The week: TurkStream comes back to bite

The proposed timeline:

• From January 1, 2026: Ban on all Russian gas contracts (pipeline and LNG) signed in 2024.
• From June 17, 2025: Ban on short-term Russian gas contracts (under one year) signed before that date.
• From January 1, 2028: Ban on all remaining long-term Russian gas contracts.

This effectively ends Russian gas imports to the EU by 2028 and mandates that any gas transit-via TurkStream or the Kalotina-Dimitrovgrad route-must be proven not to originate from Russia.

The problem is this is nearly impossible for TurkStream. The capacity of the pipeline on Turkish territory is directly linked to Russian gas flows from the Black Sea and the Russian energy giant has reserved nearly all the pipeline's entry and exit capacity through Bulgaria until 2039.

The biggest problem in such a case would be for Budapest and Belgrade, which are currently relying heavily on the gas from the pipeline. Yet if enforced, the regulation would significantly impact Bulgaria's gas operator Bulgartransgaz, which relies on Gazprom's transit fees to recover nearly 3 billion levs invested in TurkStream infrastructure. Moreover, Bulgaria may face massive compensation claims from Gazprom if transit rights are terminated.

Interestingly, Sofia is silent on the issue. The country representative in the EU has not yet officially filed any motion, claim sources, but opposition likely won't stop the regulation.

In summary, the EU's proposed ban is a decisive move to end its dependency on Russian gas, but it poses major strategic and financial risks for countries like Bulgaria, which have significant infrastructure and long-term contractual commitments tied to Russian energy.

Politics this week:

Arguably, Bulgarian police hit rock bottom a long time ago, but with the friendly support of other law enforcement agencies, the ministry continues to show that it can plummet even lower depths by the week. Several events in recent days show why public trust in this institution, which is supposed to protect and help the public, is so low.

From the synchronized "failure" of the batteries in the body cameras of the police officers who arrested Yavor Georgiev in Varna, who subsequently died, to the drama of the notorious prosecutor's son from Pernik, who, despite being under house arrest, continued to extort and harass people and businesses, and then disappeared under an arrest warrant, only to reappear in a YouTube video - there is a new low every day.

Police! Can you escort me home?

The latest show put on by the Ministry of Interior was a recording of a police patrol escorting a green Lamborghini for no good reason at high speed on the Trakia motorway-the most dangerous motorway in the EU, which they are supposed to protect. The police chief didn't even seem troubled by the video, appearing on social media.

The "democratic community" attempts to assemble

If you spent enough time in central Sofia among liberal Bulgarians, you might have heard about the elusive concept of the "Democratic community." Nominally represented by the WCC-DB conglomerate (which itself is formed by three parties), this alliance of factions with supposedly similar values who all want to safeguard Bulgaria's pro-European and Western future can more often be found squabbling than building a common front.

A president in the making

This week, the question of whether the democratic community could put forward a single nomination for a presidential ticket in the 2026 vote for head of state, was brought up by DSB (part of the DB coalition). Even if this is possible, how can unity be achieved around the names-through internal elections, a national vote by supporters, or a leadership agreement? These questions were all raised at a round table on Monday.

Unfortunately, the conversation did not go far and instead of having names or a format agreed to, it had the opposite effect - the party leaders began discussing which other factions they could invite for further discussions and nominations.

Economy:

This is a 20-percentage point increase in household consumption index over the past 10 years, reaching 74% of the EU average. This is one of the fastest growth rates in the EU, second only to Romania. The monitored indicator is Actual Individual Consumption (AIC) per capita, expressed in Purchasing Power Standards (PPS), as measured and published by Eurostat.

Bye, Hungary

A year ago, Bulgaria caught up with Hungary, but now it has left Orbanland in the rearview mirror and is level with Estonia. The 2024 data show that Bulgarian households have reached 74% of the EU average. This places them second to last in the EU - far behind the rocket Romania, yet still it's an accelerating pace.

Figure:

At the first auction of government securities after the release of positive convergence reports on the euro, Bulgaria managed to raise another 300 million levs on more favorable terms without any problems. The yield achieved for the seven-year bonds is 3.06%, while two months earlier the same amount was placed from the same issue, but at 3.51%.

Business:

The Greek-Cypriot AI startup that combines AI models with deep engineering processes to solve one of the most painful problems in software development - the transition from design to real code - won a 300,000 euro investment from the Bulgarian venture fund Eleven.

Medical equipment

The company announced it is investing 100 million levs in its own factory. The Plovdiv-based medical equipment manufacturer will produce most of its components in-house.

Watch out for:

The foreign minister had quite a week. First, he was caught on camera voting in local elections using a phone picture of his ID - something completely outlawed, yet no one in the electoral committee commented on it. When Dnevnik found out about the video and posted the news, the supposed "news agency" Pik removed the clip.

Then Georgiev's ministry took almost a week to rescue Bulgarian citizens from the rockets in Israel. Then it said it had "helped two people leave Iran" and, the next morning, it seemed the Prime Minister had taken over because the press release from his office stated the embassy in Tehran had been shut down.

Daron Acemoglu

The American economist of Turkish-Armenian descent, Nobel Prize winner and co-author of the Why Nations Fail (2012) study of inclusive and extractive institutions gave a public lecture in Sofia on the topic of "Who Will Own the Future". His presentation, which was part of the Green Transition Forum organized by the information portal dir.bg, was followed by questions from the moderators and the audience. We will translate these for you next week!

Dates:

The International Festival of French and World Pop Music Francofolies returns to Plovdiv with three evenings featuring Zaz, Gipsy Kings, Alexandra Stan, In-Grid, Kiril Džajkovski, Krisko, Lily Ivanova, Master KG, La Caravane Passe, RILA, the Mangasarian Brothers, and others.

22-29 June

Bansko Nomad Fest is taking place in the mountain resort under Pirin. The festival brings together digital nomads, freelancers, and entrepreneurs from around the world in Bansko for a rich palette of lectures, workshops, outdoor activities, meditation, and opportunities for new professional and personal connections. Oh, and it ties in neatly with the recent decision by Parliament to amend the Foreigners Act so that foreign citizens can reside in Bulgaria while working for a company outside the European Union.

Institution:

FATF

Although it is on the verge of joining the eurozone, Bulgaria remains on the "gray list" of countries where money laundering is relatively easy. The authorities in Sofia have promised to implement all of the 40 recommendations of the Financial Action Task Force (FATF), the world's leading organization for combating money laundering. Getting off the list seems to be high on the agenda of the current government.