At some point during the hearing of the Internal and Foreign Ministers in Parliament this week, some MPs became exasperated. "I did expect you to come with more data, reports from the secret services," admitted BSP deputy Borislav Gutzanov. The topic was Syria and how the fall of Assad's regime will affect Bulgaria.
It was a timely discussion: Syria is just one border removed from us, and the last turmoil there sent waves of refugees our way. With Bulgaria entering Schengen officially from January it should have been expected that the Bulgarian services and government work overtime to understand what's going on and be in constant consultation with Turkey (the new regional power it seems) and other partners. Nothing of the sort emerged from this hearing. Both ministers sounded more like administrative dolls, repeating the same talking points, rather than acting heads of government services.
It's just a sign of how irrelevant and downright dangerous this caretaker government has been for some time now (as if anyone needed more proof after the last election). Suffice to say that even the Prime Minister's Security Council hasn't been convened.
Yet nothing could be more telling than the budget filed this week in Parliament. The budget is supposed to be a pinnacle of statecraft, combining the efforts of the whole administration and pointing to where the state is heading. A good budget, a European diplomat once admitted, leaves everyone a bit dissatisfied.
But what the Ministry of Finance compiled and the government voted for is as far removed from that as possible. It tried to please everyone at once and the result is an absurd budget that reveals an alarming abdication from the business of running a state.
Let's start with expenditures. It plans to spend between 20-25% more, depending on whether you compare with the planned expenditures for this year or the actual numbers. This is a rise in expenditure not seen since the hyperinflation years of the 90s. Most of this is a rise in salaries for state employees, as well as pensions. There is a whopping 40% rise in capital expenditure, though it remains unclear where will that go.
All in all, the state is planning to redistribute around half of the country's GDP: way above any reasonable threshold.
But what's even more worrying is the way the MF tried to hide that: by inflating revenues. It plans for a between 20-30% rise in revenues, which is absurd in itself. But it gets weirder. The main tools for that, except a 7% increase in GDP, would be a tax amnesty and a new tax on mining. The latter already produced a nation-wide protest of mining workers on Wednesday. And as for the former, one detail is telling: the state plans to give 2 billion levs to the Bulgarian Development Bank so that it can lend to people and companies willing to pay their outstanding dues to the budget.
Since the whole account is made up and it's the year Bulgaria needs to enter the eurozone and the deficit needs to be kept under 3%, logically, the MF is using the only other available tool - borrowing. The debt-to-GDP ratio will also swell - from current levels of around 23% to almost 33% at the end of 2028.
It's obvious that the Finance Minister simply put together all the requests for money, compiled them in a spreadsheet, and then called the whole thing a "budget". The National Bank was the first to call it out as a charade. In a special release, it branded the budget unrealistic and urged against accepting it. Now it remains to be seen what this Parliament will do.
This newspaper is co-written by
@Martin Dimitrov, Monika Varbanova
POLITICS THIS WEEK
And speaking of Parliament: it finally starts workingThe impossible happened - MPs finally managed to agree on one thing and selected constitutional lawyer and university professor Natalia Kiselova from BSP as speaker of Parliament. With the 140 votes of her party, GERB, Ahmed Dogan's ARF and the combined group of WCC-DB deputies, who managed to find a compromise among themselves, parliament finally got unstuck.
Don't expect too much from it, though
On top of legislative work, the MPs could finally form parliamentary groups so that the President could start the process of cabinet negotiations. He invited GERB and WCC-DB first on Monday, and then most other parties on the following days, with one significant exception - mogul Delyan Peevski's MRF-New Beginning, which was not invited for consultations at all. Yet no sign of a workable coalition is on the horizon.
Peevski strikes back - through the prosecution
(Un)surprisingly, on the day when the news emerged of the President failing to invite Peevski for a meeting, the State Prosecution suddenly decided to ask for WCC's Kiril Petkov's parliamentary immunity in order to launch proceedings against him for the illegal arrest of then-opposition leader Boyko Borissov 2,5 years ago.
and the Anti-Corruption Commission
And if anyone had any doubts, the Anti-Corruption Commission also suddenly decided to send a message to the other leader of WCC - Assen Vassilev, through the arrest of his bodyguard on charges that he communicated with the ex-Customs Agency head Petya Bankova, who is prosecuted for protecting drug smuggling channels.
ECONOMY
Expect an overview of the largest procurement deals in waiting for next year in the last newsletter of the year - due next week. For now, suffice to say, the Road Agency is preparing a bid for 2.3 bln. levs.Figures:
-1.6%
The decline in industrial production in October compared to the same month of 2023. This is the 24th month, except for September of this year, in which this index plummets.
4,130 levs
The planned maximum social security income for next year - a 380 levs increase - is one of the controversial plans of the Financial Ministry.
BUSINESS
MiningAurubis Bulgaria
The mining giant's profit rose to 392 million levs for the 2023/2024 financial year, which ends at the end of September, according to the annual report of the German group Aurubis. The result is about 100 million levs higher than last year's, as in 2022/2023 the plant near Pirdop and Zlatitsa had a work stoppage for planned repairs and accordingly production was smaller.
Retail
HalfPrice
The well-known off-price brand will open its first store in Bulgaria on 13 December in the capital's Ring Mall. This is the 13th market in which the chain continues its expansion after successes in Central and Eastern Europe and Spain. The store in the Ring Mall in Sofia occupies an area of nearly 1,900 sqm and will provide around 40 jobs.
Startup
LogicStar AI
The Bulgarian Institute for Computer Science, Artificial Intelligence and Technology (INSAIT) and ETH Zurich are creating a new startup that develops fully autonomous agent-based artificial intelligence targeted at the needs of programmers. The firm is named LogicStar AI and has offices in Sofia and Zurich and offers developers a solution to help them maintain their software.
BRUSSELS
#Schengen - After the Ministers of Interior this week voted for lifting the controls between Bulgaria, Romania and the rest of the zone, it remains to be accepted by the Heads of State later this month. Bulgarians will travel without further control to Greece from 1st of January, while the (primarily) cargo traffic to Romania and Hungary will be subject to restrictions for at least another 6 months. Here is everything in detail.#"De minimis" - The European Commission has announced an amendment to the 'de minimis' Regulation for the agricultural sector, increasing the maximum aid per company from 25,000 euro to 50,000 euro over three years to address inflation and market changes. This revised regulation, effective three days post-publication and valid until December 31, 2032, also adjusts national caps for aid based on agricultural output, removes the previous sectorial cap limiting aid distribution, and introduces a mandatory central register to enhance transparency and reduce administrative burdens for farmers.
#EP's committees- Four new parliamentary committees will rise and shine in the European Parliament from this month. Two of them are upgrades, turning the junior health and defense committees into fully fledged ones. This clearly means those sectors will be of special importance during the mandate. The other two are brand new special committees that will draw up recommendations on interference in democracy and the housing crisis.
WATCH OUT FOR
PeopleYoan Zapryanov
Congratulations to our Capital colleague Yoan Zapryanov, who received the Anti-Corruption Fund's Red Line Award for his series of investigations on the so-called Historical Park near the village of Neofit Rilski. There, the founder of the Velichie party, Ivelin Mihailov, involved investors in strange investments, which Zapryanov revealed were a Ponzi scheme. Coincidentally, this week Mihaylov announced he will leave the management of the park. This is not even the last fraud Yoan exposed - in the last weeks, the shady battery "startup" BETL, appeared on his radar, which put a rather quick end to it. He is also the author of the most read text on K Insights ever - Inside Nexo.
Good job!
Vladislava Tsarigradska
The judge received the Person of the Year award of the Bulgarian Helsinki Committee for exposing dependencies in the judiciary, for her work in support of human rights and the rule of law. Judge Tsarigradska continues to talk about the pressure on judges and the way the prosecution failed to investigate the criminal scheme of the Martin "the Notary" Bozhanov group. Because of her public positions, she became the target of death threats to her and her family. Despite that, her security has been removed by order of the Minister of Justice Maria Pavlova since the beginning of November.
Andrey Guyrov
The Sofia Administrative Court dismissed as invalid the decision of The Anti-Corruption Agency to remove Guyrov as a deputy-governor of Bulgarian National Bank because of a delayed exit from 3 companies. The ACA, which is a tool for Delyan Peevski and Boyko Borissov, was used at the beginning of the year to stop Guyrov from being nominated as a caretaker Prime Minister.
Company
BETL
It transpired that more than 20,000 Bulgarian citizens have been part of the dubious scheme of recharging battery stations. The pyramid scheme went down last week and is taking millions of levs with it.
Location Novo Selo
A scheme, allegedly linked to the American military base in Novo Selo, could bankrupt the middleman family business - the Stara Zagora wholesaler Zara-E. Prosecutors, customs and the NRA announced that they had uncovered unpaid excise tax of almost 10 million levs and arrested the owner of the firm, but the scheme seems to include other Bulgarian and Swiss companies that have been in the chain for over 10 years, without the Customs Agency noticing anything
Date
21 July
On 9 December Fest Team, the company that organizes some of the biggest concerts in Bulgaria, confirmed that the Californian rock legends Guns N Roses will play in Sofia in the summer of 2025. This will be the American band's second concert on Bulgarian soil (after the one in 2012), but now Axl Rose and Duff McKagan will be joined by their former lead guitarist Saul Hudson (Slash). The exciting fan event will take place at Vasil Levski Stadium on July 21 next year.
At some point during the hearing of the Internal and Foreign Ministers in Parliament this week, some MPs became exasperated. "I did expect you to come with more data, reports from the secret services," admitted BSP deputy Borislav Gutzanov. The topic was Syria and how the fall of Assad's regime will affect Bulgaria.
It was a timely discussion: Syria is just one border removed from us, and the last turmoil there sent waves of refugees our way. With Bulgaria entering Schengen officially from January it should have been expected that the Bulgarian services and government work overtime to understand what's going on and be in constant consultation with Turkey (the new regional power it seems) and other partners. Nothing of the sort emerged from this hearing. Both ministers sounded more like administrative dolls, repeating the same talking points, rather than acting heads of government services.
