site.btaMedia Review: June 5

CONVERGENCE REPORTS

In two separate reports published on Wednesday, the European Commission (EC) and the European Central Bank (ECB) concluded that Bulgaria is prepared to join the euro area on January 1, 2026. This is a leading topic in the national media.

According to 24 Chasa, the EC has found that Bulgaria meets the four nominal criteria for a country to be considered prepared to adopt the euro as its national currency. Also, Bulgarian legislation is found to be compatible with the Treaty and the Statute of the European System of Central Banks and of the ECB. The ECB says that since 2024, Bulgaria has made considerable progress in its economic convergence with the euro area. The Council of the European Union is expected on July 8 to grant final approval for the country’s euro area entry. The daily notes that the process cannot be blocked by a veto imposed by another state. Under the EU Treaty, an euro area accession decision requires a voting majority of at least 55% of the Council members, representing at least 65% of the population. That is, even if one or two countries vote against, they cannot stop Bulgaria from becoming an euro area member. Boyan Nikolaev, Deputy Executive Director of the Confederation of Employers and Industrialists in Bulgaria (KRIB), tells 24 Chasa in an interview that “the euro is good both for industrialists and for your grandparents in the countryside.” According to Nikolaev, Bulgaria is joining an economy worth EUR 16 trillion, which will ensure the country’s stability. He says it will be crucial to attract two groups of investors: large financial funds and startup funding facilities.

Speaking on bTV’s morning talk show on Thursday, Foreign Minister Georg Georgiev said that June 4 was the latest step in a consistent policy which Bulgaria has been pursuing for decades. “For years on end, Bulgaria has shown that it handles public resources in a very conservative manner and has invested in policies with which to convince our European partners that we are a reliable nation and an integral part of the EU and its institutions,” Georgiev said. He noted that a number of laws necessary for euro area membership became a fact after the GERB party, the dominant force in the present government, made a major concession and its leader Boyko Borissov gave up his rightful place at the helm of the government. Commenting on President Rumen Radev’s silence about the convergence reports, the Foreign Minister said: “I don’t think it is right for the head of state to keep silent at such an important moment as we make the last step of our European integration.” Georgiev also said that June 4 placed Bulgaria “among the main economic, financial and fiscal forces, a country which will be much more appealing to foreign investors, a country which will be a safe destination for people’s money.”

Duma quotes EC President Ursula von der Leyen as saying: “Thanks to the euro, Bulgaria's economy will become stronger, with more trade with euro area partners, foreign direct investment, access to finance, quality jobs and real incomes. And Bulgaria will take its rightful place in shaping the decisions at the heart of the euro area. Congratulations, Bulgaria!” Commenting on fears that inflation will start to rise as soon as the convergence reports are published, experts said that no such process has been witnessed so far, the daily says.

Trud says that, from now on, the sum total appearing on cash receipts issued at retail outlets may be printed both in leva and in euro. This is an option, not a requirement, according to a government ordinance. The prices of individual products should still be printed in the Bulgarian currency. After January 1, 2026, the price of each purchased item should be in euro, and the total may be in euro and leva. The lev may be used in stores for only a month after the adoption of the euro. Afterwards, payments will be made only in euro. The Bulgarian National Bank, the commercial banks and many post offices will continue to exchange leva for euro at no charge for a few more months. But it is advisable to get rid of any lev-denominated cash by the time retailers stop accepting it. This practically means that, as of today, people have less than eight months to clear up any cash they have in leva, the daily says. It notes that some stores have already started showing product prices in both leva and euro.

POLITICS

With presidential elections due in Bulgaria by the autumn of 2026 at the latest, 24 Chasa and Trud quote political scientist Ognyan Minchev as saying in a Facebook post that he favours the idea of a single presidential candidate of the democratic community. To legitimize the nomination, it will be necessary to devise an algorithm for some kind of primary elections, Minchev suggests. According to him, the nomination of a strong single candidate requires that the democratic parties sign an agreement, which ought to be joined by influential civic organizations to broaden the representative base of the campaign. The candidate should not be affiliated with any political party. A democratic candidate’s bid for the presidency cannot be successful without political concessions (partial, regulated, publicly framed) to one of the two other political camps, the “Eurasian” camp and the “oligarchic” forces.

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The Veliko Tarnovo Appellate Court’s denial of a commutation request from Dessislava Ivancheva, the former mayor of Sofia’s Mladost Borough who is serving a sentence for corruption, is discussed in a signed comment published on SegaBG.com. According to the author, Ivancheva’s request to be released from prison one year early was followed by a months-long review process which turned into a second trial against her. She fell victim to institutional harassment, the article says. The delay and the reluctance of courts in two districts to hear the case was “totally outrageous.” One gets the impression that since Ivancheva is the only success of the prosecution service in fighting “high-level” corruption, she must be left in jail as an embodiment of this fragile victory, the author says. In an appeal to the second-instance court, Ivancheva’s lawyer noted that the ruling of the Lovech District Court referred extensively to the reasoning of the prison administration, which objected to the convict’s early release. At the same time, the court gave only a couple of brief quotes from the defence.

By contrast, convicted cocaine baron Evelin “Brendo” Banev will serve only 10 and a half years of his prison term following a 10-year commutation, the story goes. Former prosecutor Andrei Yankulov commented: “I guess we will know very soon how Mr Banev is reforming and correcting his behaviour in jail, unlike Mrs Ivancheva, for example. Unlike her, who has to serve her full term because she is so incorrigible, he gets an early release.”

ECONOMY

A National Assembly decision to draw up a roadmap for a pension system reform is discussed in a Trud interview with economist Lyubomir Hristov. Asked whether such a reform is necessary, Hristov says that the MPs obviously think it is, judging from reports issued in 2024. The reports conclude that, first, pensions in Bulgaria are low, or are perceived that way, and second, there is a lasting public social insurance deficit, which is disturbing. According to Hristov, these are indisputable, well-known facts, but they are not the real problems of the pension system, just symptoms. As the reports fail to make an accurate diagnosis of the ailing system, the economist expects that a painful but useless therapy will be assigned, which can cost dearly to pensioners, socially insured people and all taxpayers. He says the real problem is that two pensions are worth less than one. A reduced public-social-insurance-contingent pension plus a pension from a universal pension fund are worth less than a single full pension of the former type.

FOREIGN RELATIONS

Transport Corridor 8 is “a weapon in the geopolitical face-off in the Balkans,” says an Italian author whose analysis is reproduced on MediaPool.bg. Francesco Martino works with the think-tank Osservatorio Balkani e Caucaso Transeuropa. He says that decades after the completion of the project design for Corridor 8, which is intended to link the Black Sea and the Adriatic Sea via Bulgaria, North Macedonia and Albania and to propel economic development and regional cooperation, there is a puzzle yet to be solved. Martino quotes a worker in the Bulgarian Black Sea port of Burgas as saying back in 2008: “Corridor 8 is little likely to be completed, ever. I think the Russians will not allow it... This is a game of political influence. Maybe the big players will let some goods be transported just so that the corridor can be mentioned here and there. But in reality, it will remain just a dream.”

Although steps have been made at the national level to carry on with the project, such as the recent unveiling of the upgraded railway line between Kumanovo and Beljakovce in North Macedonia, the overall framework for the project remains largely incomplete, particularly where the route runs across the national borders, the analyst says. Each country has followed its own strategy and has used different funding sources in recent years. Officially, the completion of the transport corridor is a priority for the governments in Sofia, Skopje and Tirana as an instrument of cooperation which will bring visible benefits for a region remaining on the fringe of Europe’s economic development. The slow pace of building Corridor 8 and the authorities’ lack of determination, however, put its potential at risk, Martino says.

Since Russia invaded Ukraine and the Black Sea became a conflict zone, geopolitical and strategic considerations have had an increasingly strong impact on the development of the transport corridor, he notes. In addition to the anxieties of the present day, there are longstanding strategic considerations. This is one of the oldest “races” in the Balkans, driven by conflicting interests between the East-West axis, traditionally favoured by Bulgaria, and the North-South axis, which is important for Greece and Serbia. North Macedonia is the vital point where the two axes cross. Added to this is China’s growing presence in the region. According to railway transport management expert Lyudmil Ivanov, the completion of the railway along Corridor 8 can hardly be expected before 2035-2040 – which is a whole eternity, geopolitically, Martino says.