site.btaMedia Review: May 21

HIGHLIGHTS

Not a single topic dominates the news media on Tuesday.

The morning programmes of the Bulgarian National Television (BNT), bTV, and Nova TV featured discussions and live reports on a variety of topics mostly concerning home affairs.

The Bulgarian National Radio (BNR) morning interviews on the topics of economy and energy. Guests were Kremen Georgiev, Chairman of the Association of District Heating Companies in Bulgaria, Hristina Hristova, former Labour and Social Policy Minister, and Georgi Parvanov, human resources expert, member of the Board of the Bulgarian Association for People Management and of the Bulgarian Employment Confederation.

The topics on the front pages of Tuesday’s print media were mostly concerning the Bulgarian economy. The main headline on the front page of Trud says that “funding does not stop universities from protesting”. The top story in Telegraph is about car buyers, the headline reads that Bulgarians buy cars stuffed with sand from Dubai. The leading story on the front page of 24 Chasa is about housing prices and six reasons why the banks might reject buyers a loan. Duma’s frontpage story is election campaigning of the Bulgarian Socialist Party (BSP).   

ECONOMY

Mediapool.bg quotes an article of Capital.bg from Monday, according to which the procedure for the sale of First Investment Bank (FIB) is at an advanced stage, the candidates to acquire it are UniCredit Bulbank and Postbank, and the choice of a buyer is expected as early as this month. Capital.bg references own sources for the information. According to their article, both contenders for FIB’s assets are highly motivated and are apparently ready to pay in the range of EUR 500 million - a price far exceeding the stock market valuation of the financial institution. Capital.bg writes that whether there will be a deal depends on whether the offers will satisfy the main FIB shareholders - Tseko Minev and Ivaylo Mutafchiev. The article highlights that the sale would be rather beneficial for the sector, as FIB has several times become a source of risk for the whole system.

Capital.bg writes that since the beginning of May, FIB’s shares on the Bulgarian Stock Exchange have jumped by almost 70%. Their price reached BGN 4.80 - levels not seen since 2018, before shrinking to BGN 4.00-4.50, where it continued to trade at relatively high volumes and with sharp fluctuations. The market capitalization, which just weeks ago was gravitating around BGN 350 million, climbed to around BGN 650 million. Officially, there is no disclosed information to explain the sudden boom in investor interest, and the first-quarter report doesn't shine with anything special - although it shows a profit of BGN 18.7 million, it even drops under the weight of write-offs. The rationale for such a jump can usually be only one - deal expectations. Bulgaria's fifth-largest bank by assets has not even reported that it is in talks with potential buyers and did not respond to a request for comment for the article. Capital.bg says it confirmed through several sources that a procedure is underway in an advanced stage, with final bids and a buyer selected possibly as early as May. And if the necessary regulatory approvals are obtained, a real handover of ownership could take place by the end of 2024 or early 2025.

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Georgi Parvanov, human resources expert, member of the Board of the Bulgarian Association for People Management and the Bulgarian Employment Confederation, told BNR that he expects about 10% average wage growth in 2024. "The bigger question is how much is the real inflation and whether productivity grows in parallel with wage increases," he noted. Parvanov predicted a relatively equal wage growth in the different sectors. He pointed to the negative trend of having a large number of people who neither work nor study, saying that currently less than three million people are employed in Bulgaria. Parvanov stressed that the country is entering the summer season with a huge staff shortage. According to him, it is important for Bulgaria to have a long-term strategy for the matter and focus on the import of capable staff.

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24 Chasa writes that the Bulgarian National Bank is tightening up the requirements for housing loans, by introducing six criteria. The article highlights that if the loan covers 80% of the price of the property, then paying off installments should be 40% of buyer’s income and the repayment period should be up to 30 years.  

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Former Labour and Social Policy Minister Hristina Hristova said in an interview with BNR that pension updates are going as planned and as it has been doing for the past 24 years. She was asked to comment on the topic in relation to an extraordinary parliamentary sitting to happen on Tuesday in the afternoon, during which MPs will discuss the upcoming raise in pensions. They want Parliament to guarantee that the National Social Security Institute (NSSI) and the caretaker government will implement the state budget as written and voted by the Denkov cabinet, whereby pensions should be increased by 11% as of July 1. CC-DB pointed out that the request was submitted after what they describe as an attempt of the caretaker cabinet to reduce the increase in pensions to 10%, citing a draft report of the NSSI Supervisory Board.

The former social minister noted that the number of people in the workforce is decreasing, and, in the future, there could be problems with the sustainability of the pension system. She asked whether it was not time to consider whether the so-called "Swiss rule" (pensions must be adjusted annually by 50% of the previous year's inflation, whether positive or negative, and by 50% of the growth of the average contributory income) was the best mechanism for updating pensions. "There are other ways - for example, to increase the weight of each consecutive year of service. This gives an idea of a person's ongoing contribution to the pension system," Hristova said.

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Kremen Georgiev, Chairman of the Association of District Heating Companies in Bulgaria, said that the Association expects heating prices to decrease by 5% in July 2024, but at the expense of electricity prices. Most district heating companies in the country want higher tariffs for heating and hot water from July 1, 2024, it becomes clear from their applications to the Energy and Water Regulatory Commission. But the Sofia district heating company, which is still drowned in debts, is proposing a decrease in heating bills. Gergiev was adamant that it cannot happen. In order for the Sofia district heating company to lower heating prices, it must want to price the electricity more, which is cross-subsidization, and it is not allowed, Georgiev said.

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Telegraph’s top story on car buyers reads that Bulgarians are saving up by buying cars from countries outside the European Union, which have much lower prices. The daily writes that the new trend has its own risks as the vehicles might be difficult to reach Bulgaria or have surprise defect parts.

FOREIGN AFFAIRS

Journalist Georgi Milkov commented on the death of Iranian President Ebrahim Raisi on the morning programme of BNT. Mira Mayer, an expert on Middle East conflicts and lecturer at NBU, and journalist Mohammad Khalaf covered the topic in the studio of bTV. All analysts mulled on the possibility of the accident being non-accidental.

POLITICS

The morning programme of bTV hosted candidates for MEPs from various political parties which had time to be interviewed separately and also take part in a televised debate.

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The frontpage of Duma has a headline saying that the so-called “assemblage” (the government formed the Continue the Change – Democratic Bulgaria (CC-DB) with the support of GERB-UDF, has destroyed Bulgaria’s energy sector. The article presents election campaign materials of the Bulgarian Socialist Party (BSP).

EDUCATION

Education Minister Galin Tzokov was on the morning programme of BNT to comment on pupil’s state exam in Bulgarian language and literature, which took place on Friday, May 18. Tzokov noted that all pupils will receive the full points for an exam question which was faultily presented.

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Trud’s article, which covers the aim and development of protesting tertiary education institutions in Bulgaria, highlights that university rectors want the country to be able to export higher education. The daily writes that the nearly BGN 80 million that the caretaker government has urgently allocated for higher education in the country will not stop the unprecedented protest of the universities. State and some private universities closed their doors on Monday because of the chaos in the system, which lacks more funds for science and quality, rectors told Trud News. They will insist on an urgent reform, which should be among the first tasks when the 50th National Assembly is formed, otherwise the new academic year could be blocked, the article reads.