site.btaMedia Review: August 4

EURO CHANGEOVER COSTS

An analysis by Dimitar Chobanov, published by TrudNews.bg, looks into the one-time expenses that will be incurred by the Bulgarian National Bank, state institutions, the banking system, businesses, and households with the adoption of the euro and the changeover.

The minimum estimated cost to the Bulgarian economy from the introduction of the euro is 0.4% of the projected GDP for 2025. Including all businesses in the assessment and updating prices will likely lead to a higher figure. These costs have been estimated at between 0.5% and 0.7% of GDP for Lithuania, and between 0.5% and 1% for Croatia, while the average for countries that have joined the euro area is between 0.3% and 0.5% of GDP.

The contributions that Bulgaria must make to the capital of the European Central Bank (ECB) and the European Stability Mechanism (ESM) are determined based on the share of a country's economy and population relative to those of the European Union.

Currently, Bulgaria's share in the ECB's capital is almost 0.99%. The remaining part of the contribution due upon joining is just under BGN 200 million.

The expected annual contributions over the next five years to ESM are estimated to be between BGN 220 and 230 million.

These contributions represent a capital stake, which means they bring both rights and obligations, and additional contributions may also be required for both institutions.

One cost that cannot be quantified is the loss of the national currency. Another significant cost is the relinquishment of independent monetary policy.

Other substantial expenses for the Bulgarian National Bank (BNB) are related to the integration of its technical infrastructure with the Eurosystem. The most significant costs for the BNB stem from the replacement of banknotes and coins in levs with euros. 

The dual circulation period will require banks to maintain and store a larger stock of both lev and euro banknotes, reconfigure ATMs, and train staff on the new procedures and conversion rules, as well as on anti-fraud measures.

Furthermore, legal and administrative changes will be necessary, including the review of contracts, updates to financial statements, and compliance with regulatory requirements.

According to the Association of Banks in Bulgaria, the estimated costs for the banking system will be around BGN 400 million, based on data from the end of March 2025, which may be subject to revision.

The government faces significant administrative and operational costs, particularly in public services and communications. These include converting information systems within public administration, updating accounting software, and adjusting databases to operate in euros.

In addition, a public information campaign targeting both society and businesses must be conducted across multiple platforms to reach as wide an audience as possible. There must also be oversight to ensure compliance with legislation regarding the introduction of the euro.

Generally, the costs of transitioning to the euro are difficult to track, as they are often included within approved budgets and unlikely to be clearly separated. However, the time and resource expenses incurred by supporting firms should not be overlooked, and the aforementioned requirement has likely already increased the cost of the services they provide.

According to available data, the public information campaign for the euro adoption costs the state budget BGN 10 million.

Enterprises in the trade sector will bear a significant portion of the direct costs, they will need to upgrade their information systems and cash registers. According to the report, the number of these cash registers is at least 460,000, and there are at least 4,000 integrated automated management systems.

Households will incur so-called "soft" costs, which are difficult to quantify but can significantly impact public perception and trust.

DROUGHT RAVAGES FRUIT, BEE SECTORS

TrudNews.bg writes that farmers report zero fruit harvest due to drought and heatwaves. Bulgarian peaches, apples, and pears are nearly absent from the market this year. Imports mainly come from Greece, and traders are reportedly misleading customers with labels claiming Bulgarian origin, fruit growers told TrudNews.bg.

“About 90% report zero yield, and many of them have official reports confirming completely lost plantations at a 100% loss,” summarized Zhivka Grozdeva, a board member of the Bulgarian Fruit Growers Association, in an interview with TrudNews.bg. “The trees are drying out because there’s no irrigation, no access to water, and also due to diseases,” she explained. However, according to her, this is not the main reason for the lack of fruit harvest.

“First, we lost the entire fruit harvest in Bulgaria back in April. Around April 10-11, there were several days and nights with temperatures dropping to minus six or minus seven degrees Celsius. In many places, it was minus four or minus five degrees, which is devastating for fruit trees. At that time, the trees were in pre-flowering or flowering stages and were frozen by the low temperatures. All the fruit buds froze then,” she explained, pointing to this as the direct cause of why now there are no cherries, peaches, sour cherries, plums, or pears. “It’s the same with apples. Simply, the Bulgarian fruit harvest is completely lost. We also missed the apricot crop, which is among the most sensitive,” Grozdeva said. The trees are either fruitless or bear inedible fruit.

She said that producers are not turning to tropical trees, as the demand for their fruits is very low. “Figs and medlars cannot replace the traditional fruits for Bulgarians, nor can olives,” Grozdeva clarified.

At the same time, beekeepers warned that honey from the new harvest will increase in price by up to 20% due to poor yields this year caused by the cold spring, dry summer, and high bee mortality, reported our correspondent for Blagoevgrad and the region, Svetlana Vasileva.

“The minimum price for a jar of honey is BGN 15, but prices from the new harvest have already started to rise, most are being sold for BGN 18. Acacia honey production is the lowest this year,” said beekeepers from the Pirin region in an interview with Trud News.bg. They explained that drought is a major problem because it leads to a loss of forage for the bees.

“Because of all these problems, beekeepers will receive support. We have a promise from the Ministry of Agriculture,” explained Petkova.

Drought and low water reservoir levels are hindering the cultivation of watermelons and melons, even in regions traditionally known for growing them.

The heatwaves are also posing a serious threat to corn. Farmers warn that without urgent measures, parts of the crop may be completely lost, as zero yields are expected in some areas. They explain that irrigation systems are not functioning, and irrigation projects are delayed, leaving farmers to pin their hopes on rainfall.

According to data from the past week, the risk of wildfires has increased, primarily in agricultural lands and forested areas. There are now over 250 fire outbreaks per day, according to the General Directorate for Fire Safety and Civil Protection.

BULGARIA TO FACILITATE DIGITAL NOMADS

Bulgaria has established itself as a leading destination for digital nomads in Eastern Europe, offering the fastest internet in the region (over 100 Mbps), even in some remote mountain areas – and monthly rents under EUR 400. Cities like Bansko, Sofia, and Plovdiv have a dense network of coworking spaces where foreigners find not only stable WiFi, but also like-minded people from various nationalities. Many, however, choose mountain villages or the Black Sea coast, drawn by the beauty of Bulgarian nature and ideal conditions for remote work.

Starting at the end of 2025, Bulgaria will become even more accessible to nomads from around the world with a new specialized visa, making extended stays easier.

Interviewed on Bulgarian National Radio, Alexander Noutsov, Director of Strategy and Policy at the Bulgarian Entrepreneurial Association (BESCO) says: “In terms of duration, we're talking about one year, with the right to renew the visa for another year,” explains Noutsov. “So, a digital nomad could stay in Bulgaria for up to two years. It’s important to note that these individuals do not take jobs in Bulgaria, they work for foreign employers, have companies in third countries, or are freelancers, without the right to sign an employment contract with a local Bulgarian employer. They earn their income abroad but spend it here. To receive a visa, they must prove an annual income of at least 50 gross minimum wages from the previous year – around BGN 55,000 (approximately EUR 28,000).”

Unlike tourists, digital nomads with this visa will be able to sign long-term rental contracts, open bank accounts, and even invest in local startups, but they are still not allowed to work for Bulgarian companies.

The economic impact on Bulgaria could be significant. The country can expect at least 2,000 digital nomads annually from third countries, who could inject around BGN 30 million into the economy through spending on local goods and services. Benefits extend beyond just the financial aspect.

RETIREES KEY TO LABOUR MARKET

Referring to data from the National Social Security Institute (NSSI) TrudNews.bg reports that pensioners are helping to rescue the country’s labor market. Over 225,000 people in Bulgaria receive an individual pension for service and age, yet continue to work and are still insured. Additionally, many retirees work in the informal sector of the economy, receiving payment in cash without insurance contributions. Many retirees agree to such arrangements because they already receive a pension and are willing to work without being insured.

A large number of people receiving disability and survivor pensions also continue to work. Thus, the total number of working pensioners is likely around 350,000. There is a labor shortage in almost all sectors of the economy, and pensioners now represent a significant portion of the working population. Without their participation, the shortage of labor could become so severe that it may lead to a full-blown crisis in some areas due to the lack of personnel.

The highest number of pensioners for years of service and age are employed in the public sector – exactly 56,707. Over 19,000 retirees work in healthcare. This is one of the sectors where, without retirees, the shortage of personnel would be enormous. In the coming years, the problem in healthcare is expected to worsen, as more people reach retirement age.

Next in terms of the number of employed retirees are the retail trade and the security sector. Both rely heavily on pensioners to ensure enough workers are available. In retail alone, 16,755 retirees are employed, most of whom are women. Increasingly, retirees are found working at cash registers and behind counters in shops. Wages for these positions are not very high compared to other sectors, and employers cannot hire foreigners as salespeople or cashiers because they don’t speak Bulgarian. These roles require direct contact with customers, and can’t be filled by workers from Uzbekistan, Kyrgyzstan, Nepal, and India, who make up a large share of foreign labor in Bulgaria.

Many retirees also work in construction - 9,143 people, including 1,691 women. In public transportation, there are over 8,000 retired workers, and in the hospitality and restaurant sector, more than 6,000. A significant number also work in manufacturing, and 2,920 retirees are employed in education. In some communities, it would be impossible to find enough teachers without retirees.

THINK TANK CRITICIZES PLANNED INSURANCE CONTRIBUTIONS INCREASE

The Institute for Market Economics warns that raising social security contributions carries the risk of impoverishment, increasing the number of households below the poverty line, and exacerbating inequality.

This conclusion comes from an analysis on the topic of social security burden, which recalls that the medium-term budget forecast already includes an increase in the pension contribution by three percentage points by 2028.

In recent weeks, there has also been talk of a possible increase in health insurance contributions.

The analysis by the Institute for Market Economics, reproduced by the Bulgarian National Radio, 24 Chasa and TrudNews.bg, emphasizes that increasing the social security burden guarantees a decrease in disposable income, a rise in poverty, and a deterioration in the living standards of all workers and their families. The researchers conclude that in trying to ease the pressure on the pension fund, there is a high risk of creating problems that the social system will later have to resolve.

The Institute has assessed the impact of the planned rise in the social security burden on household budgets, using the latest available individual data from the 2023 Statistics on Income and Living Conditions.

In the calculations, the social security contribution for each employed person increases by three percentage points, up to the maximum insurable income. Based on this evaluation and using the 2023 income distribution, the average monthly loss in disposable income is estimated at 172 BGN, with the assumption that the impact on 2025 incomes would be even more severe.

As expected, the differences are substantial, with lower-income households losing a proportionally larger share of their income.

For high-income households, the impact of the change is relatively small due to the cap on insurable income, which is currently BG 4,130. However, the increase in contributions widens the gap between the highest-paid workers and everyone else, exacerbating income inequality.

US CHARGE BULGARIAN WITH ARMS TRAFFICKING

The United States has charged a Bulgarian arms trafficker and three other foreign nationals with conspiracy to distribute cocaine; conspiracy to possess firearms, including machineguns and destructive devices, in furtherance of a drug trafficking crime; and conspiracy to provide material support or resources to a foreign terrorist organization said the US Attorney’s Office.

As alleged in the indictment, since at least September 2022, Peter Dimitrov Mirchev, along with Kenyan national Elisha Odhiambo Asumo, Ugandan national Michael Katungi Mpeirwe, and Tanzanian national Subiro Osmund Mwapinga conspired to illegally supply military-grade weaponry to Mexican drug cartels, and in particular, the Cartel de Jalisco Nueva Generación (CJNG), one of Mexico’s most violent and prolific transnational criminal organizations. The weaponry included machineguns, rocket launchers, grenades, night vision equipment, sniper rifles, anti-personnel mines, and anti-aircraft weapons.

The defendants allegedly believed that the CJNG intended to use these weapons in furtherance of the illegal trafficking of large shipments of cocaine into the United States. On February 20, 2025, the CJNG was designated a Foreign Terrorist Organization under the Immigration and Nationality Act and as a Specially Designated Global Terrorist under Executive Order 13224. Arms sales to transnational criminal organizations like the CJNG are prohibited by virtually every country.

In a series of meetings with individuals claiming to represent the CJNG, Mirchev allegedly agreed to arrange, coordinate, and participate in illegal arms transactions while avoiding detection by international and U.S. law enforcement. Mirchev allegedly recruited Asumo to corruptly obtain an End-User Certificate (EUC) from a nation that would falsely claim a different end-user for the weapons. Asumo recruited Mpeirwe, who recruited Mwapinga. Together, they allegedly obtained an EUC from the United Republic of Tanzania authorizing the importation of AK-47s. As a test shipment, Mirchev and others then exported 50 AK-47 automatic assault rifles and accompanying magazines and ammunition from Bulgaria, using the EUC provided by Asumo, Mpeirwe, and Mwapinga, and intending that the weapons were actually received by the CJNG.

The defendants allegedly continued to conspire to supply drug cartels with even more weaponry, potentially including surface-to-air missiles, anti-aircraft drones, and the ZU-23 anti-aircraft weapon system. Mirchev allegedly created a list of weaponry for the CJNG totaling approximately EUR 53.7 million (approximately USD 58 million). Asumo, Mpeirwe, and Mwapinga allegedly agreed to again provide arms control documents designed to obscure that these weapons were intended for the CJNG.

According to court records, Mirchev was previously implicated in supplying arms to Viktor Bout, who was convicted at trial of conspiring to kill U.S. nationals, conspiring to kill U.S. officers and employees, conspiring to acquire and export anti-aircraft missiles; and conspiring to provide material support to a designated foreign terrorist organization.

Mirchev was arrested by Spanish authorities in Madrid on April 8 and is currently pending extradition to the United States

BULGARIAN CUSTOMS EMPLOY 20 SERVICE DOGS

Customs dogs at Bulgarian borders have seized 1 ton of drugs over the past 4 years, according to a report by 24 Chasa. The trained dogs have participated in some of the largest operations targeting cocaine and heroin trafficking conducted since 2021.

Most of the 20 tracking dogs currently working for the Customs Agency are trained to detect narcotics, while others are specialized in sniffing out currency, cigarettes, protected plants and animals, and even more exotic materials.

A specialist in dog training and field deployment told 24 Chasa that each dog can be trained to respond to a limited number of scents. Hunting breeds with strong senses of smell are most commonly used for service work. Dogs with a playful temperament and high energy levels are ideal, as they treat the search for contraband as a game.

“Noble lineage or special breeding is not a guarantee of success,” the Customs Agency says, adding that even mixed-breed dogs can become service animals.

Currently, most dogs working with the agency are of the Malinois breed — described as “playful, tough, and highly driven.”

Customs dogs in Bulgaria are trained at a special school in Balchik, which has been in operation since the end of 2003, the Customs Agency says. So far, over 100 sniffer dogs have been trained there to uncover drugs, tobacco products, and banknotes hidden in secret compartments. These dogs are prepared to work with customs officers at both border checkpoints and within the country.

Their trainers have completed courses in Germany and the Czech Republic, ensuring they follow international best practices.

A dog’s handler works with it daily to maintain its skills. Additionally, twice a year, each dog-handler team undergoes advanced refresher training.

The agency is currently working on officially establishing the role of “dog handler” as a formal job position within the customs system.

When the dogs retire, they often remain with their handlers. Customs officers typically request to keep their dogs, citing the strong bond they’ve developed, which makes the dog’s transition to home life easier.

Every retired service dog also receives a “pension” in the form of food and medical care, fully covered by the Customs Agency for the rest of the dog’s life.