site.btaMedia Review: July 2

EFFORTS TO FORM CABINET

On Monday, prime minister-designate Rosen Zhelyazkov, received the first mandate to form a government from President Rumen Radev and returned a folder with names of the ministers in the future cabinet. The draft cabinet will be voted through in Parliament on Wednesday. 
 
All the ministers in the draft government of Rosen Zhelyazkov are personally selected by GERB leader Boyko Borissov, not by Movement for Rights and Freedoms (MRF) chairman Delyan Peevski, said Delyan Dobrev, who is nominated for energy minister in the GERB cabinet on bTV. Dobrev also said: “We will probably be elected with a very small majority and we may end up as kamikazes. If I am replaced by tomorrow and I am not a minister, there will be no problem for me." 

On Tuesday morning nominees for ministers in the GERB cabinet made appearances on the three national TV broadcasters. Denitsa Sacheva, nominated for social minister, spoke on Bulgarian National Television, and Daniel Mitov - nominated as foreign minister - on Nova TV.

All three reiterated that this is a minority government and they are looking for broad support. They did not specify from whom they expected to get it.

Daniel Mitov said he did not know whether the government would be supported by the MRF in parliament, although some ministers are believed to have been named personally by Peevski.

"We reached out to all parties for talks on priorities. With some we cannot find common ground, but with others we can, for example with Continue the Change- Democratic Bulgaria (CC-DB). But they started behaving like political observers and analysts instead of being politicians. There are very clear goals for the country, which GERB has been striving for during its governments. Because of inadequate decisions in the last 3 years, the payments under the National Recovery and Resilience Plan are frozen. We also need to take Bulgaria off the grey list of the group that oversees money laundering," he said.

Denitsa Sacheva believes it is possible to make changes to the nominee for ministers in the draft cabinet, but when a political party declares support. In her opinion, MPs of CC-DB can give a symbolic support.

"There can be no mismatched coalitions, there can be no simultaneous pursuit of left and right policies," said Sacheva.

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TrudNews interviews Kuzman Iliev, economist and leader of Bulgaria Can on the eve of the vote on GERB's proposed minority government, as there are still many unknowns.

Officially GERB can only rely on the firm support of the Movement for Rights and Freedoms (MRF). Continue the Change-Democratic Bulgaria (CC-DB), Vazrazhdane, the Bulgarian Socialist Party (BSP) and There Is Such a People (TISP) refuse to support a cabinet on the first mandate. The position of Velichie remains unknown.

Iliev says that what Borissov wants to do is to signal to his own party that he will not take a step back and with such a statement allow other players in the next stages of negotiations and look flexible and moderate. He thinks Borissov is trying to kill two birds with one stone.

Asked what is possible between the proposed minority government of GERB, a programmatic government with experts, or an anti-GERB and MRF coalition, Kuzmanov says that the common denominator in all these ideas is the politics of shared irresponsibility. At some point, however, it becomes so obvious that the pressure on Borissov from within his own party is strong and he wants to take partial responsibility. Both to govern and not to govern. This thing is achieved in a very clever way and people are given the impression that GERB will be in a position of a minority government, when in fact it has a majority. This is because TISP are also open to support. And Velichie definitely took many steps back. Therefore, this government has an absolute majority. 
 
Borissov creates the illusion that he will govern only because there is no other option this is done very purposefully. The aim is to prevent any quick protests. CC-DB could bring down the cabinet and come back to power. This is why Borissov is refusing to demonstrate the full majority he actually has. It is an absolute illusion that this majority is not complete, it is even constitutional, says Kuzmanov.

Kuzmanov says that a broad anti-GERB and MRF coalition possible is a very far cry from reality.

RIFT WITHIN VELICHIE

Trud News reports of a possible break-up of the seventh-largest parliamentary group, Velichie. According to sources, there are now two factions in parliament - that of leader Nikolay Markov and of ideologist Ivelin Mihailov. At a press conference on Wednesday Mikhailov is likely to announce that 5 MPs from the parliamentary group will split. These are Nikolay Markov, the deputy chairmen of the parliamentary group Darin Georgiev and Georgi Kukov, musician Etien Levy and Victoria Vassileva, the former right hand of the leader of There Is Such a People Slavi Trifonov.

On Monday, Ivelin Mihailov complained that he had been attacked by other MPs in the party and told he would be "destroyed". Mihailov explained that the threats came after a conversation with the group's leadership.

"Our MPs say they could provide me with international protection, solve my problems, people who until yesterday did not have a single penny will solve problems for millions," he explained. "Yes, threats to me mainly that if something didn't happen as they wanted it, I would be destroyed" he said.

He speculated that MPs from Velichie would vote for a government within the 50th National Assembly, but expects that to happen on the third mandate if it goes to There Is Such a People. But those who were prepared to vote for that government are still a minority. 

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24 Chasa writes that Velichie is torn by scandals over who should be its chairman and whether to support GERB after it became clear from several interviews on Tuesday morning of Ivelin Mihailov, who is considered the ideologist. Mihailov told Nova TV that Nikolay Markov threatened him with physical destruction.

He revealed that initially the idea of MPs from Velichie was to support a third mandate. "I have a recording saying that they will support a programmatic government," he added. Mikhailov made the recording because there were threats to give up the party's leadership.
 
MP Victoria Vassileva had said that if they did not make Nikolai Markov chairman, they would be destroyed. Speaking on Bulgarian National Radio minutes later, Mihailov explained that five MPs from Velichie were initially willing to support Rosen Zhelyazkov's cabinet. 

EUROZONE ACCESSION

Speaking from Sintra, on the sidelines of the annual ECB forum, Bulgarian National Bank Governor Dimitar Radev told 24 Chasa that Bulgaria's accession to the euro area is not on the official agenda, as the ECB just published the convergence report for Bulgaria. Asked about his expectation about when Bulgaria will join the euro area – in 2025 or 2026, Radev said that Bulgaria is in the 80th minute of the game and is leading 3-1. The year 2026 would mean a new match. “Let's focus on winning it, then July 1 or September 1 will be a secondary issue, said Radev.

Of that counter-corruption commission’s decision that deputy governor Andrey Gyurov is incompatible with the position he holds, Radev said that Gyurov has appealed the decision in court and that the central bank will act in accordance with the court's decision. Radev clarified that the bank’s Board can only initiate a dismissal procedure, which is then subject to judicial review, and a final decision is taken by Parliament.

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Speaking on bTV former finance minister Milen Velchev said that budget discipline should be respected as much as possible, spending should be restructured and a lower budget deficit should be achieved.” We are in for tough times and perhaps some form of financial crisis in the euro area, stemming from the poor budgetary situation of a number of countries, combined with political instability. In both Italy and France, budget deficits are several times higher than necessary. Budget cuts are coming and if they do not, a financial storm is on the way, which may affect us too."

In Velchev's words, a caretaker government would also cope with Bulgaria’s eurozone accession, but it is better to have a stable regular government with a horizon of at least a year. According to him, the government needs to monitor inflation every month and find the right moment to ask for an extraordinary convergence report.

In his words, if we have to find fault with the government for the current inflation level, it is the excessive budget spending over the last one or two years.

BULGARIA-SERBIA RELATIONS

24 Chasa interviews outgoing Serbian Ambassador to Sofia Jeljko Jovic who catalogues the achievements of his five-year tenure and the issues that plague relations between the two countries. His term was marked by an increase of annual bilateral trade from under EUR 1 billion in 2019 to nearly EUR 2 billion in 2023, large infrastructure projects and boosted cultural exchange.

Asked whether because developments in North Macedonia and Kosovo the two countries remain politically distant, the diplomat says: “I would not say that there is distance or disagreement at the highest political level. The worsening political and security situation worldwide, the events in Ukraine and the Middle East have led to other issues and topics taking centre stage in the foreign policy of most countries, and this has also affected our bilateral relations. Also, the lack of a stable government in Bulgaria, which is otherwise a prerequisite for better and more intensive cooperation between the two countries, has had an impact.

So it may seem that we have moved a little bit slower in the past year in terms of bilateral relations. On the other hand, it is a fact that Bulgaria on three issues of strategic importance to us - the bid to host the EXPO 2027, the membership of Kosovo in the Council of Europe and the UN resolution on Srebrenica - has taken a position completely contrary to Serbia's interests.
 
And I can’t say that we are happy. When it comes to North Macedonia, I have heard more than once that Bulgarian analysts and experts on regional events accuse Serbia of having some influence and dictating what the government of North Macedonia should do. I can only say that such positions are not based on arguments, but on arbitrary and malign interpretations.“

DEVELOPMENTS IN FRANCE

Capital Daily looks at the aftermath of the first round of elections in France, saying that development in France could trigger the next eurozone crisis.

After the first round on 30 June, Marine Le Pen's far-right party dealt a serious blow to President Emmanuel Macron's centrist alliance. This brought France closer to a potential nationalist government. After an unusually high turnout, the National Rally (RN) party won nearly 33.2% of the vote, while the left-wing New Popular Front alliance came second with 28%. Macron's alliance received 22.4% of the vote. 

"Our Europe is mortal, it could die", warned Emmanuel Macron at the end of April. Who could have guessed that just a few weeks later, the President of France would try to prove his point by calling snap elections, the results of which threaten to plunge the entire EU into a dangerous crisis? The attention of Europe, and much of the rest of the world, is now focused on the immediate political dramas in France.
 
After the first round on 30 June, Marine Le Pen's far-right party dealt a serious blow to President Emmanuel Macron's centrist alliance. This brought France closer to a potential nationalist government. After an unusually high turnout, the National Rally (RN) party won nearly 33.2% of the vote, while the left-wing New Popular Front alliance came second with 28%. Macron's alliance received 22.4% of the vote.

In the best case, however, France could end up with a parliament dominated by the political extremes, which could lead to a period of prolonged instability.

At worst, a government of Le Pen's far-right National Rally could be elected, and this would lead to the implementation of wasteful and nationalist policies that would quickly trigger an economic and social crisis in France.

The French meltdown will quickly become an EU problem. There will be two main transmission mechanisms. The first is fiscal. The second is diplomatic, notes Financial Times. France has financial problems - the national debt is 110% of GDP and the current government ran a budget deficit of 5.5% of GDP last year.

Worryingly, both the far right and the far left - which actually won a combined total of over 60% of the vote in the first round - are committed to big spending increases and tax cuts that would balloon the debt and deficit while breaking EU rules.