The week: Dispatches from the frontlines of the heat war

The fires are still predominantly in the South, with one approaching even Stara Zagora - one of the biggest cities. Firefighters, soldiers, volunteers and rescue teams - including at least four Czech and Turkish helicopters, alongside the Bulgarian ones, joined hands to combat the disaster, triggered by the horrendous heat.

No one's safe. The heatwave has now reached its tenth consecutive day, with temperatures soaring above 40 degrees in several regions. Red alert for dangerously hot conditions is in effect across nearly the entire country, according to data from the National Institute of Meteorology and Hydrology (NIMH).

This is a wake-up call. For a very long time, Bulgaria basked in a moderate climate with very few extremes. No more. Hot days have increased by 10% per decade in Southeast Europe, and even the Scandinavian Peninsula, since 1960. This is only going to accelerate.

Heatwaves are going to be here for a long time. So we need to be better prepared.

Last year, Bulgaria launched the National Climate Warning System (bg-alert.bg) to notify the public about dangerous weather conditions. However, it has yet to issue warnings specifically for extreme heat. Residents of Voden received no warning about the coming wildfire. Authorities say it was too hard to predict. Was it, really?

We need to do better. People are going to die. Not only in fires. Contrary to popular belief, people do not adapt to heatwaves over time. In fact, the effects of extreme heat become more severe and dangerous after the third day.

In 2022, a significant portion of climate-related deaths in the EU were attributed to heatwaves, far surpassing incidents related to cold weather or floods. Cities and local authorities are going to be the first line of defense. Save for places like Burgas, which just created its first climate division, almost no one here thinks about that. One thing I can suggest is joining your local volunteer corps. You might as well be prepared.

This newsletter is helped by:

Martin Dimitrov and Monika Varbanova

1. Politics this week:

As expected, on Thursday the WCC-DB parliamentary group announced it will ask President Radev to receive the second exploratory mandate to form a cabinet as soon as possible - and return it unfulfilled immediately. This means that Bulgaria has inched a step closer to its seventh early vote in three years.

The anti-Peevski front failed

The reformists attempted a creative (albeit questionably constitutional) move before they gave up, proposing to all parties in parliament to back an "anti-corruption declaration" and ask the President to postpone giving them the mandate for three months while they pass several anti-graft laws with everyone in Parliament. Of course, they found no support for this and decided to back down.

Now all that's left is the third mandate, but chances are slim that a new grand coalition might pop out from anywhere in a parliament that is extra fragmented, even by the low standards of the Bulgarian National Assembly.

Also - the constitutional changes are good but might be ruled out

The European Commission likes the changes in the Constitution, yet they will probably be ruled unconstitutional by the Constitutional Court. That's what Capital Weekly forecasts, after speaking to sources.

2. Economy:

After peaking at 18.7% in September 2022, the country's inflation rate began to fall and reached 2.3% in May this year. In June, however, the statistics reported a slight increase in the indicator to 2.5% year-on-year. The main reason is the prices of services, restaurants, alcohol and cigarettes. Measured through the EU-comparable harmonized index (HICP), the indicator rose by 0.1 pp to 2.8%. At the same time, inflation in the euro area continues to fall, with preliminary Eurostat data for June showing it at 2.5%. It is exactly the price criterion for euro area membership, which compares 12-month HICP data against those of the three EU countries with the lowest inflation that Bulgaria still does not meet. This is expected to happen later in the year. In fact, the calculations based on the methodology used in the convergence reports show that the country is still getting closer to the Maastricht criterion for price stability and if in May it exceeded it by almost 2 percentage points, now the difference is about 1.63 points.

DSK technical issue leaves clients paying twice

A technical error in DSK bank's system resulted in transactions made over the last few days being duplicated. Thus, the accounts of the bank's customers who made payments ended up with smaller balances. Additionally, clients also complained of ATMs not accounting for deposits made on Monday. Many customers might have missed the issue entirely, but those making larger transfers or those with small amounts may even end up with negative balances. DSK confirmed the "technical inaccuracy after processing card transactions" with a terse message on its website, but said the issue is not serious or caused by a data breach and will be fixed quickly.

Figure:

The minimum sum required for sustenance of a single person per month according to the Institute for Social and Trade Union Studies of the KNSB trade union.

3. Business:

The hotel and holiday property management company has raised 800,000 euro in financing from the Bulgarian Development Bank's (BDB) Capital Investment Fund. This is the second round of funding for the company, which also includes the existing investor Vitosha Venture Partners with an additional 200,000 euro.

M&A

The majority share (82%) of the largest Bulgarian real estate technology (proptech) start-up, Flat Manager, has been acquired by the Polish leader in short-term rental management Renters.pl, the two companies announced this week, not specifying the price of the deal.

Manufacturing

The cable plant in Pleven, which employs 1,300 people, announced it will be gradually phasing out its production on account of difficulties in "reliably recruiting sufficient staff" and the uncertainties of the global auto-market.

4. Brussels:

#Clean Deal - Von der Leyen's team tireless efforts have succeeded, as she has secured strong support, including from the Greens, for a second term in office. Her speech centered on a "Clean Industrial Deal", which she wants to launch in the first 100 days of her term of office. However, despite all the talk of less bureaucracy for the economy, there will be many new regulations. Nevertheless, despite the majority backing, the party of Italian Prime Minister Giorgia Meloni voted against it.

#Metsola rocks - It is safe to say that Roberta Metsola is the most popular woman in Brussels after serving a second 2.5-year term as President of Parliament. The 45-year-old Maltese MEP from the European People's Party received the support of 562 MEPs (the strongest backing in the history of the EP when electing its President).

#Next BG Commissioner - Sources reveal the caretaker government of Dimitar Glavchev will choose from four names - Eva Maydell, Andrey Novakov, Rosen Zhelyazkov and Mariya Gabriel.

#Support for Ukraine - The Parliament has adopted a resolution calling on the EU to do everything necessary to help Ukraine defeat Russia. MEPs warned of serious consequences if this does not happen. The text emphasises the urgent need for a stable legal regime that would allow the seizure of Russian state funds frozen by the European Union and their use for the reconstruction of Ukraine and the compensation of victims of the war. A tricky point is that Elena Yoncheva (former S&D member and now ALDE, who several years ago was calling for peace and a ceasefire) voted "in-favor"- how priorities change!

5. Energy:

The heatwave, which has persisted for a second week now, has literally set the energy market on fire. Since the beginning of July, electricity exchange prices are at their highest level in 18 months, coal-fired power plants (TPPs) are running as if it is the middle of winter and Bulgaria is exporting huge amounts of electricity to the region. It is the prices reaching 1 lev 500/MWh in the evening hours, as well as the demand both from the Balkan neighbors and domestically that made the otherwise uncompetitive energy from coal TPPs lucrative once again. In real terms, electricity consumption on hot days is not so different from that during much of last winter.

Specifically, for 17 July the base load exchange price topped 440 levs per MWh, which has not happened since the winter of 2022-2023. This is enough for the coal-fired power plants to operate at a profit. For several months their capacities were almost unusable, except for Maritsa-East 2 TPP, which operates with emergency orders for the regulated market. But now the situation is different and even the closed ContourGlobal Maritsa-East 3 has reignited one of its units.

6. Watch out for:

The board of the Bulgarian National Bank (BNB) decided that the sub-governor of the Bulgarian National Bank (BNB) and former WCC politician can be removed from office because of undeclared stakes in a private enterprise, which has been discovered by the Anti-corruption Commission. Still, the final decision for this would have to be made by Parliament, the board of directors said, and also Gyurov can challenge the anti-graft body's decision in court - which he's already doing.

Date:

The date President Rumen Radev said he will issue the second exploratory mandate to WCC-DB. Since the reformists have already said they will return it immediately, we are a week closer to the next election.

Institution:

The coffee break can be a very illuminating time, as proven again by President Rumen Radev, who found interesting company in the UK where the European political community was meeting. Radev jumped on a table with Viktor Orbán, Azerbaijan's Ilham Aliyev, Serbia's Alexander Vucic, and Albania's Edi Rama.