The week: Bulgaria's population is going to grow in 2025, There might be a government soon, Trading babies for grain

I'm telling you this story not to push you to go to Dobrich (though you might, if you feel like enjoying the vast planes of Dobrudzha). I actually want to draw your attention to a major trend, that is going to define next year and years after that. And it's also a good story to finish the year on.

Bulgaria's status is shifting from a net population loser to a net gainer. And this isn't just from third countries but also from within the EU. The numbers are telling-since the pandemic, the number of newcomers has consistently exceeded the number of those leaving, and this gap continues to grow (see the graph below).

In 2020, most of the newcomers to Bulgaria were Bulgarians, driven by the unique circumstances of the pandemic, resulting in a net migration gain of 30,000 people. However, by 2023, the situation has shifted significantly. Over 41,000 more people have moved to Bulgaria than left, with more than 70% of these newcomers being foreign nationals, and nearly 20% of them European Union citizens.

There are three main driving forces behind this trend. The first is the return of Bulgarians from abroad, a movement that began during the pandemic. The second is the growing demand for foreign labor, as companies struggle to fill job vacancies. The third factor is the conflicts in neighboring regions, pushing large groups of people to seek a new home.

At present, two of the three components of the demographic index-birth rate and migration-are on an upward trend. The total fertility rate (the average number of children per woman of childbearing age) has increased. According to the latest data from the National Statistical Institute, it now stands at 1.8, which puts us in the top 3 in the EU. This suggests that after a slight decline in 2022, the country is once again experiencing a steady increase in birth rates-a trend that has been ongoing for at least a decade. The negative trend remains deaths, especially preventable ones and there is much to do there.

If the trend continues-and there is no reason to believe otherwise-2025 will mark the first year since 1985 in which Bulgaria's population grows. It is difficult to overstate what a turning point this would be in Bulgaria's modern history.

For decades, the public discourse and societal mindset have been shaped by a melancholy over the loss of people. The sorrow of belonging to a place that is shrinking in sheer human terms has been the defining emotion for the entire region from the Black Sea to the Baltic. Writers like Georgi Gospodinov have created entire mental landscapes to capture this state of being. Two generations have grown up with the idea that this is a place you come from, not a place you go to.

Of course, the numbers next year won't immediately overturn this deeply ingrained perception. It runs too deep, too embedded in the national psyche. However, the change will be gradual and steady. Over time, it has the power to reshape the narrative and identity of a country (and a region).

So here's to optimism and the ability to cherish the good life, while and where we have it. We're wishing you a Merry Christmas and a lovely holiday season.

This newspaper is the last for 2024, we will be seeing you again in 2025. It is co-written, as usually by

@Martin Dimitrov, Monika Varbanova

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Politics this week:

The famed pro-Western leaders in Bulgaria's National Assembly and the executive once again showed their true colors. On Wednesday, caretaker PM Dimitar Glavchev (whose whole political career started in Boyko Borissov's party) surprisingly asked for a mandate from the parliament to sign an agreement on cooperation with Ukraine in the field of security and defence for the next 10 years, which has been in the works for over a year. GERB. however, surprisingly called on the caretaker PM to withdraw the agreement for the sake of forming a regular government.

A new government, you say?

These negotiations essentially consisted of a preliminary meeting between GERB and Democratic Bulgaria (DB), half of the WCC-DB coalition, which took place on 16 December in Parliament. The main topic of the meeting was the possibility of forming a broad parliamentary majority and a regular government with an "anti-corruption and pro-European profile" and without floating majorities in the National Assembly.

To conceive this, both parties would need BSP and TISP as backers. That notably leaves out DB's own coalition partners from WCC, which are currently under vicious attack from the State Prosecution. It now seems all but inevitable that the two parties from the liberal, pro-Western spectrum will go in separate directions.

New year, new chance

In any case, the possibility of forming a ragtag majority will not be probed until the start of 2025 at the earliest, as Borissov's party asked President Rumen Radev to delay issuing the first exploratory mandate so that negotiations could go on.

You lose, Zelensky

This means that since the socialists from BSP are heavily against helping Ukraine, such a document could hardly be supported right now. It was expected to be ratified during the EU Council in Brussels, where Ukrainian President Volodymyr Zelensky will also be present, but this clearly did not happen. "Today's chicanery with sending [the agreement] to the National Assembly, given that there was an agreed signing with President Zelensky tomorrow in Brussels, is shameful. This leaves Bulgaria, along with Hungary, as the only NATO country without such an agreement," wrote European Council on Foreign Relations vice-President Vessela Tcherneva in a statement.

Orban welcome!

Talking about the Hungarian PM the whole debacle unfolds on the eve of his visit to Bulgaria. At the start of the week, it transpired that he will visit Sofia at the invitation of President Rumen Radev (which is an unusual protocol) on 20 December. Officially announced topics for discussion are in the broad field of bilateral relations and the "security environment in the region."

Champagne and other types of gas

But there will likely be more to it than a "thank-you" for getting us into Schengen. The visit will take place on the day that US sanctions against Gazprombank come into force, affecting payments for Russian gas imports into Hungary, including fees for Bulgaria for the Turkish Stream transmission. As of 1 January 2025, this is the only pipeline for Russian gas to Europe, as Ukraine has not renewed the transit agreement expiring on 31 December.

ECONOMY:

Uncertainty and lack of predictability about the future are some of the conclusions of the traditional online survey of the Bulgarian Industrial Association (BIA) among 738 companies, conducted in the period 5 November - 6 December. "Only 15% of the respondents see an improvement in the business climate, while 24% of the participants report an improvement in the state of companies. There is minimal optimism among managers. The survey period is before the caretaker government submits the draft budget for 2025. If the survey had been done after the budget submission, optimism would have been even lower," said Dobri Mitrev from BIA. Understandably so.

Moratorium on electricity price hikes for households - again

The new electricity prices for households, which are supposed to be 8.99% higher from 1 January 2025, are a real nightmare for politicians and therefore the possible imposition of a moratorium, as happened a few years ago, is now on the table. The first such request is likely to come from the BSP, which proposed that the price moratorium should be in place until the end of March and include water bills alongside electricity. The possible imposition of such a measure is a populist decision, as electricity prices cannot and should not be artificially held down, because this will lead to the formation of new deficits in the energy sector. This will be paid for by taxpayers once again, but in a different way - for example, through billion-dollar subsidies for mines and thermal power stations.

Figures:

2,1%

Is the inflation in November - up from 1.8% in October underpinned by food and services getting more expensive, the National Bank estimated.

27%

Of Bulgarians have shopped online in the last three months, show an Eurostat survey. This compares with around 58% in the EU as a whole.

BUSINESS

Revolut

The online bank reported that it has reached 1 million customers in Bulgaria, positioning it as the most popular fintech platform in the country. Revolut has seen rapid growth in the market, with the number of customers doubling since October 2022 and the Bulgarian market ranking fourth in the CEE region.

Startup

LAM'ON

The Bulgarian producer of biodegradable packaging film received an investment of 500,000 euros to increase its sales after more than 6 years of R&D activities.

Cement

Titan Zlatna Panega

Scored a fabulous 2023 according to delayed data from the previous year. It tripled its profits to 8.4 million euro and 2024 promises to be yet another good year, as it is expected to have 8% growth.

ENERGY

The National Electricity Company (NEK) is making a third attempt to drive the repair of some of the key facilities of the Chaira Hydroelectric Pumping Station after the previous two failed due to the absence of bidders. On Wednesday, the company published a fresh tender for the repair of hydro units 1 and 4. The contract is worth now 242.5 million levs excluding VAT, which is 20 million more than September. The deadline for submitting documents is 17 February.

BRUSSELS

#TikTok - The European Commission has initiated formal proceedings against TikTok under the Digital Services Act (DSA), focusing on potential breaches related to election integrity during the recent Romanian presidential elections. The investigation will examine TikTok's risk assessment and mitigation strategies concerning election interference, particularly its recommender systems and policies on political advertisements. This is the third such investigation against the Chinese platform.

#Insurance - As extreme weather incidents increase in frequency, the European Central Bank proposed a two-pronged approach to increase insurance coverage for floods, storms and other disasters fueled by climate change. It includes a voluntary public-private reinsurance mechanism, and a mandatory EU fund to pay reconstruction costs. Meanwhile, the European Parliament has approved this week a new package of legislation that allows affected countries to benefit from a 95% co-financing rate for various recovery measures after natural disasters, including infrastructure repair and social support.

Watch out for:

Borislav Sarafov

The current head of the Prosecution and hopeful to be elected as permanent, has taken on Parliament with all guns blazing, requesting 6 MP's immunities at once. This might prove to be a bit too much, however, and will probably incur a backlash and even derail his candidacy.

Anina Santova

Our dear K Insights contributor and Capital weekly writer was awarded one of the big prizes in the Valya Krushkina investigative journalism award (alongside our colleague Yoan Zapryanov, which we mentioned last week over another award) for her investigations related to the construction of a private parking lot near the border with Romania in Ruse. Read the story here. And - congratulations for the great work, Anina!

Krasimir Papukchiisky

The old hat in the national railway infrastructure company is bound to be a director again, or so we hear. In the newly announced competition for the position, there are only 3 candidates, all previous directors. Papukchiisky left under a huge shadow due to conflict of interests but was then returned to the Ministry by the caretaker cabinet. The company has an ongoing European prosecution investigation for siphoning of money.

Krisko

The rap-star and music producer talked about his son having Down Syndrome and how that changed his life. He has launched a campaign to collect funds to build "the largest center for rehabilitation for kids with special needs on the Balkans". A worthy cause indeed.

Institution

Ministries of Health and Education

Hard to find a more insane way of running a state: hurting thousands of wanna-be parents and scientists in order to compensate a handful of grain oligarchs for not having met their sales targets.Date

1 January

You can go to Greece withouth border checks now (and probably to Romania also, if that's your preference).

Happy Holidays!