The week: An eagle has finally landed. Is it too late?

The story begins in 2004, when Bulgaria joined NATO. At the time, Sofia made a commitment to modernize its army by 2016 with 11 projects, one of which was the purchase of a new multi-role combat aircraft. By the way, in its 2023 defense investment plan, Bulgaria has 13 modernization projects, 10 of which ought to be completed by 2026 - obviously not happening. First red flag.

In 2005, it became clear that the new fighter aircraft project would cost USD 1 billion. Among the options discussed for a new aircraft were the Swedish Gripen, some used F-16 from Israel and Portugal, a batch of used F-18 from the USA and the French Rafale. The project was supposed to start by 2007 but it stalled until 2011. What was supposed to be the final decision was once again delayed in 2011-2012 when then PM Boyko Borissov suspended the purchase "until the end of the financial crisis."

In 2015, then Air Force Commander Rumen Radev warned that the fighter aviation would soon be grounded as the Soviet MiGs' resources would run out and Bulgaria would lose its air sovereignty. Sensing this to be a vital issue for the public, he practically ran on this ticket to win the presidential vote the following year.

In 2016 the second Borissov government restarted the whole process from scratch and the cross-institutional committee appointed to choose the new fighter jet went for the Gripens. Everything was going fine, Borissov even ensured his Swedish counterpart at a 2017 EU Summit that it was a deal done. Until it wasn't. We might never know who convinced Borissov that he needs to put an abrupt end to the closed-off procedure and go for a bilateral negotiation with the US for the purchase of new F-16s, but this is exactly what happened in 2018-2019.

It was an obvious kowtow to just-elected Donald Trump, as Borissov wanted to show off with a gift and arrived at the White House with a contract for over 2 billion levs.

And when the contract was finally signed and paid for in 2019, the deadline for the delivery of the 8 jets was the start of 2023. Then Covid-related procurement delays came, and then the war in Ukraine started and all timetables were off.

Even with this whole delay, what was even more ridiculous was Bulgaria's inability to repair its main airbase on time and send qualified pilots to get trained in the US.

In the meantime, for failing to modernize its Air Force fleet and forcing its pilots to fly minimum hours. Bulgaria lost a MiG jet and a pilot - Maj. Valentin Terziev, as well as two pilot instructors, among several other serious incidents.

And then the international scene also changed abruptly. Anchoring your defense to the US was seen by CEE states as their only option against Russia. Poland was a leader in that. The past months have shown this no longer holds true.

So if Bulgaria wants to adequately rearm and it is probably going to spend a lot of money on that, it needs to do it with a plan followed consistently and fast. But here question looms- what if we have once again purchased an advanced aircraft we are unable to maintain because of shifting geopolitical sands?

Politics this week:

The attempt by the three radicals - Vazrazhdane, Mech and Velichie - to topple the Zhelyazkov cabinet failed on Thursday afternoon when only 50 MPs backed the motion of no-confidence and 150 voted against it.

This happened amid clear preliminary indications that the motion would not succeed - not only because of its unpopular topic, but also because of the vow of part of the opposition to support the cabinet at least until the Euro convergence report due in June.

The euro and nothing else matters

It was eurozone entry that was the argument used by the MRF-Dogan on Tuesday to announce that they were maintaining their support for the cabinet despite the breach of coalition agreements - at least until June, when it will be clear whether the country would be let in the common currency area. The decision was made at a joint meeting of the party leadership with MPs, regional chairmen and mayors of MRF-Dogan.

Peevski continues to advance

Unfortunately for the Dogan faction of the MRF, their decision to keep backing the cabinet seems like a postponed death sentence. The defections away from the "original" party of Bulgarian ethnic Turks in the direction of Peevski's MRF-New Beginning faction kept on coming this week, with three mayors from the Razgrad Region, who have until now supported the camp of the founder of the MRF party Ahmed Dogan, announcing they are going over to the side of Peevski.

And while the old MRF continues to slowly erode, the new one is on the rise nationally as well. A poll by Market Links from Thursday morning showed that the MRF-New Beginning party is moving up the polls and has now overtaken Vazrazhdane in third place with a projected 11.2% of the vote in an early election.

However, take with great caution such research. First, there is no election coming, and second, this marks actually a fall from the 11.5% Peevski managed to grab in October 2024 with the most-elaborate vote-buying campaign ever.

Economy:

Bulgaria's GDP per capita is 66% of the EU average. In 2024, the indicator, which is a benchmark for living standards, rose by 2 percentage points compared to the previous year. This is according to preliminary Eurostat estimates, which also take into account the differences in purchasing power across countries. Since 2019, the indicator has increased by 11 percentage points - the fastest rate of growth in the union. Despite this, Bulgaria remains the country with the lowest GDP per capita in the EU, behind Greece and Latvia. Imagine what we could have done, have we not been a captured state, huh?

Services account for 70% of economic added value

Services are the leading sector in the Bulgarian economy, accounting for 70% of value added and 60% of employment, while agriculture's share has declined significantly over the last thirty years. These are some of the findings of the Economic Analysis Council's annual report, which tracks the structural transformation of the economy from 1995 to 2023. There has been no premature deindustrialisation, with industry remaining at a high share of around 30% in both value added and employment.

Figures:

are the average labour costs in Bulgaria in 2024. They increased by 14% in a year, but remain the lowest in the EU, according to Eurostat.

1.9 billion levs

or 0.9% of the projected 2025 GDP is the budget deficit at the end of Q1 2025, according to preliminary data of the Ministry of Finance. The deficit has almost doubled in just one month.

Business:

The bottling company announced a new investment - 11 million euros will be put into an expansion of its logistics base. The new warehouse will be located at the Devin production site, financed with own funds and should be completed in 2026.

Transport

The parcel delivery company, which has a market capitalization of over BGN 1 billion, saw its shares gain more than 8% on the Bulgarian Stock Exchange this week after it published its individual financial report for last year. It notes that turnover has now topped BGN 365 million - a 17% increase on the previous year.

Watch out for:

Sofia Tech Park has officially announced the successful upgrade of the Bulgarian Discoverer petascale supercomputer, which is part of the European High Performance Computing Joint Undertaking (EuroHPC JU). The machine upgrade, called Discoverer+, includes the installation of 4 servers with 32 NVIDIA GPU chips to improve overall performance. Data storage capacity has also been increased to ensure the high-performance system can meet evolving computing demands. The machines themselves come from Hewlett Packard Enterprise. Last but not least, Discoverer has received additional UPS systems. Discoverer+ has a new class of functionalities, GPUs and memory, and its performance has been significantly increased, Sofia Tech Park explained. The machine is now specialized for neural network training, working with large language models, artificial intelligence, creating digital doubles, machine learning and other computationally intensive tasks.

Date:

From Wednesday, new rules for entry to the UK came into force. In an attempt to strengthen security and control migration, the British government imposed pre-clearance on travellers even before they arrived in the country. The most important requirement is the acquisition of an Electronic Travel Authorisation (ETA) for citizens of the European Union and other countries, who until now could travel without a visa. The quickest way to apply is through the UK ETA app, which is available for a variety of operating systems. In addition, the procedure can also be carried out online on the official UK Government website.

Person:

Mustafa Emin

The former advisor to Defense Minister Todor Tagarev and member of Yes, Bulgaria party switched sides quite abruptly and is now a part-time defence advisor to the chairman of the parliamentary group and ideologue of the Velichie party Ivelin Mihailov known for his diametrically opposing views on Russia and NATO compared to the Euro-Atlantic "hawk" Tagarev.