Don't expect cosmodromes, said Tomislav Donchev, the deputy prime minister back in 2021 when presenting the revised version of the Recovery and Resilience plan. We didn't, to be honest. Given the low innovative ability of the Bulgarian state back in Boyko Borissov's times, it was hard to imagine something grandiose coming out of those 6 bln. euros we were about to get.
It was even harder, however, to conceive of the derisory delivering capacity of the state. After stumbling to fit into deadlines and trying to squeeze everything into The Plan, the governments and the Parliaments in the last 3 years finally managed to get some spending on track. Bulgaria has spent around half a billion euros to date, of which one tenth went on the Sofia subway and half on industrial innovation. The easiest projects of them all - the retrofitting of the residential blocks - hasn't even started. We have 2 years to finish everything, with 95% of the money still to be contracted and with almost 80% still to be received from Brussels.
If that was an ordinary European program, there would be no worry. We would have shifted some money from one pocket to another, played with deadlines, bullshitted Brussels once or twice and spent everything on fixed procurement deals.
Yet it isn't.
This one requires goals and benchmarks, bolted into an agreement and rigorously checked. Bulgaria is currently failing 3 out of the benchmarks needed to get the second payment. This Thursday what remains of the Bulgarian Parliament dissolved into mockery over the needed energy reforms and there is no obvious majority for passing any of the rest.
All in all, it seems as if Bulgaria is en route to fail the RRP. Ask almost any politician these days and he'll tell you that is the most probable outcome. Which is telling.
Because it doesn't have to happen. Most of the countries are falling behind schedule with payments. Many are struggling with delivering reforms. But there is at least the desire to better oneself in order to achieve better results. No one throws away a financial injection of billions of euros just like that.
I met the Romanian official responsible for part of their RRP (especially municipal projects and energy efficiency) and he told me how they try to follow simple rules and simplify the procedures to the maximum. "We're going to get 3000 km of bike lanes outside of the cities by the end of this year," he said. Wait, that's a lot, I noted. Well, this isn't really rocket science, he responded. And that's true.
We're not getting cosmodromes but we're not asking for them, either. Not even being able to follow through on commitments and leaving out thousands of residents and companies to hang out to dry just might be the biggest legacy of the "recovery".
1. Politics this week:
First poll for the new elections: more is less An increasingly fragmented parliament, and one less and less governable. At least this is what the first poll published by Alpha Research on Thursday shows. The results indicate that the next National Assembly will host at least seven - and possibly as many as nine - parties and coalitions following the October 27 early elections.The elections are expected to break the anti-record for voter turnout, which is now predicted to be 30-31% (keeping in mind that pollsters frequently overestimate the number). This implies that every single party is likely to lose voters in absolute terms.
The top 3
The only electorate that is not flailing is GERB's. They will remain dominant with 24% of the vote, but will still be unable to muster a majority without a very complicated - and likely impossible to manage - coalition.WCC-DB and the pro-Russian Vazrazhdane are expected to tie for second place with slightly more than 14% of the vote each. Since none of the parties seems to want to work with the other two, that is a dead end.
Dogan-Peevski tie
The most interesting battle would likely be between the two MRFs - the Dogan loyalists, which will run as the Alliance for Rights and Freedoms (ARF), which is expected to secure 7.2% of the vote versus the Peevski MRF, which is expected to win 6.1%. The potential cooperation of the other parties with any of the two factions would definitely be put under scrutiny. You have to take into account that neither has name recognition or a viable campaign for now.
Some rockets will arrive
The State Department approved the sale of Javelin FGM-148F for 114 mln.dollars to Bulgaria this week. We had requested them on the 8th of August and seems like this is one deal we can close by the end of the year.
2. Economy:
EBRD lowers its growth forecast for BulgariaThe European Bank for Reconstruction and Development (EBRD) lowered its forecast for the growth of the Bulgarian economy in the next two years. The expected slowdown for 2024 is 0.4% - from 2.6% in May to 2.2% now, while the analysis for the coming year is now 2.9% instead of the 3% that was forecasted in the spring. For the whole SEE region, expectations have been revised down, with growth slowing from 2% in 2023 to 1.9% this year (-0.9% adjustment) before accelerating to 2.6% next year (-0.5%). The downward trend for 2024 is due to weak industrial production and weaker demand for outsourcing services according to the bank.
Every 3 months
The VAT registered companies will have to present their assets to the tax authorities every 3 months, if the new regulation, proposed by the Finance Ministry passes in Parliament.
Figures:
15.4%Is the growth in employers' expenditures for labor in the second quarter of 2024.
2.5%
of the GDP goes towards the police, shows an analysis of the Institute for Market Economy. This is the biggest share in the EU, especially given that 88% of employees of the Ministry of Interior are not, technically speaking, policemen.
3. Business:
TelecomsBrussels allowed e& from Abu Dhabi to acquire the telecom, in a 2.15 bln euro deal. This decision will open up the path towards other investments of the Arabian group in the region - including United Group, the owner of Vivacom and Nova TV.
Defense
Samel-90The Samokov-based military production manufacturer announced it has successfully launched one type of unmanned aerial vehicle (UAV) and has a second type in the works. The first - Samjet - is ready for the market and has primarily military applications. The latter is oriented towards intelligence, naval and civilian objectives.
Capital funds
Elana Fund ManagementOn Wednesday the fund announced it is launching a new mutual fund on October 1 that will invest in real estate companies around the world by purchasing shares in Real Estate Investment Trusts (REITs) as well as other real estate companies trading on global exchanges.
Manufacturing
SARK BulgariaThe Shumen-based copper wire firm announced that it has selected the leading company in the field of industrial construction Castello Pricast Ltd as the main contractor for a key project to expand the production capacity of its facilities with an investment of 12 million euro, which will create more than 50 new jobs in the region.
4. Brussels:
#Eggs: Bulgaria requested a ban on Ukrainian egg imports, since the local Association of Egg Producers claims it now comprises more than 10% of the entire market and is pushing the prices down. This is a curious claim, since no consumer has noticed the prices falling.
#Farmers: The Commission proposed to allocate 119,7 million euro from the agricultural reserve to directly support farmers from Bulgaria, Germany, Estonia, Italy and Romania who have been impacted by exceptional adverse climatic events in spring and early summer. The Commission proposed to allocate 10,9 million euro to Bulgaria, 46,5 million euro to Germany, 3,3 million euro to Estonia, 37,4 million euro to Italy and 21,6 million euro to Romania.
#Tariffs: The EU could vote to impose definitive tariffs on Chinese-made electric vehicles in the coming days, but even then the EU and China will continue negotiations to find an alternative solution. A provision will be added to the bill, which is expected to be voted on in early October, to allow talks to continue.
#Google: might face a fine of up to 10% of its global turnover and a request to change its business model if it does not give more prominence to competitors in its search, sources from the Commission reveal. The EU is preparing to take action under its Digital Markets Act. At issue is the way the company displays the results of rival products in its services such as Google Flights and Google Hotels.
5. Watch out for:
Person: Boiko KachulevThe owner of the brand-new Emporium Hotel in Plovdiv and TorroGrande restaurant is just one of the many names in the brand-new list of Mr. Peevski's party for the elections. The entire list is a who's who of local power-brokers. Here is a breakdown of the most interesting people in it (in Bulgarian)
Institution:
Sofia MunicipalityDid you like our Gradolyubiteli (City Lovers) challenge that created opportunities for local initiatives to contribute to the development of solutions for their municipalities? Well, it seems that Sofia Municipality did. Last week, it announced it will allocate 5.3 million levs for civic projects, which will be selected through online voting by the residents. The deadline for applications is 30 October and if you have any great ideas you can apply for funding here.
Dates:
1 OctoberWhere the team of dr. Ludmil Vagalinsky keeps finding new statues in the old draining system of Heraclea Sintica. After the big discovery of a 2-meters tall statue of a local strongman, though wrongly to be of Hermes, now they found yet another of those. Seems like the locals have been burying those underground, either after the arrival of Christianity or to save them.
Don't expect cosmodromes, said Tomislav Donchev, the deputy prime minister back in 2021 when presenting the revised version of the Recovery and Resilience plan. We didn't, to be honest. Given the low innovative ability of the Bulgarian state back in Boyko Borissov's times, it was hard to imagine something grandiose coming out of those 6 bln. euros we were about to get.
It was even harder, however, to conceive of the derisory delivering capacity of the state. After stumbling to fit into deadlines and trying to squeeze everything into The Plan, the governments and the Parliaments in the last 3 years finally managed to get some spending on track. Bulgaria has spent around half a billion euros to date, of which one tenth went on the Sofia subway and half on industrial innovation. The easiest projects of them all - the retrofitting of the residential blocks - hasn't even started. We have 2 years to finish everything, with 95% of the money still to be contracted and with almost 80% still to be received from Brussels.
