site.btaMedia Review: July 23

GOVERNMENT PUSHES MEASURES TO CONTROL PRICES DURING EURO SWITCHOVER

Efforts by the government to control prices during the euro switchover and the reaction of businesses dominate Thursday media.

Under amendments to the Introduction of the Euro in the Republic of Bulgaria Act, submitted by the cabinet retailers may not raise the prices of goods or services, unless there are objective economic factors to do so, until the end of 2026. Those who do not comply with these requirements may face financial penalties, which will depend on their turnover for the previous financial year.

The amendments stipulate that the period of dual pricing of goods and services in leva and euro will start on August 8, 2025, and end on December 31, 2026. In case of non-compliance, legal entities and sole traders face a financial sanction of BGN 5,000 to BGN 100,000 for a first offence. In case of repeated violation the fines would range from BGN 10,000 to BGN 200,000.

Also, the government may lay down rules and conditions introducing temporary measures to counteract excessive price increases for goods and services.

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The hefty fines for unjustified price increases related to the euro adoption will take effect a month later than originally planned, not on August 8 as proposed by the government’s draft. This became clear during a session of the parliamentary Budget Committee, which approved at first reading the draft amendments to the Introduction of the Euro in the Republic of Bulgaria Act.

The new provisions explicitly state that merchants are not allowed to raise prices until the end of 2026 without objective economic reasons, such as rising costs of raw materials, fuel, energy, wage increases, or force majeure circumstances. The fines range from BGN 1,000 to 10,000, or up to 0.5% of turnover for a first offense and 1% for a repeat violation.

It will be stipulated that during the first month of the dual pricing period, non-compliant merchants will receive recommendations but will not be fined, said Delyan Dobrev, chairman of the Budget Committee.

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Also, on Thursday the government is expected to approve the establishment of a state-owned commercial company, tasked with conducting socially oriented trade.

The company will operate under the Ministry of Agriculture, and in its retail outlets, essential goods and products produced in Bulgaria will be sold with a minimal markup of 10%.

This state retail chain is being created following provisions in this year’s budget. An agreement is also expected to be signed with the Central Cooperative Union, which operates stores nationwide, including in small towns where people have limited access to large retail chains.

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The state’s price control measures give institutions the power to destroy businesses, warned Yana Stratieva from the Food and Beverages Association in an interview on Nova TV. Her concerns come in response to the emergency amendments.

Merchants are alarmed by the extraordinary powers granted to the government to regulate prices. “We are extremely worried about the measures being adopted by the state to combat price speculation during the euro adoption,” Stratieva said. “The new law states that traders cannot increase the prices of goods and services unless there are objective economic factors. This applies to every single company.”

The definition of “objective economic factors” is very broad and gives state institutions a great deal of discretion,” she added, warning that such interventions could have serious consequences for businesses, especially in sectors like food and retail.

Yana Stratieva, called for the two controversial provisions in the law, for freezing prices and for granting broad powers to the Council of Ministers, to be postponed and revised. 

Former chair of the Commission for Consumer Protection (CPC), Dimitar Margaritov, argued that the state cannot remain passive during the process of adopting the euro—but in this case, he says, the government is going too far. He pointed out that the Council of Ministers has been granted unrestricted powers to make decisions at any time that can affect pricing, including setting price ceilings.

Margaritov acknowledged that no institution is capable of monitoring every single business establishment, but that doesn’t mean measures shouldn’t be taken. He stressed the importance of having clear guidelines: what exactly is being controlled, what is being inspected, and what sanctions apply.

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Interviewed on Bulgarian National Radio interview, MP Martin Dimitrov of Continue the Change-Democratic Bulgaria, commented on the amendments to the Introduction of the Euro Act, which increase penalties for unfair traders and grant the state and regulatory bodies direct powers to intervene in the market. The business sector is expected to comply with these regulations starting August 8.

Dimitrov said: "There are provisions that are scandalous. What power does the Consumer Protection Commission have to monitor pricing nationwide, inspect, and impose fines up to 2% of turnover? Extraordinary powers are being granted to the Council of Ministers to introduce all sorts of measures in cases of excessive price hikes, just like in dictatorships, such as setting price caps and fixing markups. No government in a parliamentary republic should have such authority!"

Martin Dimitrov commented that Croatia has already tried similar left-wing measures, including what is called “turbo competition,” where retail chains report their prices daily, but these efforts failed to reduce prices. In Bulgaria, the proposal is to publish prices on a weekly basis, which Dimitrov considers less effective. He believes that the proper solution is to have such a website to increase transparency, but the real control over prices should come from the market itself, not from the state. The bill bans businesses from raising prices without objective economic reasons from August 8 until the end of 2026. Dimitrov fears that this approach will divide businesses into “good” and “bad,” with the government potentially targeting those it considers “bad,” which he finds very concerning and likens to police-state tactics.

Of plans to create state-owned stores, Dimitrov said this is a terrible mistake. He recalled that state-run shops existed during the times of Todor Zhivkov and Zhan Videnov but did not help to reduce prices; instead, they created problems and additional expenses. According to Dimitrov, no country in the European Union has established state-run stores with the goal of lowering prices.

REVERSE MIGRATION PROGRAMME

Sega.bg reproduces an analysis by the Institute of Market Economics, reporting that Bulgaria’s Ministry of Labor and Social Policy has launched a new programme, “I Choose Bulgaria”, aimed at encouraging Bulgarians living abroad to return home. The program is funded with BGN 150 million (around EUR 75 million) under the EU-backed Human Resources Development Program 2021–2027. While the initiative intends to support reintegration, its cost-effectiveness is already being questioned, especially in light of reports that it may only result in 870 returnees, amounting to roughly BGN 172,000 per person.

In recent decades, emigration has been a major contributor to Bulgaria's negative net migration rate. However, this trend began to reverse after the COVID-19 pandemic. According to the National Statistical Institute (NSI) data, as of 2024, the number of working-age Bulgarians returning to the country exceeds those leaving by approximately 5,500 people.

The "I Choose Bulgaria" program provides: relocation assistance for returning families,  rent subsidies for up to 12 months, enrollment in employment programs via the Employment Agency,  transport cost assistance to and from the workplace and two performance bonuses upon maintaining employment, one of 30% of six average salaries in the sector and the other of 50% of six average salaries after a longer period of job retention. 

Despite the seemingly generous support, critics argue that the cost per returnee is disproportionately high, and the program lacks the strategic depth of more successful return migration policies seen in countries like Poland, Portugal, or the Baltic states. These nations have combined economic incentives with systemic reforms in education, healthcare, business environment, and diaspora engagement.

Analysts suggest that without improvements in the long-term quality of life, governance, and institutional trust, financial incentives alone may not be enough to motivate large-scale return migration, or ensure that returnees actually stay.

According to the analysis, while the positive migration trend is encouraging, “spending BGN 150 million for fewer than a thousand returnees raises serious concerns about the efficiency, scale, and sustainability of Bulgaria's return migration policy.”

The program does not set clear eligibility requirements related to employment or economic contribution. This absence means it risks becoming a mechanism for misdirected spending—providing funds to returnees regardless of whether they remain active in the labor market. Budget forecasts estimate that between 740 and 870 participants will take part, but without conditions ensuring labor market integration, the program’s impact on economic revitalization is questionable.

Other EU member states, including Italy, Portugal, and Greece, also implement reverse migration policies, but they generally rely on fiscal incentives. These primarily involve significant reductions in income tax burdens for returnees and partial coverage of relocation expenses. While some of these programs target highly qualified specialists, others have broader scopes. Crucially, all are designed with an emphasis on economic rationality and measurable outcomes. For instance, Italy’s tax relief schemes benefit between 2,000 and 5,000 people annually, while Portugal has seen over 30,000 returnees since 2019 under its similar policies.

This comparative perspective highlights that Bulgaria’s program may lack the strategic design and economic incentives that have proven effective elsewhere in Europe.

AHMED DOGAN ANNOUNCES ESTABLISHMENT OF NEW PARTY

In a political declaration signed on Tuesday, former Movement for Rights and Freedoms (MRF) honorary chairman Ahmed Dogan announced that the Movement has been captured by his rival Delyan Peevski and laid out a concrete plan to establish a new political party, Sega.bg reported. According to the publication, in effect, Dogan is admitting that he has lost the battle for control of the party to the leader of the MRF-New Beginning.

The announcement was poorly received by his supporters. Members of a Facebook group, named “I Support Ahmed Dogan”, directly accused him of handing the party over to Peevski when he made him chairman and now shirking political responsibility.

In the document, Dogan states that the current situation marks “one of the most critical moments in the history of MRF.” He writes: “Today, however, with pain and responsibility, I declare that MRF has been hijacked. The party has been taken over from within by individuals who are not connected to its historical legacy, do not uphold its moral code, and do not serve its electorate. The figure of Delyan Peevski, lacking political legitimacy, ideological consistency, and burdened with deep dependencies—managed to seize control of the party’s leadership through methods that have nothing to do with democracy: threats, pressure, dependencies, institutional capture, and abuse of power.”

According to Dogan, under Peevski’s leadership, MRF has “strayed from its roots, become a tool for personal and oligarchic interests,” and “the state’s repressive apparatus has begun to be used against anyone who dares to express a different opinion.”

Dogan proposes a three-month transitional period during which the groundwork will be laid for establishing a political entity that will be founded on the protection of minority rights, inclusion in real politics, preservation of ethnic peace, and upholding Bulgaria's national sovereignty. During this period, Dogan’s faction will be led by two central bodies: a Leaders’ Council, Headed by MEP Ilhan Kyuchyuk and a Central Operative Bureau, chaired by Taner Ali. 

Notably, Ahmed Dogan does not specify what role, if any, he will play during this transitional period. In fact, his declaration does not mention whether he will be directly involved in the formation of the new political party he proposes. This ambiguity raises questions among supporters and observers about the depth of his commitment and whether he intends to return to active political leadership or remain in the background.

In his declaration, Dogan also addresses the European Parliament, international institutions, and foreign embassies in Bulgaria, calling for their support. 

SOFIA MUNICIPALITY FAILS TO CHANGE SERVICING BANK DURING INITIAL ATTEMPT

Mediapool.bg reports that with the help of a municipal councilor from Continue the Change and the votes of GERB, BSP, There Is Such a People (TISP), defectors from Vazrazhdane, and Carlos Contrera, the plan of Sofia Mayor Vasil Terziev to change the municipality’s servicing bank has been foiled.

In a report to the municipal council, Terziev proposed that the city’s funds (current budget totals nearly BGN 3 billion) be withdrawn from Municipal Bank. His idea was to choose a new servicing financial institution after requesting offers from the five largest banks in the country.

A few days ago, Ivaylo Mirchev, co-chair of Yes, Bulgaria, commented that he anticipated an attack against Vasil Terziev because of the proposal and added that "there are all kinds of indications" that part of the ownership of Municipal Bank "is linked to businessmen close to [Delyan] Peevski."

The vote revealed yet another crack in the coalition between Continue the Change (CC), Democratic Bulgaria (DB), and Mayor Vasil Terziev. Unofficially, councilors from DB expressed dissatisfaction with the actions of their colleague from CC and the lack of response from the party. Later, one of Mayor Terziev’s closest associates, his deputy for finance, Ivan Vasilev, accused CC councilors of helping the "economic majority", made up of GERB, BSP, TISP, defectors from Vazrazhdane, and Carlos Contrera from VMRO with two key decisions: one concerning the replacement of the boards of major municipal companies, and the other now, the thwarting of the plan to move Sofia’s funds out of Municipal Bank.

Opposition came from an unexpected place. Blagovesta Kenarova from Continue the Change argued that there wasn’t enough information and proposed that the item be removed from the agenda of the municipal council’s Finance Committee. With this move, Terziev’s proposal was automatically excluded from the agenda of the full City Council meeting scheduled for Thursday.