site.btaMedia Review: November 9

ECONOMY

The Neftochim oil refinery in the Bulgarian Black Sea city of Burgas, majority-owned by Russian company Lukoil, has circumvented an EU ban on member states to trade in products made from Russian oil, and by taking advantage of a derogation concerning the import of Russian crude oil and oil products, the refinery has earned big profits, MediaPool.bg reports. Neftochim has done that by producing fuels and lubricants from cheap Russian oil and pretending to export them to non-EU countries, while in fact the products are transferred to other ships in the open sea or at international ports so as not to leave any trace as the goods are loaded onto newly registered vessels or on vessels sailing under different flags - and eventually the fuels enter the EU and even the US.

In this way, Neftochim is involved in a scheme to finance Russia's war in Ukraine. This transpired from an investigation by the NGO Global Witness, the Bulgarian think-tank Center for the Study of Democracy and the Centre for Research on Energy and Clean Air, as reported by Politico.eu.

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A threefold rise in profits, a major loss of tax revenues and higher prices for consumers are the three most important effects of the reduction of the VAT rate for restaurants from 20% to 9% in 2020, MediaPool.bg says in its top story. The website recalls that the VAT cut was approved by the then GERB government under lobbyist pressure, officially to mitigate the effects of the COVID-19 pandemic and with the promise to bring the restaurant business to light.

Official data from the National Revenue Agency (NRA) about the sector's taxes and social security contributions paid from 2019 until August 2023 show a 10% decrease in such payments.

The website goes on to recall that the question of reintroducing the 20% VAT rate for restaurant and catering services resurfaced in September 2023, but the sector stood up against the authorities once more, arguing that an analysis on the effects of the tax cut was in the making using NRA data. According to the sector, the analysis will show objectively how much of the business has come to light. The analysis has failed to materialize over the last month and a half, the website notes.

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"One More Millionaire Every Day," runs the main headline in Trud. The paper says that the list of people in Bulgaria holding more than BGN 1 million on deposit expands by one person every day. As at the end of September, there were 1,410 such deposits, Bulgarian National Bank data show. This is a record high number. In just three months, deposits of over a million leva each increased by 86. Deposits of BGN 500,000 to BGN 1 million increased even faster. The number of deposits of BGN 1,000 to BGN 2,500 remained almost unchanged over the past year, and those under BGN 1,000 decreased by 150,000 to 4.78 million.

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Another major public procurement procedure for the supply of trains, worth more than BGN 1.2 billion, was suspended by the Transport Ministry on November 3, the 24 Chasa daily says, citing information from the electronic register of public procurement contracts. The planned deal was for 20 electric one-level push-pull trains. The main requirements for the deal included a maximum train speed of 200 km/h, a capacity to seat at least 300 people, maintenance for 15 years and staff training. This time, the complaint to the Commission on Protection of Competition was submitted by Spanish company Patentes Talgo SL. An open-door meeting on the matter will be held on November 9. According to knowledgeable sources, the Spaniards claim they needed more time to prepare an offer.

The news comes after other public procurement procedures for the acquisition of 35 electric multiple-unit trains and seven bi-level trains, worth BGN 1.5 billion in aggregate, were suspended earlier.

POLITICS

The Bulgarian Socialist Party (BSP), supported by There Is Such a People and Vazrazhdane, have submitted a no-confidence motion against the government for its perceived failure in the field of national security and defence, BSP leader Kornelia Ninova said, as quoted on page one in Duma. Ninova explained that the government's policy on Schengen membership is one of the reasons for the motion. She sees a need for a debate and strong measures in the field of security and defence.

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The mechanism for Bulgaria's governance obviously needs to be re-negotiated, GERB leader Boyko Borissov said after the party leadership had a more-than-three-hour meeting with the GERB parliamentary group, as quoted by Trud. "The solution is to let them govern while we control them through Parliament," Borissov said. ("Them" refers to the Continue the Change - Democratic Bulgaria [CC-DB] coalition, which, together with GERB-UDF, are behind the government.)

In the coming days, GERB will continue its analysis of the work of the government, and on Saturday, the party will hold a national meeting in the north-central town of Veliko Tarnovo. If CC-DB and GERB-UDF begin to hold meetings with government ministers to decide jointly on their legislative proposals, they will be able to share the responsibility, Borissov said. He pointed to a paradox: "We are currently in opposition to what we support." He accused CC-DB of failing to implement their governance programme and legislative agenda.

Social anthropologist Haralan Alexandrov comments for Trud that the government is becoming increasingly unpopular. This "assemblage" between CC-DB and GERB-UDF is a strained structure which is essentially a minority government of CC-DB that is entirely dependent on GERB-UDF, Alexandrov says. "Such a structure is unstable and vulnerable by definition, and therefore we can expect some form of re-negotiation of the relationship, and at least, the signing of a formal agreement." Cabinet changes are unlikely, Alexandrov says, but then warns: "Very tough months lie ahead, things are not going well in the economy and from a financial perspective."

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Political developments in light of the results of the October 29 local elections were discussed on the morning talk show of BNT1, the main channel of Bulgarian National Television. Former MEP Svetoslav Malinov said the relationship between CC-DB and GERB-UDF has not weakened. He commented: "God knows why, GERB, and [their leader] Boyko Borissov personally, are trying to create the impression that they are very, very dissatisfied with the elections and have started an in-party discussion about whether to stay in the government. The outcome of the discussion is easy to predict. Of course, they will stay in the government." According to Malinov, the government is getting more stable.

Dimitar Ganev of the Trend Research Centre said on the show that the elections gave everyone their due share. Toncho Kraevski of the Institute for Right-Wing Politics said: "GERB are playing a very interesting dual role. On the one hand, they are the largest partner in the incumbent majority. On the other hand, they occupy the parliamentary space of the opposition leaders, because they are providing checks and balances for the government all the time."

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The Russian Church in downtown Sofia will be reopened on Friday, Nova TV said in a news report which was quoted by other media. The first service in the church is expected on Saturday. The church was closed after Bulgaria expelled three priests for violating diplomacy regulations, Nova TV recalled. On October 12, the Russian Orthodox Church appointed Vladimir Tishchuk, a Russian cleric of the Orthodox parish of Austria and Germany, to head the church in Sofia.

LAW & ORDER

While three countries are searching for him on an Interpol red notice, Evelin "Brendo" Banev, known as Bulgaria's cocaine king, is gathering truffles in Vratsa region in Northwestern Bulgaria using a dog and wearing casual clothes, 24 Chasa says in its main story. The daily notes that Banev asked the Sofia City Court for the third time to recognize his drug-trafficking-related sentences from Italy and Romania but got another refusal. He is different from the thugs of the 1990s, he even wrote two books, the story goes.

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The Road Infrastructure Agency has been definitively sentenced to pay BGN 460,000 (including interest) to the heirs of a woman who died in the Echemishka Tunnel on the Hemus Motorway in 2017, when a piece of lighting equipment collapsed on her car, SegaBG.com reports. The matter was decided by the Supreme Court of Cassation, which passed judgment in the civil case in its capacity as the highest court. The woman's two children and mother will receive BGN 110,000, and her widower will be indemnified with BGN 130,000. The rest of the penalty is interest and costs.