site.btaMedia Review: May 13

Some of the highlights of Monday's news media are the price of bread, North Macedonia's path after VMRO-DPMNE won the May 8 presidential and parliamentary elections, and Tax Freedom Day.

BREAD PRICES

24 Chasa has a detailed analysis prompted by Parliament's decision on April 30 to cap the surcharge on the most popular types of bread (white bread, Dobrudzha bread and "Tipov" brown bread) at 15% until December 31. Dimitar Lyudiev, a long-time chairman of the Federation of Bread Bakers and Confectioners, says the surcharge depends on production costs, which in turn reflect the ingredients and the time it takes to make a particular type of bread. The most popular types take one to three hours to make, which accounts for their low production cost. Then retailers can set a surcharge of over 20%, but to keep the end-price affordable, they contract large quantities. There are also the retail chains' own brands, which come with surcharges of up to 10%. In contrast, specialty breads made by small bakeries can take up to three days to make; some of them come with surcharges of up to 40%. Lyudiev says the big problem is that bread consumption is falling steadily, while consumers' requirements are growing. Keto bread, bread with various seeds and high-protein bread are expensive but are made in small loaves and consumers are undeterred by prices of up to BGN 8 per kilo. Lyudiev argues that the cap on surcharges is hard to implement and will not help because bread prices are rising little if at all; they will go up if the 20% VAT rate for bread is reinstated after it was set at 0% in July 2023. The Association for Modern Trade (AMT) has asked President Rumen Radev to veto the surcharge cap. AMT President Nikolay Valkanov said that after a 14% drop compared to June 2024, bread prices started to increase, albeit at a slower pace, pushed up by pay rises and other factors.

Valkanov argued on the Bulgarian National Television (BNT) that the surcharge is not a profit: the 15% cap was set on production costs plus profits, not on profits alone.

NORTH MACEDONIA'S NEW PRESIDENT

Sunday's inauguration of President Gordana Siljanovska of the Republic of North Macedonia triggered a reaction in Bulgaria as she referred to the country as "Macedonia," its name in the period before the 2018 Prespa Agreement with Greece, which opened the way to Skopje's NATO membership.

Both President Rumen Radev and Prime Minister Dimitar Glavchev said on Monday that Bulgaria cannot accept statements and actions which contravene the 2017 Treaty of Friendship, Good Neighbourliness and Cooperation between Bulgaria and Macedonia, other international agreements signed by the Republic of North Macedonia and its principled agreements with the EU.

Interviewed by BNT, its International News Editor Tonya Dimitrova said both Siljanovska and VMRO-DPMNE President Hristijan Mickoski would soon have to give up their provocative nationalist rhetoric, especially if the latter wants to stay in office for more than a couple of years. The worst scenario for Skopje would be its separation from Tirana in their progress to EU accession, therefore the only option for North Macedonia is to revise its constitution to include Bulgarians. Also, North Macedonia will run into serious opposition from Greece, whose Prime Minister Kyriakos Mitsotakis opposed the signing of the Prespa Agreement at the time, so Athens can be expected to have a very low tolerance threshold. Commenting on Siljanovska's first statements regarding Bulgaria, Tonya Dimitrova said they sounded confused. According to Siljanovska, Bulgaria should reinterpret the negotiating framework with Skopje, which is actually the EU's negotiating framework, and should recognize a Macedonian minority, which is impossible under the Bulgarian Constitution. On Election Day, Siljanovska, who is a constitutional law expert and was a member of the Venice Commission with the Council of Europe, seemed to mix up the Council of Europe and the European Union.

FINANCE

Trud quotes the Institute for Market Economics (IME) as saying that this year Tax Freedom Day falls on May 13. Bulgarians have worked 134 days for the Treasury in 2024. Assuming that they make more than BGN 562 million per day - calculated on the basis of the projected GDP of BGN 206 billion in 2024, it takes 134 days to replenish the Treasury.

Interviewed by the Bulgarian National Radio, IME Chief Economist Lachezar Bogdanov said Tax Freedom Day is usually around mid-May and reflects the total tax and social security burden in a country. In fact, Bulgaria is far from being a tax or offshore haven. "If you add up everything paid by businesses, individuals and property owners, you will end up with a not insignificant burden, certainly more than a third of what we generate," he said. The earliest Tax Freedom Day in Bulgaria was April 20, 2012 and the latest was June 1, 2010.

In Trud, financial expert Dimitar Chobanov says just 20.9% of the annually projected revenues were collected in the first quarter. By comparison, based on data for the previous five years (2019-2023), the average first-quarter budget revenue performance was over 22.9%. This is due to many factors - from incorrect budget planning to tax administration performance to disinflation. First-quarter revenues increased mainly due to larger EU funding (though not under the Recovery and Resilience Plan) and higher tax revenues.

INCOME ISSUES

On Sunday, Continue the Change leaders Assen Vassilev and Kiril Petkov quoted a draft report of the Supervisory Board of the National Social Security Institute (NSSI) saying that the Institute is planning to "steal" BGN 100 million from pensioners by raising pensions by 10% instead of 11% as of July 1. According to Vassilev, each pensioner will lose BGN 8 every month until next year's increase. The two called for an extraordinary sitting of Parliament to obligate the NSSI and the government to implement the budget.

Bulgaria applies the Golden Swiss rule, which provides for an annual pension adjustment by 50% of the growth of the average contributory income and 50% of the previous year's inflation The proposed 10% increase reflects a drop in both inflation and contributory income.

Segabg.com says that when there is a discrepancy between projections and the latest data, the NSSI usually makes a political decision complying with the budget legislation. The online daily comments that GERB is trying to play up to pensioners. Denitsa Sacheva MP, who is on the party's list for the June 9 snap elections, said on Facebook on Sunday that pensions would increase by 11% instead of by 10% as calculated according to the Swiss rule. It is not clear why Sacheva, who is not on the Supervisory Board of the National Social Security Institute, made promises on its behalf, the daily comments. Sacheva blamed Vassilev, the finance minister of the Nikolay Denkov government, of political gimmickry. The NSSI will make a decision on May 14.

Duma has an editorial comment on pensions, stressing that GERB often boasts of increases in pension and welfare benefits before elections.

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The State Reserve and Wartime Stocks State Agency, which holds tenders for fuels and critical commodities worth hundreds of millions of leva, seems to be an unattractive place to work, segabg.com reports. More than half of its 97 vacancies will be slashed and the money will go towards a 7% salary increase. This is over and above an increase provided by the Denkov government to the whole administration in a bid to deal with disproportions in pay. The Agency says the average monthly salary is BGN 1,575, about 35% lower than in similar positions in public administration.

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24 Chasa leads with a story about spending, saying that on a 100-day basis, Bulgarians spend 30% of their income on food, while people in Europe and the US spend 15% on food and housing is their largest single spending item.

HOME SCENE

The media cover an incident in which an 11-year-old boy wounded a 12-year-old girl with a pistol at a birthday party. According to one theory, the handgun was in the jacket pocket of the host of the party and the boy thought it was a toy. The girl underwent foot surgery and her life is not at risk. The boy's father, Yavor Bozhankov MP of Continue the Change, was not at the party.

Segabg.com quotes Regional Prosecutor Tihomir Shabov as saying that some 10 people out of 15 present on the scene were questioned and the handgun owner was arrested for 24 hours. He also said the pistol had been left on a bench in the yard.

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On Tuesday, the Burgas District Court starts hearing the case against Syrian national Omar Adnan, indicted for the murder of two policemen who tried to stop a bus with 48 illegal migrants in August 2022. The bus ploughed through a patrol car, killing the two policemen. The driver has already been sentenced to four years and 10 months in prison and a fine of BGN 11,000 for migrant trafficking. The parents of one of the victims told Nova TV they want a life sentence for the Syrian driver.

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Nova TV interviewed Dr Kostadin Sotirov after doctors suggested that children without mandatory vaccines cannot attend school. The discussion was prompted by a rise in pertussis cases. The general practitioner said the suggestion makes sense because children without those vaccines cannot attend kindergarten. Some 5,000 to 6,000 seriously ill children, who are exempted from vaccination every year, are at risk because their immunity is suppressed.

ANALYSES

24 Chasa has interviewed Assoc. Prof. Martin Ivanov from the Department of Sociology of Sofia University, who says Bulgaria is having one of its best periods in history now, in terms of quality of life and consumption. Some of his main points are: incomes in Bulgarian have increased from one third of the EU average upon accession in 2007 to two thirds now; the economy is doing well despite the current crises; and Bulgaria is seeing the end of a process which started in 1926-1927 when first death rates, and then birth rates, started falling to levels typical of the modern developed societies. Based on his study of inflation since 1750, other periods of well-being, though not comparable to the present, are the 1970s to the early 1980s, and the time after the Great Depression of the 1930s. Both these periods were subject to nostalgia. Also, around 1900, Bulgarians were nostalgic for the well-being in the Ottoman Empire in the 1860s and 1870s before the Liberation in 1878. Ivanov analyses the factors of steady growth in Bulgaria since the 1930s: changes in demography, investment in education, collectivization in agriculture, and integration into a larger economic area.

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In a Trud interview, historian Ivan Lazarov says there is not a normal country with a single history textbook. Lazarov, an associate professor, has been involved in textbook writing for over 30 years. Talking from experience as a university lecturer and scholar dealing with the theory, history and philosophy of history, he says it is "the biggest nonsense" to expect an objective history to be created, which will not be subject to various interpretations. He also talks about his studies of medieval Bulgaria, including cuisine, as well as about the false interpretation of fake heroes. Talking of myths, Lazarov says modern history has debunked the myth of the medieval Bulgarian King Ivaylo, touted by Marxist historians as "the leader of the first successful anti-feudal uprising in Europe," and the myth of Russia's mission as a liberator.