The week: Bulgarian politicians "flip the pancake"

It was announced two months ago and has been ongoing since then without any issues until the new Foreign Minister, Georg Georgiev, appeared in a photo with Bakalova on the MFA Facebook page. This reportedly made a wide array of Trump fans from all corners of the internet notice the campaign and decide that it is an awful idea to promote visa-free travel through the actress because she took part in movies ("Borat 2" and "The Apprentice") mocking the new US President or people around him. As if Trump himself would see the video of Bakalova (aimed at Bulgarian visa applicants) and keep the visas because of it.

The conservative shamans managed to convince GERB's Boyko Borissov, because just a few hours later - after he threw one of his typical tantrums in front of the media - the campaign was completely erased from the internet. Borissov said that someone like his action star friend Sylvester Stallone - who is favored by Trump - should lead the campaign, only for Bulgarian media to discover that Bakalova is set to appear in a movie directed by Stallone later this year.

Beyond acting as another embarrassing proof of how Bulgarian politics works, this anecdote should serve as a warning of how quickly local politicians "flip the pancake". This is not surprising, bearing in mind that (as a recent ECFR-sponsored poll showed) Bulgarian people themselves are very good at holding two opposing views at the same time (that, for example, NATO ally US poses a bigger threat to Bulgaria than Russia, which is warring against us). Politicians like Borissov who are good at quickly changing sides are quite successful with such an audience.

So, diplomatic readers of ours, watch very carefully where the pancake has headed, so you don't get taken by surprise about the country you wake up in one day.

Politics this week:

If you were the new Social Welfare minister from the Socialist Party (BSP), what would be a good first event to attend? Of course, a Russian embassy-sponsored forum under the title "Transition from a unipolar to a multipolar world. Europe - Balkans - Bulgaria" alongside Russian ambassador Eleonora Mitrofanova.

This is exactly what the new minister in the Zhelyazkov cabinet and nominee to become the next BSP leader Borislav Gutsanov did. Oh, and he was not the only one - S&D MEP Kristiyan Vigening, who is also running for the post, showed up. If there was a surprise it was that a few of their fellow party members, like Environmental Minister Manol Genov, spoke out against their attendance. But Boyko Borissov was much more tolerant: "Just as we tolerate Gutsanov meeting with Mitrofanova, taking into account the complexity of the coalition and their ideological attachments to Russia, so should they tolerate what we have committed to our strategic and European partners. This is the price of compromise," he told journalists.

N. Macedonia on the radar once again

And if you missed the regular Sofia-Skopje spat, this week it returned with a bang. The Macedonian PM Hristiyan Mitskoski announced that, despite agreeing to it in 2022 under the so-called French compromise, his country would not, in fact, inscribe the Bulgarians as a minority in its constitution.

This was followed by an outburst by Bulgarian politicians like Slavi Trifonov (who took down the Kiril Petkov government in 2022 allegedly because of the N. Macedonia compromise) and the MFA, too. In a statement, the Foreign Ministry reiterated its position that protecting the rights of minorities is not a bilateral issue between the two countries but a question of European values, which practically hinted at the fact that Sofia will continue blocking Skopje's accession into the EU. Here we go again

Graf Ignatievo airbase revamp costs swell by 234 million levs

The controversy surrounding the upcoming acceptance of the new Bulgarian F-16 Block 70 fighter jets seems to be deepening, and with it - the unforeseen and hidden costs associated with the transition of Bulgaria's Air Force to the new warplanes. According to a written reply of Defense Minister Atanas Zapryanov to an official inquiry of WCC-DB MP Ivaylo Mirchev, it turns out that after a series of delayed and unfulfilled contracts for the renovation and modernization of the Graf Ignatievo airbase, which will host the F-16s, the total price of its upgrade to the standards required by the US would swell by over 234 million levs to almost 700 million levs.

The largest amount of money - about 108.4 million levs excluding VAT - will go towards plane shelters with manoeuvring areas, taxiways, and service roads. A servicing area for the weapons and ammunition would cost an additional 38.8 million levs and two hangars for repairs of the planes would cost another 64 million levs and 22 million levs, respectively - all excluding VAT. This makes the total cost of the F-16 acquisition astronomical - something that President Rumen Radev, who vouched for the Swedish Grippens a while ago - warned back then. It seems that the decision by Borissov's third government to choose the F-16s is costing Bulgaria dearly.

Economy:

A struggling Bulgarian budget may receive unexpected support from a friend. Ukraine's parliament has finally allowed the purchase of the two nuclear reactors from the Belene nuclear power plant to be used at the Khmelnitsky nuclear power plant (NPP). Back in the summer of 2023, the Bulgarian parliament approved the sale of the equipment for nearly 1.2 billion levs, initiated by GERB at the time, and the proposal was accepted by all parties except BSP and Vazrazhdane. The Canadian company Westinghouse, which is also consulting on the construction of units 7 and 8 at Kozloduy NPP, has already announced that the reactors from Belene NPP, planned for the Ukrainian plant in Khmelnitsky, will be able to run on US fuel. The only thing that is left is for the purchase to take place effectively.

Peevski and BSP propose food price controls

Delyan Peevski from MRF-New Beginning and MPs from BSP want state intervention over the pricing of traders, or in short - a cap on profits. Their action is through two separate bills that differ in detail and scope, but their focus is on interfering with free trade. The bills have yet to be assigned to committees, but Tsveta Karayancheva of GERB said in an interview with Radio Plovdiv that as a right-wing party they would not support the proposal for a marginal surcharge on basic food products. A few days ago, Martin Dimitrov from WCC-DB summarized that a price ceiling does not work anywhere, which is a signal that this formation would not support such a move either.

Figures

The annual inflation for 2024 according to the National Statistics Institute. It has mostly been driven up by rising costs of amenities (rent, gas, water), food and beverages, transport and recreation.

-3.3%

The decline in exports in 2024, which comes after an even more severe decline of 6.5% in 2023, mostly driven by food, machinery, and vegetable fats.

14.9 billion levs

The expansion of the fast-moving goods market in 2024, amounting to 7.7% growth on an annual basis.

Business:

For about three years the Sofia-based company, which is owned by a Greek and a Ukrainian, managed to rank in the top 3 of Bulgarian airlines and partner with the likes of World Atlantic Airlines, Air Serbia and airBaltic. It has 10 aircraft and plans to increase its fleet this year.

Startup

The company for flying robots for inventory monitoring founded by Boris Iskrev and Stanislav Durmonsky attracted an investment of USD 3.5 million. The round was led by Bulgarian venture capital fund LAUNCHub Ventures. With the money, Uvionix will accelerate its market entry in the US and Europe and is already expanding its engineering teams in Bulgaria.

Energy:

The price of natural gas on international markets reached its highest level in 2 years on 10 February. On Europe's largest exchange, the TTF, futures traded for 58 euros per mWh on Monday morning. And this is dragging the electricity markets with it, with electricity specifically in south-eastern Europe trading at around 150 euros/MWh. The circle is closing as higher energy demand and higher prices activate coal-fired power plants, whose higher output in turn boosts carbon quotes - currently at around 82 euro/t, the highest since autumn 2023. Weather models are forecasting snow flurries towards the middle of the month in the region and Bulgaria, which will reinforce the cold nature of the month, and keep the market situation similar.

Watch out for:

A surprising change of leadership in the Bulgarian Independent Energy Exchange was announced on Tuesday. Dian Boev was elected to replace Executive Director Konstantin Konstantinov. The new director is a lawyer by education, with a Master's degree in European and International Economic Law from the University of Vienna. At first glance, he does not have much experience in the energy sector, but this is not necessarily the case. From 2016 to 2022, according to his Linkedin profile, he worked in the district court in Haskovo, and in recent years he worked in the office of the CMS law firm in Bulgaria, with a focus on energy. The Energy Exchange is the only platform in the country on which electricity transactions are concluded, with three main segments - Intraday, Day-Ahead and Bilateral Contracts.

Place:

The European Public Prosecutor's Office has filed charges against the owner and manager of a company that supplied nine trolleybuses for 4.5 million euros in Vratsa. According to the indictment, during the public procurement, the supplier declared that the trolleybuses were from a Polish company, solely to win the contract while the evidence showed that the company bought the trolleybuses from a Belarusian state-owned company, which was later subject to EU restrictive measures for supporting Russia's war against Ukraine.

Date:

June 2031