site.btaMedia Review: October 7

HIGHLIGHTS

Tensions in the Middle East a year to the day after the October 7 Hamas cross-border attack into Israel, Bulgaria's budget, and the upcoming parliamentary elections are some of the highlights in Monday's news media.

MIDDLE EAST CRISIS

Interviewed by Trud, Israeli Ambassador Yosef Levi Sfari says that while every country has a duty to protect its citizens, Israel failed to prevent the atrocities and pogroms of October 7, 2023. Asked to comment on the international community's blaming of Israel for the humanitarian crisis in Gaza in response to the attack and hostages held by Hamas, the diplomat said the figure cited by the health authorities of the Hamas-controlled enclave - more than 40,000 people killed in Gaza, many of them children - cannot be confirmed, and many studies show it is manipulated and exaggerated. For instance, there is no distinction between terrorists and civilians, including men aged 16 to 18 who are recruited by Hamas and are considered children. He added that according to international experts, the ratio of civilian to combatant casualties is very low compared to other urban wars (e.g. the battle against ISIS in Iraq), especially given that the Gaza Strip is densely populated. Iran, Lebanon, cooperation with some of the moderate Arab countries and possible solutions to the Israel-Hamas conflict are other topics discussed by the diplomat. Asked to comment on the weaponized Hezbollah pagers and Hungary's implication of Bulgaria in the operation, Ambassador Levi Sfari said Israel has not claimed any responsibility for the attack and all the information he held came from the media. The Bulgarian services were adamant that the exploding pagers in Lebanon were not imported, exported or manufactured in Bulgaria.

Mediapool.bg writes about Israel's commemoration of its deadliest day since the State was established in 1948. President Isaac Herzog is scheduled to lead a ceremony to remember victims of the war against Hamas in Sderot, one of the worst hit cities. Families of hostages still held captive in the Gaza Strip are planning a rally demanding their return.

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Rumyana Bachvarova, former deputy prime minister and former ambassador to Israel, told the Bulgarian National Television (BNT) that the Bulgarian authorities' reaction to the escalation of the Middle East conflict was timely and adequate. The meetings of the government's Security Council and the Consultative Council on National Security with the President are the best options in critical situations. While Bulgaria is not in the zone of direct threat, the global environment is changing and no one can feel completely secure, she said, adding: "We cannot even imagine what to expect."

Bulgaria's former foreign minister Nickolay Mladenov, who was also the UN special coordinator for the Middle East Peace Process, told Nova TV that although the tensions are very likely to continue escalating in the coming days, there is still a chance to prevent a war through very firm action by both the international community and the belligerents. Now is the time for the Lebanese political leaders to overcome their differences with outside help and rebuild the institutions. Mladenov warned that Bulgaria should be aware of possible migrant pressure from North Africa.

Former foreign minister Nadezhda Neynsky told bTV that "Israel won regional wars three times but never managed to win peace. The Palestinians, on the other hand, are losing, but cannot find the formula for peace, either. The confrontation between Israel and Iran is now in a very acute phase, but whatever happens, even an attack on nuclear or oil facilities, it is clear that neither Iran will destroy Israel nor Israel will destroy Iran." Neynsky said a diplomatic shuttle is a possible peace formula and US Secretary of State Antony Blinken has conducted shuttle diplomacy.

BULGARIA'S OCT. 27 PARLIAMENTARY ELECTIONS

Mathematician and election expert Mihail Konstantinov tells Trud that seven parties are expected to win seats in Parliament in the October 27 snap elections. The latest polls give GERB about 70 seats in the 240-seat Parliament. Vazrazhdane and Continue the Change - Democratic Bulgaria are likely to return 44 MPs each. As to the two factions of the Movement for Rights and Freedoms (MRF), the Alliance for Rights and Freedoms loyal to Honorary Chairman Ahmed Dogan could win 22 seats, while the MRF-New Beginning led by Delyan Peevski could win 20, although the situation will most likely be reversed by Election Day. The Bulgarian Socialist Party and There Is Such a People (TISP) could also win 20 seats each. In practice, only one coalition is realistic according to Prof Konstantinov: one made up of GERB, CC-DB and MRF-New Beginning. "Politics is geography plus mathematics, and when wars are being fought very close to you, only geopolitics plays a role in the formation of a government," he says.

A MarketLinks poll commissioned by bTV and published on October 4 showed a parliament of six parties, leaving TISP below the 4% electoral threshold, Trud says.

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On bTV, political analysts Slavi Vasilev, Georgi Harizanov and Svetoslav Malinov commented on the election campaign.  Vasilev opined that voter turnout will be around the record low 34% registered at the June 9 elections, and that the next majority, if there is one, will again be centred around Peevski and GERB leader Boyko Borisov. Prof Malinov stressed that CC-DB keep talking about an expert cabinet or a non-partisan prime minister. Harizanov noted that GERB and CC-DB have been sending the same messages, the difference being that there are people who know how to govern, and enthusiasts who are again going to elections not knowing how to run the country and are using marketing ploys.

ECONOMY

A signed analysis in 24chasa.bg says the BGN 18 billion gap between revenues and expenditures calls for policies which are extremely unpopular for a country which has been in election mode for over three years now. Last Friday, Deputy Prime Minister and Finance Minister Lyudmila Petkova announced that her team had drawn up revenue and spending measures which she would discuss with parties, employers and trade unions, but she would definitely propose a 3% budget deficit. The finance minister of a previous caretaker government, Rositsa Velkova, said a 3% deficit was impossible and mentioned 6%, while a specially commissioned analysis warned that the three-year freefall would lead to an 8%-plus deficit. Petkova did not announce any of the required unpopular measures. The most effective one would be an increase in the VAT rate, the analyst says. Other measures could be returning the standard 20% VAT rate for all industries, some of which are charged 9% VAT now; contracting more debt; freezing pensions and wages for at least a year or indexing incomes by 2% instead of by 10%; streamlining the public administration, which could also start paying its own social security contributions; and taxing companies' windfall profits.

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Economic and financial analyst Mihail Krastev commented on BNT on Finance Ministry data showing that in just one month, the budget deficit increased by more than 50%. At this rate, if the investment expenditure target is met, the 3% deficit cap required for joining the euro area will be exceeded. To avoid this, those investments will not be made yet again.

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Interviewed by the Bulgarian National Radio, Dimitar Georgiev, an international market analyst, said that until tensions in the Middle East subside, oil prices will remain higher than they were last week. He predicted a short and gradual rise in the price of petrol and diesel in Bulgaria in the next few weeks, after which prices will return to the current levels or will be even lower. The world is waiting for Israel's response to Iran's attack, the big question is whether they will hit Iran's oil fields. "The main scenario is that the attack would be on military sites in Iran and would be moderate," he said.

Commenting on Bulgaria's budget, Georgiev said one way to balance the budget is not by increasing taxes but by curbing spending, i.e. by gradually withdrawing the state from the economy. Instead of raising pensions every year at the expense of a budget deficit, the government should aim for sustainable economic growth by reducing the obstacles to doing business, the financial expert said, adding that Bulgaria has a serious problem attracting both foreign and domestic investments.

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Duma leads with the government's plans to stick to a 3% budget deficit, which is a requirement for entry in the euro area. The National Social Security Institute has already presented an analysis with options for reducing the deficit in the social security budget. They include a gradual increase in social security contributions by 5%, or an annual increase in pensions only in line with the inflation rate. (Now the Swiss rule is applied, according to which pensions are adjusted annually by 50% of the previous year's inflation and 50% of the growth of the average contributory income.) While the government is aiming for up to 3% inflation to please Brussels, pensions will be effectively frozen.

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24 Chasa reports that after the boom in mortgage loans, which grew by 25% in a year to BGN 22 billion, the Bulgarian National Bank (BNB) has introduced new rules. The financial institutions are to finance a maximum of 85% of the purchase of a property, reduce the repayment period to 30 years, and require that loan payments should not exceed half of the borrower's monthly income. The rules apply only to new loans. BNB Governor Dimitar Radev said the aim is to curb credit expansion and to protect people from excessive indebtedness.

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In a Trud article, Latchezar Bogdanov, Chief Economist at the Institute for Market Economics, looks at labour market imbalances in Bulgaria and possible solutions. The Employment Agency's latest survey found that businesses will need 243,000 university graduates and 244,000 people with secondary education in the next three to five years. Employers increasingly rely on older workers. In 2023, one in four employees was aged 55 or over, up from 18.3% in 2013. After 2021, employees aged 55 or over outnumbered those aged 35 or under. The unemployment rate dropped threefold in the last ten years to 4.3% of the population aged 15 or over in 2023 and is well below the EU average. The possible short-term solutions which would bring several tens of thousands of working-age people back into the workforce include more places in kindergartens in Sofia, long-term care services for people in need, and broader dual education. The long-term solutions include not just better education, healthcare, social infrastructure and quality of life, but investment in new technology and capital, which requires an institutional environment conducive to entrepreneurship and innovation.

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Trud leads with a story headlined "Europe Caps Appliances' Power Consumption". From May 2025, devices in standby and off mode must not consume more than 0.5 watts under the European Commission's Regulation 2023/826. The Bulgarian government has published for public consultation an ordinance on the ecodesign requirements for electrical appliances.

SOCIETY

Psychologist Plamen Dimitrov says in 24 Chasa that communism has inured Bulgarians to helplessness. Some of the main points of the interview are that the cross-generational transmission of anxiety is a proven reality; 75% of somatic diseases are related to stress, the way people cope with it and a lack of life skills; 62% of young people are optimistic, but it is a different matter how their hope translates into practices and habits. He talks about anxiety among young people, which is reflected in the findings of a recent Trend agency survey: one in four say they have experienced physical aggression, one in five have seen online aggression, and more than one in ten respondents have been victims of domestic violence. Also, 15% of young people are highly dependent on gambling, betting and loans. Some 20% take all kinds of supplements, steroids or laughing gas, meaning that they are not coping with reality.

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Nova TV interviewed former MP Maria Cappone, who complained about long queues and missed flights at Sofia Airport. She said traffic on morning flights had been very heavy, with 14 to 16 departures, for a month now. The first queue forms when passengers check in their luggage, the second queue is between the security scan and the lift. Her flight was 15 minutes late, but about 20 people at the gate could not board it.