Every revolution eventually runs out of steam. At some point during the 10 years of French revolution, says Dominic Sandbrook in his wonderful The Rest is History podcast, everyone became constantly exhausted. This probably helps to explain why certain decisions were taken. So my bet is that after 4 years of revolution against Borissov's rule, which included a year of mass protests to remove him from office, 8 consecutive elections, 2 elected governments and 4 caretaker ones, and endless debates in God knows how many parliaments, people are just resigned to his return..
And back he is. This week a government with GERB in charge and two smaller parties in tow - socialist BSP and populist TISP - was voted in, marking the full return of Boyko Borissov to power and the end of the 4-year revolution. Not everything is quite the same, of course: he is still unacceptable as the face at the helm, and is not the one leading the government. His long-time aide and one time secretary Rosen Zheliazkov is, but the cabinet is full of faces from his previous 3 governments, cementing the fact that things have reverted to where they were.
So how stable is this new coalition? Given that both of the smaller parties stepped over their own red line of not working with GERB, it's a "Ride or Die" for them. They will eventually be eaten alive by Borissov, as happened with every one of his political allies. So they will consume as much power as they can, before that happens. There is a fourth, silent partner - the ex MRF leader Ahmed Dogan, who backed Borissov in return for guarantees that his former paduan Delyan Peevski would stop his onslaught on him. This is the most problematic part for GERB, if you ask me, as there can be no guarantee of what Peevski will do.
But if the previous 3 Borissov cabinets are any guide, here's what to look out for.
- They will try to close the deal on the eurozone as fast as possible, as it's an easy win.
- EU-US will be the geopolitical north to which the needle will turn, yet Trump's return means Borissov will be actively looking to position himself as a good partner to the new American administration. He needs foreign validation more than ever and the crumbling Franco-German duo will not be enough.
- Big infrastructure projects, especially the North-South corridors, are going to get a boost. GERB and Peevski basically control the large construction sector and there is a ton of money waiting to be procured. Under the guise of "NATO needs", the old model of large scale corruption is ready to be restored.
- Reforms needed to unlock the Recovery and Resilience plan funding will be voted through Parliament (yet tweaked just enough to not make much sense).
- New regulators are going to be voted in, replacing almost 100 people with expired mandates, locking in the power to rule over the economy for another decade.
- Social spending, together with municipal investment, will continue to rise, to satisfy both socialist partners and local businesses.
Now, all of this depends on the longevity of this government and as you can see - counts the big dark power-broker Peevski in. I might be wrong on this assumption. Yet recent history taught me that what you feel to be most likely is probably true.
Either way, we're in for a fourth run of Borissov. And we're about to see how tired people really are of the last 4 years.
Politics this week:
The sacrificial lamb gets slaughtered
Every new beginning needs a sacrifice. Since Borissov needed a gesture for his new partners (and ex-partners from Democratic Bulgaria) to show his magnanimity, he served them the head of the current acting Prosecutor General - Borislav Sarafov. On Wednesday, Parliament ruled that he cannot be elected as regular head of the Prosecution, but he can remain as Acting Prosecutor for another 6 months - the new maximum term for Acting Prosecutors at the top of the judiciary.
When there is a will, there is a way
This happened through changes to the Judiciary Law, which also stated that the current Supreme Judicial Council (SJC), whose members have expired terms, cannot hold elections for Prosecutor General and heads of the Supreme Courts. Something Borissov months ago rejected as unconstitutional. The following day the SJC demonstrated where its allegiance lay, by accepting to withhold the vote.
The former president of the Supreme Administrative Court, Georgi Cholakov, who was also appointed acting president after the end of his term, has six more months as acting president, which means that his successor would be elected by the new SJC.
The sole thorn in the foot: the European prosecution
While nothing around here can obviously trouble Borissov and the new government, Brussels poses a slight problem. The European Prosecution Service (EPPO) is out of control and gathering speed. It hit a new milestone this week with the indictment of two prominent faces from the public and the private sector: the ex-director of the National Railway Company (NRC) Krassimir Papukchiski, and the manager of the construction company GP Group Stefan Totev.
Two other people - managers of an Italian company, were also charged, for submitting false documents in the application procedure for a contract for 185 million levs for the modernization of the line Burgas - Plovdiv, financed entirely with EU funds.
Why is it important?
That is the second case brought against the NRC by the EPPO. The company was a black box of corruption in the previous decade and wasted a ton of money on bad procurement and delayed projects. Papukchiyski, who allegedly signed a contract despite knowing the information in it was false, was seen as a favorite in the race to head the NRC again. He is a former interim deputy minister of transport. GP Group was seen as a Borissov darling back in 2016-2018 and holds a trove of secrets. Admittedly, it all depends on the willingness of people to speak.
Economy:
Inflation: 0.1% away from the euro targetInflation data in Bulgaria in December show a marginal acceleration - the harmonized consumer price index rises from 2 to 2.1%. But the key point is that with these levels - and thanks to the contraction of the index over the year - the country is now a hair's breadth away from meeting all the Maastricht criteria for eurozone entry. The calculations based on the methodology used by the European Commission and the European Central Bank show that Bulgaria is only 0.15 points away from the target.
So next month, we're good to go
In January, Bulgaria will certainly meet all four numerical criteria for the euro area and without using exceptions. This gives it the right to ask for exceptional assessments from its European partners and to get a "yes" from all stakeholders by springtime. Probably as early as next week, the new government will first informally probe the mood in Brussels and Frankfurt and then formally request new convergence reports. If they are positive, the European Council will formally approve Bulgaria's eurozone accession, probably in the spring of this year. This would make it possible for the country to become the 21st member of the euro area as early as 1 January 2026.
Figure:
-3.2%
The decrease in the exports of goods from Bulgaria for November 2024 compared to a year earlier, mostly driven by a decline in the sales of wheat and other food, oil, machinery and equipment.
50 000
New cars were sold last year, which is the second highest since 2008. This is a 16% growth on a yearly basis. The old cars are growing too - with more than 250 000 imported last year. The ratio of new to old is ⅕ which is twice better than ten years ago.
BUSINESS
ManufacturingTri-Wall Group
The Japanese company announced it will launch a corrugated board and packaging plant near Plovdiv that will be ready in mid-2026. The investment is valued at 70 million levs.
M&A
Codery
Bulgarian software company Codery has bought 100% of the shares of its peer Devision in the first acquisition deal for the local IT sector in 2025. The deal was funded through the Silverline fund's investment in Codery in 2024.
Education
EIT
The European Institute of Innovation and Technology (EIT) announced it will launch an innovation centre in Sofia and in 15 other cities in Central, Eastern and Southern Europe to reduce the regional innovation divide in Europe. In Bulgaria, the hubs will be based in EIT's partner organizations Cleantech Bulgaria and Junior Achievement Bulgaria.
IPO
Green Innovation
The company behind the Hydrogenera brand is planning to make an IPO on the Bulgarian Stock Exchange according to Capital weekly sources. If all the shares of the firm are subscribed at the price of 11.85 levs, as the latest transactions with its securities are, the company will raise nearly 6 million levs and achieve a market valuation of 54 million levs.
ENERGY
Who is left in the Lukoil's buyers shortlist?The latest sanctions against the Russian energy sector by the administration of outgoing US President Joe Biden caught Lukoil at an important moment in the process of selling its assets in Bulgaria. Many of the candidates began to emerge in early November. The process is at the stage of negotiations with the most convincing bidders, with the outcome still to come. Likely to be further ahead in the race are Azerbaijan's SOCAR and the highly motivated Hungarian MOL, which PM Viktor Orban has openly lobbied for. Less likely is a bid by Kazakhstan's KazMunayGas, backed by trader Vitol, which is also likely to participate independently. There are also Turkish contenders - Cengiz, a holding company with interests in construction and energy, and Oyak, a pension fund. In all likelihood, there will also be a bid from the US.
2024 was one of the weakest years for Bulgaria's energy sector
The continued decline in electricity generation, mostly due to coal power plants, record low electricity exports, a slight increase in consumption and a boom in solar power. This, in a nutshell, is how 2024 can be summed up for the Bulgarian energy sector. According to data from the Electricity System Operator (ESO), the country produced 5% less electricity during the year, with the decline actually in base load plants, mostly coal-fired thermal power plants, while renewables saw growth. For the first time in several years there was also an increase in domestic electricity consumption - by 900,000 MWh, or 1%. The growth can be explained primarily by consumption and households, with more people switching from solid fuel, gas and heating to electricity - with air conditioners and heat pumps - despite the generally warm year. Read more on KInsights next week.
Watch out for:
People:Patrick Fragman
I sat down with the current CEO of Westinghouse to speak about Kozloduy and their new mega project there, about the moon reactors and mobile nuclear powerplants. It's been a fascinating talk and you will read it in K Insights next week. Meanwhile, it turned out Fragman is departing.
The company said that Fragman intends to spend more time in Europe with his family, but would "continue to support Westinghouse for a few more months after March 31 to facilitate the handover to the new CEO". Seems like I got him on his last days as CEO, so maybe he was more frank. Look forward to the interview.
Dimitar Glavchev
The ex caretaker PM now needs to head back to his previous position as the head of the Auditors Office. However, there is a conflict of interests there: he will be checking on his own work as a PM. So Glavchev might just turn out to be jobless.
Company
Lochkeed Martin
The US defense manufacturer has more work in the pipeline coming from Bulgaria, as in one of its last decisions the caretaker government of Dimitar Glavchev finally approved a proposal to ratify a contract with the US for the acquisition of Javelin FGM-148F anti-tank missiles for the army. These are high-tech, self-guided munitions, designed to destroy the enemy's heavy armoured vehicles. This type of missile was one of the key deterrents the Ukrainian army used to intercept the Russian blitzkrieg against Kyiv in early 2022, when huge columns of tanks and armored personnel carriers headed straight for the country's capital.
Location:
Targovishte
Is the new wannabe industrial hub. It's looking for a contractor for the brand new Industrial zone, worth 21 million levs, or 10.5 million euro.
Trakia highway
With 780 serious road accidents per year, the motorway is among the most dangerous roads in Europe (5 deaths per 100 km per year, compared to 2-4 per 1000 in the rest of the EU). It is the busiest road in Bulgaria, with the most frequent accidents in the summer months. Despite planned repairs and modernisation of the motorway, there are still no ready projects for widening sections with increasing traffic.
Every revolution eventually runs out of steam. At some point during the 10 years of French revolution, says Dominic Sandbrook in his wonderful The Rest is History podcast, everyone became constantly exhausted. This probably helps to explain why certain decisions were taken. So my bet is that after 4 years of revolution against Borissov's rule, which included a year of mass protests to remove him from office, 8 consecutive elections, 2 elected governments and 4 caretaker ones, and endless debates in God knows how many parliaments, people are just resigned to his return..
And back he is. This week a government with GERB in charge and two smaller parties in tow - socialist BSP and populist TISP - was voted in, marking the full return of Boyko Borissov to power and the end of the 4-year revolution. Not everything is quite the same, of course: he is still unacceptable as the face at the helm, and is not the one leading the government. His long-time aide and one time secretary Rosen Zheliazkov is, but the cabinet is full of faces from his previous 3 governments, cementing the fact that things have reverted to where they were.