site.btaMedia Review: October 31

OVERVIEW

The topic that dominates Friday’s media is the 2026 State Budget.

STATE BUDGET

Duma daily’s front page article says that the Bulgarian Socialist Party (BSP) managed to secure a minimum monthly wage of EUR 620 and maternity benefits for the second year of leave of EUR 460, which represents an almost 15% increase from the current rate. In addition, mothers who return to work during their second year of maternity leave receive 75% of the benefit, up from 50% at present, in addition to the wage they will be earning. For municipalities, EUR 980 million has been allocated for the capital and investment programme. The 2026 State Budget and the budgets of the National Health Insurance Fund and the Public Social Insurance are to be introduced into the National Assembly next week.

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Trade unions and employers argued over the parameters set in the 2026 State Budget on Nova TV’s morning programme. Confederation of Independent Trade Unions in Bulgaria (CITUB) President Plamen Dimitrov and Bulgarian Industrial Capital Association General Assembly Chair Vasil Velev gave different assessments of the effect of the increase in social security contributions and the minimum wage. “Private sector workers will pay for the increases in public sector salaries," Velev said. According to his calculations, with a salary of BGN 2,000, if the total social security burden increases by 3 percentage points, the worker will receive about BGN 58 less in net remuneration. He warned that this increase would reduce the possibility of wage increases and could lead to layoffs and bankruptcies in weaker companies. According to Dimitrov, some companies have the opportunity to offset the additional costs through part of their profits, which are expected to exceed BGN 65 billion in 2025. He added that companies that perform well can allocate funds for better remuneration, while for those that are losing money, the risk of difficulties is real.

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Bulgarian National Television’s (BNT) morning programme had a discussion on the failure of the ruling coalition to submit the 2026 State Budget for debate in parliament, even though the deadline was October 31. The consideration of the most important law has been postponed until next week after last-minute amendments were introduced that brought the minimum wage up to the levels specified in the law and found money to increase maternity benefits in the second year. Podkrepa Confederation of Labour chief economist Atanas Katsarchev, former social minister Hristina Hristova and Bulgarian Industrial Capital Association Executive Director Dobrin Ivanov criticized the parameters of the budget’s financial framework. According to them, the distribution of state funds will create complex problems to be solved next year. In their words, there is no revenue in the state, and that is where the whole distortion in the system begins.

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Former finance minister Simeon Dyankov told bTV’s morning programme that “the budget is still not ready, and I believe there are two reasons for this. The first is the very broad coalition, the Bulgarian Socialist Party, on the left, is proposing a series of last-minute changes to taxes and the way the budget is managed. There Is Such a People is trying to maintain right-wing discipline behind the scenes. In the centre, GERB and MRF-New Beginning want to show a social budget.” Dyankov added, "I don't think there is anyone in Bulgaria who is naive enough to believe that this year's and next year's budgets will have a 3% deficit. All kinds of tricks will be used to hide the real deficit.”

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In an interview with Bulgarian National Radio (BNR), financial expert and economist Rumen Galabinov, former deputy chair of the Financial Supervision Commission, warned that Bulgaria will remain last in the EU and the eurozone in terms of minimum wage, even after joining the euro area. In 2026 Germany, the hourly rate is expected to be EUR 14.50, while Bulgaria’s would be about EUR 7. Galabinov said Bulgaria will still lag behind Hungary by about EUR 100 per month and Romania by over EUR 200. He added that changes in the minimum wage also affect social security contributions and other payments in the system. Regarding tax reform, Galabinov commented on the discussion started by the trade unions about abolishing Bulgaria’s flat 10% income tax. One proposal is to raise it to 15% with a non-taxable minimum, while another suggests introducing a progressive tax system, as in most EU countries. He also said that many businesses already use offshore zones, and that around 600,000 people officially earn the minimum wage, though some may actually receive more unofficially. Galabinov suggested that public sector employees could start paying 50% of their own social contributions “to ease the burden on social systems”, noting that the state currently covers 30% of the deficits in the pension and healthcare systems.

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Duma reports on the opinion expressed by Deputy Prime Minister Atanas Zafirov, leader of BSP–United Left, at a discussion organized by the Podkrepa Confederation of Labour and the Friedrich Ebert Foundation, that Bulgaria will remain the only EU country with a flat tax system and that a tax reform is urgently needed. “We will remain the only country in the EU with a flat tax. This is simply absurd," Zafirov said. He argued that the change requires broad public and union support and could be implemented in the 2027 budget, not in 2026. Zafirov linked the reform to the need for better pay in the public sector, including restoring the years of service bonus, which would cost about BGN 250 million. He said Bulgaria must move away from outdated models and called for political, civic, and union unity to ensure fair wages and a more just tax system. 

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Capital weekly’s frontpage article is titled A Crying Game with Financial Stability and talks about the fragility of the country’s financial system. If the deficit policy is not interrupted as early as the 2026 budget, the government will have to choose between raising taxes and/or abandoning the idea of keeping public finances under control, the article reads. With populist increases in wages and pensions for years, those in power have been running deficits in years of growth. This was the moment to cut public spending, but instead, the government is sharply increasing social security contributions, thus dealing a blow to all private companies. The loosening of fiscal policy threatens to break the economy. If the state is generous at the expense of higher taxes, it competes more and more noticeably with business for resources - money and people - and begins to "push out" private investment. In the short term, such a policy creates a false sense of enrichment among voters, but in the long term it generates inflation and erodes growth potential. "We spend like students in a nightclub, we spend a lot of money and that's how we grow. But what needs to grow, investment and exports, is down," an unnamed economist at an international institution that monitors Bulgaria said. This situation is described by the term sugar rush—the economy receives a short-term, artificial boost, similar to the energy rush a person gets after consuming a lot of sugar. However, this sugar rush does not come from real improvements in indicators such as higher productivity, innovation, or better business practices. Instead, it is usually due to large government spending, which mainly stimulates consumption. And, logically, once the sugar rush wears off, the economy will slow down. "This short-term thinking can easily keep politicians in power but does not help the economy develop as well as we would like," Plamen Dimitrov, Country Manager at Coface, says. Thus, despite high growth, Bulgaria remains the poorest country in the EU, if we take GDP per capita as a measure of wealth.

LUKOIL

In an interview for BNR energy expert and former economy and energy deputy minister Yavor Kuyumdzhiev warned that if the sale of Lukoil’s assets is not approved, Bulgaria could face a fuel crisis. He explained that the deal involves Gunvor buying Lukoil International, which is registered in Vienna and owns the Bulgarian subsidiary. Therefore, Bulgaria has no authority over the transaction, only the European Commission’s antitrust body can approve it. Kuyumdzhiev said that if the Burgas refinery were to close, the region’s remaining refineries in Romania and Greece would be unable to meet Bulgaria’s fuel demand. According to the Bulgarian Petroleum and Gas Association, supplying the country would require about 360 tanker trucks daily, which the region doesn’t have. He added that while a fuel shortage is unlikely, prices would certainly rise if the deal is blocked.

BUSINESS

Capital Business reports that EnduroSat opens the largest space centre on the Balkans with an additional USD 104 million from investors - leading global funds, including Google Ventures and Riot Ventures. The company has opened a new space centre on Tsarigradsko Shose, six times larger than the previous one. Raycho Raychev founder and CEO of EnduroSat does not like to talk about future goals in numbers. That is why, for him, growth is measured in other ways. "It means that within three years, we will be the company with the largest capacity to build any type of space infrastructure in Europe. It means that even when compared to Airbus and other giants, the number of satellites and missions we carry out, and the speed with which we carry them out, will be twice their combined result per year." EnduroSat plans to make space data accessible by lowering its price to one dollar per gigabyte. "My dream is to make space data universally accessible and to ensure that Europe has one of the most powerful defence systems in terms of prevention, early warning systems, intelligence systems, border surveillance systems on a whole new level, because this guarantees the future of democracy. Democracy cannot be defended with heated posts on social media," Raychev said.

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Capital Business carries an interview with the CEO of the biggest producer of solar power in Bulgaria, Sunterra Renewable Energy, in which he speaks about hybrid stations, battery energy storage systems and the potential of the sector. Emil Shopov says that the future of energy is in its intelligent storage and preservation, and that batteries are changing the rules of the game, they play the role of “energy moderator”.

ECONOMY

Mediapool.bg has an article on a BGN 20 million public tender to build a new information system for the National Palace of Culture (NDK) in Sofia and the Festival and Congress Centre (FCC) in Varna won by telecom company A1, effectively the only viable bidder, after the other company in the tender, Katmar 13, was disqualified. Interestingly, it has participated in numerous public tenders but has not won a single one so far. The A1 mobile operator, in response to Mediapool.bg’s questions, points out that the experience they have gained from "over 1,000 successfully implemented ICT projects in the past year and the expertise of our team gives us confidence that we can handle the implementation of this order as well." The tender includes items like LED screens costing BGN 650,000 each, turnstiles for BGN 50,000, and mobile access devices for BGN 5,200, which experts say are vastly overpriced. “The devices must meet strict information security criteria, which requires their additional adaptation," A1 said in its response to Mediapool.bg regarding prices. Funding is not yet secured and depends on EU approval of Bulgaria’s revised Recovery and Resilience Plan, which would redirect money from home renovation projects. Critics also note that similar systems were already installed during NDK’s 2018 renovation, raising questions about why new ones are needed. The project has drawn scrutiny amid past corruption allegations involving NDK’s management.

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Segabg.com has an article on a controversial public tender for a EUR 1.4 million social media campaign to inform citizens about the introduction of the euro. PR and advertising associations accuse the Finance Ministry of serious irregularities, as the tender was announced only 60 days before the euro’s launch, with an unusually short 10-day deadline and a non-transparent direct negotiation with just five little-known companies lacking relevant experience. Industry groups and experts, including PR specialist Lyubomir Alamanov, condemned the move as a mockery of professional standards and a waste of time, saying the ministry had ignored years of warnings to start the campaign earlier. They demand a transparent and open procedure, warning that the delay may have been intentional to justify the restricted selection process.

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Telegraf daily’s front page runs an article about the increase in the number of cars, real estate and investment gold sold before the euro changeover in the country. The reason for this is the expected rise in prices, which according to Lyubomir Dorosiev, Chair of the Executive Board of the Association of Automobile Importers in Bulgaria (ABA), is unlikely. The article focuses mainly on cars, with a boom of sales in August when Dorosiev personally sold more than 20 cars, which is a 50% rise in comparison to the previous month. People have taken out the cash from under the mattresses and are buying, Dorosiev added, but the situation will go back to normal.  “It’s not true that we are Western Europe’s morgue,” Dorosiev said. 70% prefer to buy a used car, while 30% prefer to buy a new one.

ECONOMY AND HEALTH

Dnevnik.bg has an article on the proposed changes by the European Commission to the EU excise directive that would significantly raise tobacco taxes, leading to a sharp increase in cigarette prices in Bulgaria. The goal is to reduce smoking rates in the EU to below 5% by 2040, while Bulgaria currently has the highest smoking rate in the EU, about 29% of adults smoke daily. Finance Minister Temenuzhka Petkova expressed concern that such a steep tax hike could boost illegal cigarette trade. Health experts agree that higher prices help reduce smoking, especially among youth, but warn that the increase should be gradual, not sudden. According to Mihail Okoliyski, health expert and long-time representative of the World Health Organization in Bulgaria, the country ranks first in the EU in terms of deaths from stroke and heart attack, and with the reduction in smoking, these diseases will decline. The problem is that the state is not only failing but even refusing to control the sale of tobacco products to minors, drawing an analogy with the ban on nitrous oxide and the continuing cases of its use. "We banned laughing gas. Now we want to ban social media. It's like using a cannon to kill a mosquito. These measures don't work at all because no one controls them, there are no real sanctions," Okoliyski said. Under the proposal, Bulgaria’s tobacco excise tax would almost double, from EUR 100 to around EUR 180–215 per 1,000 cigarettes by 2028. Senior Researcher at the Institute for Market Economics Petar Ganev cautions that such a rise could recreate problems seen in 2009, when high taxes caused a surge in the black market. According to Ganev, the big question is whether revenues will be put at risk by the expansion of the illegal market. He sees it as logical for Bulgaria to negotiate the pace of growth of the excise duty. The European Commission estimates that the reform could generate EUR 15 billion in extra annual tax revenue and save EUR 6 billion in healthcare costs across the EU.

HEALTH

The front page of the 24 Chasa daily reports on a game changing way to treat a stroke. A new clot-dissolving drug has been shown to be significantly better at treating ischaemic stroke than existing therapies, Dimitar Maslarov, Professor in Neurology at the Medical University of Sofia and head of the Neurology Clinic at University First Multiprofile Hospital for Active Treatment in Sofia said at a discussion on brain health. As stroke is one of the leading causes of death and the leading preventable cause of disability, the right care can save both lives and quality of life. The quicker the signs are recognized and medical care, and the new therapy is sought, the higher the likelihood of a successful recovery.