The week: Water under the mountain

This week marked a second failed attempt at selecting a company to repair the damage. No company has submitted documents for participation in the public procurement for 220 million levs (110 mln euro). It might be that all the big companies are doing projects like that all over the world and no capacity is available. It might be something else.

So here's where we stand.

We had two huge energy gifts from socialism - the nuclear power plant and Chaira. One keeps the energy system going, the other can virtually balance the energy supply of the whole region - neighboring countries included. We've neglected it, failed its repair and possibly made it impossible to rebuild. At present, we're losing tens of millions each day because of that.

Ironically, Bulgaria sent engineers to Japan when Toshiba was building the plant, in order to learn and be able to repair & maintain it and build more. Neither seems to have happened. And now we're on the lookout for capacity, water and lower energy prices.

This newsletter is helped by:

Martin Dimitrov

1. Politics this week:

We're either in or we're not. I know, this reminds you a lot of last year. It's again Austria's call. This Friday in Budapest the ministers from Romania, Bulgaria and Austria should finally put to rest our full entry into Schengen. Signs are, they probably will.

Read the Tarot

Yet, no one really knows for sure. Austria might back out at the last moment. The Netherlands might decide to vote again and this time say no. It's really more of a poker game at present, and unfortunately, sitting on our side of the table is.

Peevski's cabinet

If you ever wondered (and I'm pretty sure you haven't) who runs the country these days, this week gave an ultimate answer. In the space of just several days, the new party of corruption mogul Delyan Peevski received two presents from Dimitar Glavchev's cabinet. It got a huge new HQ in the center of Sofia, throwing out several administrative units. Then virtually all small municipalities, where his party got a huge boost, received around 60 mln.levs directly from the state budget. A gift like that hasn't happened in 4 years, making it impossible to explain otherwise.

Which gives you the answer as to why the new Parliament is stuck

From what is obvious, the largest party - GERB - plays the role of Peevski's plug. Meaning, it has plugged any options for changing Glavchev. GERB's huge concern at the moment, it seems, is not whether there will be a cabinet, a budget, a coalition or new elections. Borissov's biggest fear is that the current caretaker cabinet might be replaced by someone else.

Ruling from the shadows

In this way, both Borissov and Peevski got a fantastic deal: the status quo is kept in power without requiring either of the two to formally take over power. And since Parliament can't work out a majority for even electing a new Speaker, this damned cycle of elections-plug-elections will keep going until there's no one believing in democracy anymore.

WCC-DB's fault

The faction that is supposed to represent common sense and an alternative to the above - WCC-DB - seems to be the first victim of this cycle. For the past two weeks they've demanded the new speaker of the 51st Parliament be a non-GERB person. Then they did the only available thing - agreed to back another party's nominee, to get a majority. And then half of their MPs - mostly from Democratic Bulgaria faction - failed to provide the 20 votes needed for Kirilov's nomination to pass.

So here we are

Back where we started 4 years ago, frankly. Only this time more tired so any popular support for protests have fizzled out. Which, I suppose, was the idea all along.

2. Economy:

On November 20, taxi drivers protested in major cities across the country, blocking major boulevards and, for a time, the Trakia highway. Discontent in the industry came from higher prices for the compulsory third party liability policy - without much specificity, jumps of 3 to 15 times are quoted for different insurance companies. The taxi drivers warned the public that this might result in increased prices for transport services as well as potential suffocation of the sector. Although in theory the insurance sector is shielded from state interventions in the prices, in practice political parties notified the Competition Commission of a possible cartel.

Tax Amnesty on the horizon?

The Finance Minister has abandoned the idea of raising social security contributions and proposed a partial tax amnesty for next year. The idea is to give individuals a one-off opportunity to declare previously undeclared income, which will be taxed at a one-off rate of 15 or 20%. The excise tax on cigarettes will probably increase more sharply, and VAT for restaurants will again become 20%. Minister Lyudmila Petkova is yet to present a budget to the non-functional Parliament.

Figure:

The sum made available under the Regional Development EU program for 40 municipalities that are interested in investing into integrated urban development programs with their projects. The deadline is 11 February 2025.

3. Business:

The group, which owns Vivacom, Nova TV and Bulsatcom, has acquired another Bulgarian business - the online TV provider Elemental.TV, through its Cypriot company EON TV International. The telecom giant told Capital that the acquisition was aimed at developing the company's direct online services. The price of the deal is unknown.

Cloud services

The Bulgarian company for the implementation and operation of cloud services has raised 2 million euro from the local venture capital fund Eleven that will be used to enter the Greek market.

AI

The Bulgarian Institute for Computer Science and Artificial Intelligence (INSAIT) presented the latest version of its generative language model BgGPT. The institute announced that three new models are being released - a 27-billion-parameter model (BgGPT 27B), a 9-billion-parameter model (BgGPT 9B) and a small 2.6-billion-parameter model (BgGPT 2.6B) specifically for the Bulgarian language.

4. Energy:

The Bulgarian Energy Holding (BEH) ended the half-year with a drop in profit of about 60%. The company reported a net profit of 370.9 million levs compared to 865.8 million levs for the same period of 2023, according to the company's financial statement published on Thursday. Operating income fell 40% to 375 million levs from 631 million levs a year earlier. They were formed from dividends, provision of services to the group's subsidiaries, as well as interest income on loans. The main reason for this fall in BEH's profit is the decrease in dividend income as well as the decrease in impairment charges.

In recent years, the holding company has played the role of a major creditor for many of the state-owned energy mastodons that would have gone bankrupt without such assistance. To a large extent, this is one of the reasons for the state's refusal to restructure the company, as it can buffer between profitable and loss-making state-owned companies without being considered state aid and coming under European Commission sanctions.

5. Watch out for:

The unsuccessful rotational PM from GERB is now also an unsuccessful candidate to be deputy head of NATO, as the new Secretary General of the Alliance Mark Rutte selected former Macedonian Defense Minister Radmila Shekerinska for the post instead of her. As soon as Shekerinska's position was announced, Gabriel got a consolation post at the head of the organization that trains the staff of the European People's Party (EPP) - the Robert Schuman Foundation.

Apostol Apostolov

Long-time mayor of Simitli - one of GERB's most enduring strongholds, saw a surprising and abrupt mass protest. The nominal reason was a local businessowner's grievances but more than 700 people participated in the event, suggesting long-held animosity towards the mayor.

Place:

Before the start of the ski season, go down to the resort town to enjoy one of Bulgaria's longest running film festivals dedicated to extreme sports - Bansko Film Festival. It will take place between 20 and 24 November and guests will include ski mountaineer Andrzej Bargiel, who skied down from K2, explorer and cameraman Alessandro Beltrame, mountain guide and mountain farmer Peter Moser and rower Stefan Ivanov who crossed the Arctic Ocean with his son by boat. Free entry!

Compnay:

Leonardo