday evening, Dogan officially demanded Peevski's resignation as a co-chairman of the movement, alongside five other senior party functionaries and MPs close to him.

Tough love

While Peevski has been claiming he adores Dogan and will do anything for him, in his address Dogan states that the MRF is experiencing a serious crisis. Dogan claims this is caused by systematic non-compliance with the party's statutes, gross violation of the decisions of the last national conference of the movement and "brutal treatment of the members of the party's governing bodies, the MRF deputies and the regional and municipal structures," including by institutionalized pressure from the State Prosecution.

Dangerous Liaisons

While he was trying desperately to save face, Peevski suddenly faced the consequences of his own temperament: Capital learned of a letter, sent to embassies last week, assuring them Dogan is a Russian puppet. The letter was confirmed with several sources, yet the man signed on the form - Stanislav Anastasov, said his mail was "tampered with". As a source said: "we all know it was him. The other letters before that sound like that also".

And that's how it's done: calling in some help from abroad

Dogan was rather more successful in his international outreach: the Liberal Alliance of Europe suddenly awoke to the news that Peevski is a Magnitsky-sanctioned person. Parties from Germany, Austria, Slovenia, Slovakia and Netherlands signed letters demanding that he leave the party and the alliance or MRF would be ejected in its entirety. This is rich, coming from people who didn't mind being in an Alliance with Peevski in the elections just a month ago.

Peevski not going down without a fight

If you ever wondered if the poster boy of political corruption will simply go away, the answer is obviously not. Shortly after Dogan's address circulated in Bulgarian media, Peevski responded through the party press center that he "will not give up", ""will not betray the trust of the people" and will continue implementing what he called a "new beginning". 21 Dogan loyalists were kicked out from the MRF parliamentary group, while an online war began: all mentions of Peevski were removed from the party website.

So now we wait. It is probable Peevski and his loyalists will try to set up their own party, which will be a spectacular fail, in my opinion.

The way forward: all against one?

One of the unexpected effects of the MRF split is that, after kicking out half of its members, the movement no longer has the second largest parliamentary group. This comes at a very awkward moment just as President Radev has to issue the second exploratory mandate to form a cabinet to the second largest party in parliament (it's been Peevski's dream for a while to hold this in his hands).

It looks like this will now fall to WCC-DB, which will get another chance to form a cabinet. This would have been impossible just a week ago. However, an opportunity for an anti-Peevski coalition is opening up and there just might be a way forward.

Economy:

After Bulgarian exports of goods grew in April for the first time in almost a year, the data for May showed a decline once more. For the first five months of the year, goods worth over 43 billion levs were sold, which amounts to a 6.6% decrease compared to the same period last year. In May alone, the drop was 9.3%, coming from both exports to EU countries and sales to third countries. The decline is due to lower prices, reduced quantities of fuel, electricity, and stagnant economic activity in Europe.

Industrial production also continues to fall

The national statistics also report a decline in the index of industrial production in Bulgaria - both on a monthly basis (down 3.3%) and on an annual basis (-6.3%), as a large part of the manufacturing companies work precisely for export. The decline compared to May 2023 is larger in the mining industry and especially in coal mining (down 56%). In manufacturing, the statistics show the largest declines in the production of vehicles excluding cars (almost 30%) and footwear (27%).

Figure:

1.4 billion levs

Bulgaria's losses from the delay of full accession to Schengen according to a report by the Institute for Economic Research at the Bulgarian Academy of Sciences, which was presented by caretaker Economy Minister Petko Nikolov on Monday.

Business:

Endeavor

The international entrepreneurial organization Endeavor has selected ten young companies to participate in the new season of the startup program Dare to Scale. The companies are Blueberry Software, Concrene, Coshera, Epix AI, Finbryte, Several Clouds, Shoot the Pimple, Teenovator, VEDA and Vola Software.

Venture capital

BrightCap

The second fund of the venture capital firm worth 60 million euro was launched this week. Of this, 44 million euro has already been raised and the rest will be raised over two years. Half of the money for the new fund comes from the Bulgarian (20 million euro) and Romanian (10 million euro) EU recovery plans, with the selection of fund teams managed by the European Investment Fund (EIF). With the public funds comes a condition that the money must be invested in companies that are linked to the two countries.

Energy:

The Bulgarian gas company is unable to continue to meet its financial commitments to Turkey's BOTAS gas operator under the current financial terms of the agreement. For this reason, the due payments for July have not been made, caretaker Minister of Energy Vladimir Malinov said on Thursday in Parliament, quoting a letter from the Bulgarian company to the Turkish partner. MPs asked questions about the contract with BOTAS, signed by the caretaker government of Galab Donev in early 2023. A parliamentary committee in the previous National Assembly found that Bulgargaz had undertaken to pay daily for capacity equivalent to nearly 500,000 USD, which was not being used.

Bulgargaz ep.2: seeks 400 million euros from Gazprom over suspended supplies

Earlier this week, the state-owned gas supplier announced it has filed a lawsuit against Russian company Gazprom Export before the Court of Arbitration at the International Chamber of Commerce in Paris. Bulgaria is seeking compensation of more than 400 million euros for damages incurred as a result of the unilateral suspension of natural gas supplies by Russia in April 2022 at the start of the Ukraine war. In May 2024, Bulgargaz sent an invitation to Gazprom Export for a voluntary settlement of the claim under the contract between the two companies. The Russian side has done nothing to resolve the issue out of court, Bulgargaz said.

Watch out for:

Petar Volgin

The newly elected Vazrazhdane MEP and former BNR host will become the spokesman of the newest, most radical group in the European Parliament - Europe of Sovereign Nations, which was launched earlier this week. According to Vazrazhdane's leader Kostadin Kostadinov, by the end of September the EP group would become the foundation for a European Sovereignist Party.

Ivelin Mihaylov

The now infamous leader of the so-called Historical Park group, which created Greatness party, has shot himself in the foot once more. Mihaylov, known for his long videos on YouTube discussing matters concerning the Park and politics, slamming everyone he disagrees with as "enemies of the Park", has managed to enrage his own deputies so much that they've created a special Parliamentary group to investigate the Park. Given the wide range of issues around Mihaylov, which Capital has been covering throughout the years (the thing is basically a Ponzi scheme, kept together by loans and new members of the cult), it's going to be a rough several months for him.

Place:

Dunav Most

For the first time since the construction of the facility more than half a century ago, the Danube Bridge near Ruse is being repaired on the Bulgarian side. The need for the repair works has become urgent because of the increasing problems along the route due to the outdated infrastructure and heavy traffic. However, the public procurement has been significantly delayed (by about 6 months, to be precise) and it started in the busiest summer period with heavy traffic not only from heavy goods vehicles but also cars with holidaymakers heading to the Bulgarian and Greek seaside. So bear this in mind if you plan to cross the bridge in the coming months!

Date:

12 July

Is the date on which offers for United Group will be made public. The holding company, owned by London-based BC Partners, controls the largest telecom-media group in Bulgaria: Vivacom and Nova TV. According to Capital sources, there are several candidates interested in the group, including the state-owned Saudi telecom STS, e& from the United Arab Emirates, the American fund Apollo, Hungarian 4iG, which is associated with Viktor Orban, the investment fund Warburg Pincus and the parent group of A1 Bulgaria, A1 Telekom Austria Group.

Institution

Delta Guard

The notorious security company, which became known for its role in the "forced appropriation" of an elevator company in the Eight Dwarfs scandal, struck again this week when it was discovered that a beach disco guard wearing its jacket broke the jaw of a young man on the Black Sea camp site Gradina. The case would have been buried, as per usual, if civil activist and vlogger Lyubomir Zhechev had not traced the guard online and found out that, when he's not on his part-time job of "protecting" discos, he's working as a full-time policeman.

Zen of the week:

Botev Plovdiv, which is the first club in Bulgaria (and they claim, the world) to accept bitcoin as payment, now has a fan section with slogans about the cryptocurrency, waving also a Bitcoin branded flag. We suppose love towards your club can come in many different forms, crypto being one of them.