site.btaMedia Review: January 13

POLITICS

At the start of a crucial political week, the media report that President Rumen Radev is expected to announce when he will hand over the first mandate for forming a government to GERB-UDF.

The Head of State delayed the procedure to give the parties a chance to continue the negotiations. In early January, the first political force in Parliament, GERB-UDF, held a series of talks with the BSP-United Left and There Is Such a People (TISP) in search of support for a cabinet.

Before that, talks were also held with Democratic Bulgaria (DB), but they did not come to fruition. Without their support, GERB-UDF, BSP-United Left, and Slavi Trifonov's TISP do not have the necessary 121 votes.

Against this backdrop, the BSP National Council decided Sunday that the Left will sign an agreement to govern the country. And from a press release to the media it became clear that Ahmed Dogan’s Democracy, Rights and Freedoms (DRF) also held a meeting with the three formations, at which the possibilities of forming a parliamentary majority to elect a cabinet were discussed.

ECONOMY

Trud runs an overview of the real estate situation in Bulgaria. There is an extremely high interest in the purchase of expensive properties, BNB data shows. Loans granted by banks to households for amounts between BGN 500,000 and 1 million grew by a record 68.6% in 2024, and their number reached 2,654.

The majority of these loans were for the purchase of luxury properties. Some of the loans were taken for the purchase of an expensive car or to expand a business. But when giving such loans to individuals, banks most often also ask for real estate as collateral.

The average size of loans for amounts between BGN half a million and a million was BGN 635,000 (EUR 324,000), according to the latest data of the BNB. For such an amount plus the mandatory deductible, a luxury apartment in the centre of Sofia can be bought. The interest rates on mortgage loans are extremely low and the monthly payment for servicing such a loan is about BGN 2,600 if it is taken for the maximum period of 30 years allowed by the BNB. For a person who works in a managerial position in a large company or has their own business, it is not a problem to repay such a loan.

The BNB data shows that there is also a big growth in purchases of expensive apartments and houses with credit. Banks have granted 289 loans to citizens for over BGN 1 million each. The majority of these loans are also for the purchase of property. Within a year, these loans increased by nearly 53%.

There has also been a very large increase in smaller bank loans, which are large enough for the purchase of a spacious home in Sofia. Loans for amounts between BGN 250,000 and 500,000 increased by 53.7% in a year. The number of these loans increased by over 6,100, reaching 17,472.

Loans to households for amounts between BGN 100,000 and 250,000 also saw a very large increase. Within a year, they increased by 22.4%, or by almost 14,500 deals, and now total over 79,000. Most of these loans are also for house purchases.

In the case of smaller loans, the year-on-year growth is significantly more modest, and in the case of loans for amounts up to BGN 1,000, there is even a decline. In case of urgent need for small amounts of money, people use credit cards and the services of quick credit companies. However, there are over 1.19 million bank loans for amounts below BGN 1,000 in the country.

*

The fact that there are two different minimal wages in Bulgaria as of January 1, 2025 is already creating problems in the education system, 24 Chasa writes. "School and kindergarten directors are facing a series of difficulties with regard to the implementation of the decision of the Council of Ministers to change the minimum wage from January 1," the chairman of the Union of Directors in the system of public education, Diyan Stamatov, alerted on Facebook.

As of January 1, a decree of the Council of Ministers raised the minimum wage for the country to BGN 1,077, or 15.4% more. This is the lowest wage for the private sector and all workers on contract in the public sector. However, for civil servants working on a temporary contract, the minimum wage remained at BGN 933 until a new budget is adopted or the matter is settled in an extension law, which should specify their remuneration.

Stamatov points out that although there is a decision of the Council of Ministers to change the minimum wage, there is no budget to ensure the payment of the envisaged increase.

*

BNT had Mariana Kukusheva, President of the National Union of Bakers and Confectioners on its morning show. She talked about the restored 20% VAT rate for bread and flour from January 1. The VAT rate for bread and flour was reduced to 0% during the pandemic years.

"Zero VAT on bread is extremely important not for our industry, but for Bulgarian consumers, because this is an anti-inflationary social measure, which is aimed at investing in the entire population of the country,” she said.

Mariana Kukusheva is of the opinion that under the zero VAT on bread, the shady part of the sector has shrunk, and the industry has paid record taxes to the treasury.

"When we are talking about a desired 3% inflation for joining the eurozone, when Minister Lyudmila Petkova at a meeting of the budget committee announces official Eurostat data on 32% grey economy in Bulgaria, with a 20% tax on the price of bread and flour, it means an increase in the grey sector in these two industries, especially in bread producers," Kukusheva noted.

She is adamant that more expensive bread increases inflationary pressure.

*

24 Chasa writes that Lukoil is selling the biggest asset it has left in Europe - the oil refinery in Burgas. The Russian company started looking for a buyer two years ago. At that time, they said that various options were being discussed and would be analysed with the help of international consultants.

A denouement of this two-year saga is expected soon - more clarity on the deal may be available after March, when the evaluation of submitted bids will be completed, sources familiar with the sale process say. According to unofficial information, there are 7 or 8 companies left in the final round. That is, there is no shortage of bidders, but the problem is that few of them are acceptable.

WINTER CONDITIONS

After the snowfall, all roads are passable and the winter conditions are normal, the Road Infrastructure Agency (RIA) said, quoted by Monday’s media. Temperatures are negative. There are snow-covered, icy stretches that continue to be treated. There are no sections that are impassable. Over 100 snow-clearing machines have been working on the roads in Sofia region. Due to the heavy snowfall, the RIA started to restrict the movement of heavy trucks in the mountain passes. Meanwhile, the municipalities of Karnobat and Ruen declared a non-school day.

LOS ANGELES BLAZE

bTV publishes details about the fires that have been ravaging Los Angeles, shared by Bulgarian Lia Atanasova, who lives in the LA suburbs. There have been three fires around her neighbourhood, and so far people have not been evacuated. 

"The situation here is still bad, but thanks to our tireless firefighters it is getting better every day. In some places even evacuation orders have been lifted and people can go home. The weather is very changeable and you just don't know what is going to happen - that is one of the dangers," she told bTV, adding that she and her neighbours are always on standby.

"You always have to be ready to go - with suitcases packed if you have to. We go further south if we have friends, acquaintances, even a hotel - somewhere away from the fires. We're all in a situation where we make a plan in advance of who we can go to if we need to."

She said at the moment the flames are moving away from her neighbourhood, going east, and the air is gradually starting to clear.

"The first day it happened, we couldn’t go outside, the sky was black, the buildings were yellow, it was absolutely catastrophic and scary, but as the days have gone by, my area has cleared up and now we're just keeping an eye on the other areas and praying for our family and friends," Lia added.