The week: Lose your illusions about the euro

Yet it was a spectacle nonetheless. And Radev won on three fronts. First, by forcing the opposition liberal parties to join forces with the ruling cabal of Boyko Borissov and Delyan Peevski in attacking him. This is a poisonous pill for them and has proven disastrous again and again. Second, by positioning himself as an alternative that is not as radical as Vazrazhdane (the pro-Kremlin party). And third - by siding with a large swathe of the electorate whose faith in institutions is already undermined.

Some of that might be useful for him politically in the long term (though I doubt that) yet for the most part it was a pyrrhic victory. Killing what's left of the opposition's fervor won't get him where he wants and surely won't get him a majority and it's never a good idea to dismantle whatever's left of the institutional legitimacy.

But leave Radev aside and focus on the real issue here. There is now a clear majority of Bulgarians who oppose the euro-adoption. A recent poll by the new agency Myara (an unbiased pollster) revealed what's long been known from the Eurobarometer polls. 55% of the interviewees are against the euro, with only 35% in favor. Whatever their concerns or reasons for that, this is a large base, which the President is tapping. This is not to say that people will torch the Parliament or that they would even vote that way in a referendum - but there is a lingering distrust.

An interesting twist underpins all this. Due to the hyperinflation of the 90s and the currency board, Bulgaria was fiscally strict and has not run up deficits - this has been the only political consensus in the country in the past 2 decades. This, coupled with the introduction of a flat tax, led to severe underfunding in various areas - from infrastructure to healthcare. Since the state was known to be corrupt (as the EU funding proved), that was not an issue. And as our private wealth grew, our common goods decayed and crumbled.

Now suddenly joining a union that is heavily in debt (the general government gross debt to GDP ratio in the euro area stood at 88.1% at the end of 2024, compared to 24% for Bulgaria) creates uncomfortable vibes for many, who feel we're called on to take part in a game which wasn't played by the same rules for citizens of different political persuasions.

Add this to the crucial ingredient, which I've already explained here. A whopping 61% of Bulgarians say they do not believe the country is governed by the will of its citizens. I've argued this is because in the 17 years since Bulgaria joined the EU people have witnessed the capture of institutions, the draining of EU money into private pockets, a bank collapse, and the inability of the local political system to provide even basic justice.

If you believe a cabal of impunity is running the economy, joining the euro sounds like the next conspiracy. And being branded as a "mindless Kremlin whore" doesn't really help here, does it?

On the opposite side of the fence, there is a group of people who believe, just as delusionally, that the eurozone is some mythical promised land and once we get there, Bulgaria will be safe from the dangers of Russian encroachment, political radicalism, or corruption. Since nothing else worked, they are now pinning their hopes on a common currency, believing that outsourcing institutional capacity is going to save us from the captured institutions at home. This is a dangerous illusion and will bring just as many heartbreaks, I'm afraid.

Politics this week:

There are two essential activities that, if stopped, can wreak havoc in a city and sabotage a mayor: garbage collection and public transportation. This week, the opposition mayor of Sofia, Vasil Terziev, had to confront the second one. The entire overground transport has been shut down since Wednesday in the largest city-wide strike the capital has seen since the 1990s, which threatens to escalate and include the last remaining means of transport - the metro.

Sofia to a standstill

The result, as expected, has been total transport chaos, which has left a million workers and students of the capital re-adjusting their schedule any way they can - some travel with the (for now) working metro, others go to work by car, taxi or simply work from home.

Understaffed and unhappy

The chronic shortage of public transport drivers fueled the protest, which was organized by the main unions KNSB and KT Podkrepa. According to data from the municipality, the Stolichen Avtotransport municipal company, which runs the entire overground fleet of trams, buses and trolleybuses, is short of 250 drivers.

The starting salary is 1800 levs (900 euro) net - half of the average salary for the city overall. However, additional or extra shifts, as well as accumulated seniority, can raise it to 3,700 levs net. This means there is a constant under-performance of about 8-9% and drivers are systematically overworked. Instead of the envisaged increase of 5%, or 100 leva over the basic salary, they now want 400 leva for each worker, which means an additional 29 million levs from the budget of Sofia for 2025.

Who's to blame?

Needless to say, everyone in Sofia is riled. GERB's Boyko Borissov didn't miss the opportunity to blame the mayor, although it is questionable how he could have funded the salary hikes within the budget framework approved by the City Council. How do you find more people in a labor-shortage economy with non-competing salaries is another question (long-distance truck drivers' salaries are at least double to triple that).

Many decided to go after the protesters, as striker solidarity is practically non-existent in Bulgaria and people started comparing the salaries of, say, surgeons with those of drivers to highlight that the strikers' demands are unjustified. A race to the bottom, indeed.

It's beginning to look like a plan

On Wednesday two of the companies for garbage collection, connected to a well-known business figure with political connections, also warned of a coming strike.

Economy:

Consumption continues to grow both quarter-on-quarter and year-on-year - by 2.3% and 7.1% respectively, the statistics show. In recent years, household purchases, driven by credit and income growth, have been a propeller for the economy.

Welcome back, (state) investment

For the January-March period, there was a noticeable increase in gross fixed capital formation - by 6.1% year-on-year. The NSI data are usually revised afterwards, but most forecasts for Bulgaria also bet on increased investment this year - mainly through more public capital. By contrast, the contribution of net exports and industrial production to economic growth remains negative.

Figures:

Is the price Bulgaria has paid in advance to fortify 84 landslides since 2019, with half the money given to three companies without a tender and only three projects completed since then.

2,556 levs

The average gross salary in Bulgaria in March, up 11.1% from the same month last year. In Sofia, the average has surpassed 3,600 levs.

Business:

The German engineering giant announced its plans to invest 100 million levs in its joint Bulgarian IT company, Vaerolabs. The team now consists of 50 people, with a plan to grow to 90 in 2026.

Air travel

The airports in Burgas and Varna, which are owned by the airport operator, registered a 29.8% year-on-year increase in passenger traffic in April to 128 058. The total number of passengers at all airports served by the German group rose by 6.2% to around 13 million in the same month.

Retail

The Danish furniture chain will open stores in Burgas, Kozloduy and Sofia by the end of August, after opening outlets in Ravda, Velingrad, Botevgrad and Petrich since the beginning of 2025. Plans for the next financial year are to open at least five new stores and upgrade as many more.

Watch out for:

The young Russian dissident became popular this week when she shared her story about the refusal of the Supreme Administrative Court to grant her refugee status on the absurd pretext that she has not (yet) suffered from repression in her country. So she could not ask for asylum. "The court claims that my political activism is not sincere, that I allegedly undertook it solely to obtain refugee status. It claims that my protests and activism here in Bulgaria do not reach Russian citizens, but nowhere does it ask whether they reach the Russian authorities, who would prosecute me if I returned to Russian territory. The court demands that I prove "sufficient suffering", ignoring the very essence of the asylum system: the prevention of future reprisals as well, not just a statement of tragedies that have already occurred,", Elyseeva wrote. This is not the first time Russian dissidents have complained of problematic treatment by the Bulgarian asylum and court systems - maybe there are people in both who dislike their opposition more than they care to admit.

Company

That's the name of the new state-owned company, which will operate in the retail sector under the auspices of the Agricultural Ministry. It will sell "mostly" Bulgarian products with a 10% overhead max. At least that is what the minister said this week. Whether this will really happen is a bit dubious, if you ask us.

Location

One of the landmarks of central Sofia (for its historic, not architectural significance), which has remained unused for several years now, will finally get a new resident - the European Prosecution's local office (EPPO). The building was for a long time the headquarters of the Union of Democratic Forces (SDS), the leading anti-communist party after 1989. In fact, it was built as the Research Institute of Urban Planning and Architecture and has been in operation since 1967. It later housed several other parties and state agencies until it was abandoned in 2022.

Date:

Source: Capital weekly

17 May

On Saturday, the colorful and satirical Gabrovo Carnival, which is the biggest carnival procession in Bulgaria, will take place under the motto "Let's wag the dogs!" The streets of the mountainous city will become the scene of a colorful procession, concerts, and the symbolic cutting off of the cat's tail - an emblematic act embodying Gabrovo's thriftiness based on the fact that the door is closed faster behind it to diminish the cold. Alongside the main program, competitions for a carnival picture and for authors' memes inspired by the carnival's theme will be held. Entrance is free and the show starts at noon, so consider a day trip - we promise it will be worthwhile.