site.btaMedia Review: June 29

ECONOMY

The adoption of Bulgaria's state budget for 2026 has become an epic saga which has lasted eight months and will take at least one more month until the third version of the budget scheme goes through, financier Dimitar Chobanov writes on Trud.bg. He notes that the previous two versions largely caused the latest coalition government to fall.

The current structure of the Bulgarian economy does not warrant the assumption that the pace of economic growth will be sustained, Chobanov argues. He says the Finance Ministry has forecast 2.6% GDP growth in 2026, implying a slowdown from 2025, when it stood at 3.1%. As before, final consumption is seen as the main growth driver as it is expected to increase by 3.5%. Investments (gross fixed capital formation) will expand by 3.3% after receiving a major boost through the state budget's capital expenditures, which are planned to go up by EUR 3.5 billion. This target amount is unlikely to be achieved in reality due to the short remaining periods of implementation of the projects under the Recovery and Resilience Plan.

The planned 2.9% increase in exports is largely contingent on external demand, particularly from the EU economies, which are Bulgaria's main export markets, Chobanov writes. At 4.5%, import growth is forecast to be highest among all expenditure items, which will contribute to an increase in the current account deficit. A double-deficit situation has lingered in the Bulgarian economy for some time now, with budgetary expansion driving consumption amid insufficient capacity of domestic production, which necessitates imports. Unemployment is expected to remain low. Salary growth is planned to slow to 8% due to an intended minor cut in personnel expenditures in the public-financed sector. Presumably, salary growth in the private sector will outpace income growth in the public sector, and consumers' purchasing power will increase, provided that the 4.3% inflation forecast materializes. But such an inflation rate is not very plausible, the expert says.

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"The Possible and the Impossible in Budget 2026," was the title of a discussion held during Monday's morning talk show on BNT1, the main channel of Bulgarian National Television. Petar Ganev of the Institute for Market Economics said the government is trying to convince everyone that the state budget for 2026, which is being debated at present, cannot be "salvaged", the proposed bill is what it is and cannot be changed overnight after two previous governments "did things to it"; we are already too late in the year. According to Garabed Minasyan of the Economic Research Institute at the Bulgarian Academy of Sciences, the proposed budget is too much mathematics and too little policy. Its philosophy is centred on "giving" without serious engagement, Minasyan said. "The numbers are conveniently adjusted without an earnest strategy for the future," he added.

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The news that small modular reactors (SMRs) will be included in Bulgaria's new energy strategy until 2050, being drafted by the Energy Ministry, is discussed in an analysis on this emerging nuclear fission technology published on MediaPool.bg. The Bulgarian website has worked on the topic in collaboration with other European media.

SMRs have a capacity of up to 300 MW, allow flexible management and adaptivity, and can be upgraded as needed. The analysis says that according to the International Atomic Energy Agency (IAEA), there are about 70 projects for six different types of SMRs worldwide, and only two operational SMRs: one on a Russian icebreaker ship and another one in China. The high interest in the technology can be explained with the growing demand for clean electricity and the development of data centres, AI infrastructure and cryptocurrency facilities.

Bulgaria has been discussing SMRs for five years now, but only private large-industry enterprises are working consistently for their introduction and examining concrete technological solutions. The Bulgarian Energy Holding (BEH) plans to commission an external company to make a comparative analysis of available SMR technologies and propose the most feasible of them for implementation in Bulgaria. The BEH will also compile a roadmap for the next steps and will write an environmental impact report. These and other activities are being financed with USD 1,164,213 by the United States Trade and Development Agency.

The Maritsa East coal mining complex in Southern Bulgaria has been considered as a possible site for installing SMRs. Private business is one step ahead of the government, with a joint venture set up between the local Blue Bird Energy and Poland's Synthos Green Energy. The Nuclear Regulatory Agency, assisted by the IAEA and the US Department of Energy, is preparing for the possible licensing of SMRs.

Reviewing developments in Romania, Czechia, France, Greece and Austria, the website quotes sources as suggesting that SMRs may be one big bubble as Europe seems unable to agree on a few joint projects to maximize scale and minimize costs. The chain of supply poses another challenge.

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Beginning on September 1, Bulgarians will be able to choose how the money from their pension accounts is invested, 24chasa.bg says. In a series of articles headlined "Getting Smart on Pensions", the website has started to explain to readers important matters related to the three-pillar pension system. Monday's article says that Bulgarians born after 1959 contribute 5% of their contributory income towards a second pension, which they will receive, on retirement, from a private universal pension fund (PUPF). An individual's money in a PUPF is entirely his own, as a bank deposit, unlike the first pillar of public social insurance. To increase their clients' retirement savings, PUPFs must meet a minimum profit requirement. Several safeguards are in place to ensure predictability of old-age income.

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Bulgaria should relax its entry visa requirement for Turkish travellers and should receive compensation from the European Commission for losing the Russian tourists who have stayed away for five years due to the sanctions against Moscow. "We are aware that this is a political matter, but the tourism sector is suffering from that," said Krasimir Stanev, CEO of resort operator Albena, as quoted on 24chasa.bg. He spoke to journalists after a general meeting of the company's shareholders on Saturday.

Albena alone has lost BGN 17 million (EUR 8.7 million) in potential tourism revenues due to the closure of the Russian source market, Stanev said. Holiday-makers from Russia used to spend 500,000 nights at accommodation establishments in the resort during the summer. The loss for the whole region of Dobrich amounts to BGN 50 million (EUR 25.6 million). Currently, there are 8,900 tourists in Albena, including Germans, Romanians, Scandinavians and Moldovans, said the operator's commercial manager Margita Todorova.

POLITICS

Despite being sanctioned for corruption under the US Global Magnitsky Act, Bulgarian MPs Delyan Peevski and Vladislav Goranov continue to receive their salaries via bank accounts, Dnevnik.bg reports. The rule is that US individuals and businesses may not conclude transactions with the sanctioned persons. Banks worldwide, including in Bulgaria, risk being sanctioned themselves if they fail to comply with the restrictions, the website says. The information was obtained from National Assembly Chair Mihaela Dotsova under the Access to Public Information Act. Dotsova told Dnevnik.bg that the legislature has not received official guidelines from government institutions, the Bulgarian National Bank or international finance organizations about how to pay salaries to Magnitsky-sanctioned persons.

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A proposal to transfer the secret police files committee to the Archives State Agency is described in a Trud.bg comment as "a quiet attempt to close down an institution of remembrance". The committee is in charge of vetting candidates for public office for possible affiliation with the communist-era political police, and its files are open to anyone with a research interest.

In the comment, constitutional law expert Borislav Tsekov says that the secret police files committee is "a symbol of the victory of truth over deception" and "a tribute to the victims who did not live long enough to see it work". Given everything that happened after the democratic changes of 1989, and since no lustration system was established for fear of compromising the peaceful transition and the state of national concord, all that is left is a historical commitment to disclose the truth, Tsekov says. He exclaims: "Keep your hands off the police files committee! Its archives belong to the citizens, not to another temporary power clique."

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Desislava Radeva, the wife of Prime Minister and former President Rumen Radev, has been awarded BGN 25,500 (approximately EUR 13,000) in non-pecuniary damages, including interest, for slanderous and offensive language used against her by a yellow-journalism website, SegaBG.com reports, covering a definitive high-court ruling dated June 24. Radeva's claim, lodged in June 2023, when her husband was serving as President of Bulgaria, was about 23 articles on a variety of topics. The articles referred to her in all sorts of ways as they discussed the clothes she wore and how much they cost, her personal relationship with Radev, her character, security guards, high-school years and health status.

Based on witness testimony, the court assumed that the articles were received negatively by the then First Lady, who closed in upon herself, refused to appear in public, could not sleep, lost her appetite and showed higher anxiety levels. The amount of financial compensation was tempered by a lack of proof of a cause-and-effect link between the website articles and Radeva's health issues. According to the judges, such symptoms as hypertension and persistent headaches could have been due to the First Lady's dynamic and challenging routine.