site.btaMedia Review: November 12

OVERVIEW

All media report on the ongoing situation with the Lukoil refinery in Burgas, on the Black Sea, after the US Department of the Treasury's Office of Foreign Assets Control expanded its sanctions on Lukoil in late October. Another dominant topic is the 2026 draft state budget and reactions to it.

POLITICS

Energy expert Martin Vladimirov of the Center for the Study of Democracy, said in an interview for Nova TV that a special administrator of Lukoil could have been appointed on October 22, as there is currently legislation in place that allows for this. Their job would be to manage the company's assets in order to ensure security of supply. Under the newly adopted legislation, the decisions of the future administrator are not subject to judicial review, which could be the subject of an arbitration claim by Russia. Vladimirov specified that the selection of a special administrator should be carried out through an open competition, with candidates presenting their visions. The entire selection process can be completed within 48 hours. The expert added: "Expanding the powers of the person holding this position is necessary, but the US Treasury Department must first grant a postponement of sanctions. The rush should not be for excessive powers but to obtain a general license to manage the assets. I have no explanation for the delay in appointing a special administrator. I suppose a six-month deferral will be requested."

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Member of the Economic and Social Council and former minister of economy and minister of labour Lydia Shuleva said in an interview for bTV that the draft budget for 2026 proposed by the government is based on a philosophy of spending without sufficient fiscal discipline. Shuleva pointed out that the 2026 draft budget provides for expenditure amounting to 45.8% of GDP, which goes against the Public Finance Act that sets a maximum threshold of 40%. The former minister warned: "For years, we kept spending between 37% and 38%, with a maximum of 40%. Now we are at 45%, which is a dangerous precedent."

According to Shuleva, new loans worth BGN 20.5 billion (around EUR 10.5 billion) are planned for 2026, which will triple interest expenses on debt servicing. She said that another serious problem is the unjustified increase in public sector wages, which exceeds the actual inflation rate. "With inflation at 3.5%, we have wage increases of 12, 15, even 50% in some sectors. There is no link between efficiency and remuneration," she commented.

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Atanas Katsarchev, Chief Economist of the Podkrepa Labour Confederation, warned in an interview for bTV that the 2026 draft budget may contribute to price spikes and higher inflation. Katsarchev sided with the Confederation of Independent Trade Unions in Bulgaria, who was absolutely opposed to potentially raising the VAT. He stated: "If VAT goes up by 2%, that means more inflation, more poverty, since it affects absolutely everyone." He continued: "If we go back to the budget, what are our concerns? There is a 5% increase in wages and an additional 0.8% social security burden on these wages. Accordingly, we have about 1.5% to 2% increase in the minimum wage from BGN 1,077 to BGN 1,213, depending on the administration. And it will turn out in the end that we effectively have a 2.5% increase in salaries by the skin of our teeth at 5% reported inflation or higher."

Vice President of the Bulgarian Industrial Association Maria Mincheva said in the same interview: "For us, the bigger problem is the introduction of requirements that will place a significant burden on companies. Apart from the 2% social security contributions and the dividend tax, there are two requirements related to the introduction of sales management software. There is a requirement that all shipments of goods with high fiscal risk be tracked. Both conditions are extremely difficult, practically impossible to fulfil, especially within the deadlines they have set. As a result, companies will have to raise their prices. And these are the things that should concern us – how these measures related to the control of legitimate business will lead to an increase in end prices, which will raise inflation even more."

In an interview for bTV, constitutional judge Atanas Semov said: "What we have been doing for the past 36 years is an extraordinarily controversial process marked by extremes, which has long since ceased to be a transformation and has become a deformation." Semov believes that two factors stand in Bulgaria's way, and they are our typical national psychological characteristics. "One is waiting for someone else to fix us, and the other is always looking for someone else to blame. For us, someone else is always to blame. We are the land of the innocent, which is why we neither punish the guilty nor change our rules, so that there will be no more guilty parties."

The judge pointed out that despite that, the Bulgarian economy has grown fivefold over the past 25 years. He added: "It is an indisputable fact that the standard of living of a significant portion of the Bulgarian population has improved. However, it is also an indisputable fact that an unacceptable number of people live in poor conditions, including below the social minimum. And this is not poor in comparison with the most successful nations we have joined in the EU, but poor in comparison with the most normal human understanding of reasonable living conditions." The judge criticized the country's political elite for letting down the public by allowing a state of severe lawlessness.

ECONOMY

An article in Trud warns that the potential introduction of system that monitors the shipments of high fiscal risk goods by truck would likely lead to higher food prices. Fourteen organizations representing companies from the food and beverage industry united against the Finance Ministry's proposed changes to the Tax and Social Insurance Procedure Code, part of the 2026 draft budget, that stipulate that when transporting goods with high fiscal risk, the carrier or the company organizing the transport must equip the vehicle with a device that allows automated provision of data on the vehicle's movement and location to the National Revenue Agency. Trud's article reads: "In practice, the proposal means that all vehicles transporting raw materials for our industry, such as sugar, coffee, meat, cocoa, fruit, vegetables, etc., to be equipped with special software from the National Revenue Agency in order to carry out their activities, according to the position of 14 industry organizations from the food and beverage industry, sent to the Council of Ministers, the Ministry of Finance, the Ministry of Agriculture and Food, and the relevant parliamentary committees. The list of goods that pose a risk to the state treasury is approved by the Minister of Finance and includes many staple foods such as meat, milk, cream, sugar, butter, eggs, coffee, peanuts, basic fruits and vegetables, as well as some building materials."

According to the industry organizations, this requirement is practically impossible to meet with the current long-established logistics models, where foreign freight forwarders and transport companies are usually used to import goods from the EU or third countries in order to reduce costs. There is no legal or practical possibility to require all freight forwarders and transport companies outside the country to install and maintain specific Bulgarian software, as well as to train their drivers and employees to work with it, especially in Bulgarian.

WASTE MANAGEMENT

An article published in Mediapool.bg under the title "Business dissatisfied: Someone wants to monopolize waste with unaffordable eco-taxes and a state deposit system" reads: "Various industries have once again spoken out against the government's intention to organize on its own the deposit system for packaging waste. The reason is that this would allow the State to administer recycling and completely control access to secondary raw materials, while also being able to introduce arbitrary fees for the deposit paid by consumers for plastic and glass bottles and aluminium cans. Combined with the planned postponement until January 1, 2026, of the household waste fee based on the amount of waste disposed of by households, the problem of packaging pollution will worsen, and a two-member family will be deprived of at least BGN 100 per year. In addition, consumers will continue to pay unreasonable eco-taxes on the price of the cars, electrical appliances, and electronics they purchase, unilaterally changed by licensed organizations from the Ministry of Environment, which does not bother to check how they work and what happens to the recycled waste. Organizations representing brewers, soft drink manufacturers, electrical appliance and tobacco product manufacturers, large retail chains involved in textile recycling, and consumer associations have spoken out in favour of adequate environmental policies in waste management. They are opposed to simply charging buyers of goods with vaguely defined taxes, which are several times higher than the taxes in the rest of Europe, and against a waste collection fee that is spent on playgrounds, green spaces, and other small municipal projects, rather than on waste management and reuse in industry and on the production of new packaging."

Valeri Govedarov representing the supermarket chain Kaufland reported that since it introduced its own system for separate collection of bottles and cans two years ago, the company has secured 800 tonnes of recycling material and has paid its customers more than BGN 1.8 million, as each returned can or bottle pays BGN 0.05.

Maria Krasteva of the Environment Agency Austria shared that there is one recycle bin per every 360 people in Bulgaria, while that ratio in Austria is 40 bins per the same number of people.

HEALTHCARE

Petya Georgieva, senior economist at the Institute for Market Economics, told the Bulgarian National Radio that some 1.9 million Bulgarians lack easy access to a pharmacy. Even though some 3,600 pharmacies operate across the country, most of them are located in the larger cities and settlements. People living in the 5,000 or so smaller settlements in the country suffer from limited access to a wide range of public services, with access to medicines being one of them.

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bTV quotes Dr Radostina Alexandrova of the Institute of Experimental Morphology, Pathology and Anthropology with Museum at the Bulgarian Academy of Sciences who said in one of her talks that the COVID-19 pandemic was neither the first pandemic nor the last one in human history. The expert said: "Viruses are constantly changing and adapting, which is their way of adjusting to environmental conditions. Their main task is to reproduce, spread, and survive. This is why viruses are always looking for new hosts." Viruses can attack not just humans and animals but also plants and bacteria. Paradoxically, technological development and progress such as the emergence of the first cities, trade and military campaigns have enabled diseases to spread more easily.

SOCIETY

Duma quotes Dr Plamen Maslarski, who reported in an interview for Nova TV that children and their families are increasingly stressed. Among the reasons for this are the gap between expectations and reality, and the excessive ambitions imposed on children from a very young age. The paediatrician said: "New technologies have changed the way we live and play. Children are increasingly isolated, they do not interact with their peers, and stress is affecting their health. Stress is generally beneficial—it is a necessary reaction of the body. What is harmful is constant stress, known as distress, which alters a child's psyche, immunity, habits, and routine, leading to serious consequences." The medical expert advised parents to put their kids to sleep between 8 and 9 p.m. and to limit them from using electronic devices.