site.btaMedia Review: September 25

BULGARIA TO HALT TRANSIT OF RUSSIAN GAS VIA BALKAN STREAM

Segabg.com quotes Prime Minister Rosen Zhelyazkov as saying that the transit of Russian gas via Balkan Stream will be cut off as part of EU measures against the Kremlin.

Stopping the transit will leave Serbia, Hungary, and Slovakia without gas. The transit is carried out through the Balkan Stream pipeline, which is an extension of the Turkish Stream. This pipeline was built in a short time during the last government of Prime Minister Boyko Borisov, financed by the Bulgarian budget. So far, Bulgartransgaz has not clearly reported how much Bulgaria profits from it.

Bulgaria will terminate the contract for the transit of Russian gas next year. This was made clear by Prime Minister Rosen Zhelyazkov, who is in the U.S. to participate in the annual session of the UN General Assembly. Zhelyazkov said: “As for President Trump’s call, which was heard today during the General Assembly session, we, as part of the European Union, will join the Union’s decisions to, in the short term  by 2026, suspend contracts for the use or transit of Russian natural gas.”

By 2026, contracts for the use or transit of Russian natural gas are to be terminated, and in the long term, by 2028, it will be completely excluded from the Bulgarian energy market, Zhelyazkov added. According to him, the entire natural gas consumption in Bulgaria, both for industry and households, is covered by imports of liquefied natural gas delivered via specialized terminals.

Before the Prime Minister’s statement from the U.S., Continue the Change submitted a bill to tax the transit of Russian gas. This was announced by the party’s chairman, Asen Vasilev, in the National Assembly. The draft was presented before the Prime Minister’s announcement about stopping the transit, and according to CC-DB’s estimates, the budget should receive BGN 3 billion.

ARRESTED VARNA MAYOR SPEAKS TO POLITICO

Mediapool.bg and 24 Chasa run highlights from a conversation of arrested Varna Mayor Blagomir Kostev with POLITICO.

Speaking to POLITICO during his daily 10-minute slot for telephone calls from jail, Kotsev said the EU should exert “more political pressure” on the Bulgarian government.

Mayor Blagomir Kotsev of Varna, Bulgaria’s third-largest city, was arrested July 8 on graft charges, which he has denied. His anti-corruption Continue the Change party insists the high-profile case is politically motivated and shows the country’s judiciary has been weaponized.

Before his arrest, he said, he had been warned he was under political attack. The blitz was due to his party, which runs on an anti-mafia platform in a Black Sea city notorious for politically-connected mob crime and Russian influence. Kotsev said he was threatened that he could end up like jailed Turkish mayors opposed to the rule of President Recep Tayyip Erdogan.

“Some people were saying to me: ‘I heard that you should [quit] this party because it’s going to be dangerous for you.’ I received a signal that ‘if you don’t do it, this will happen; look what happened in Turkey; look at what happened in other places.’ And actually, the scenario is very similar to what I see in other places outside of Bulgaria, but they’re not in the EU,” he said.

Plamenka Dimitrova, a catering manager who received lucrative contracts from the previous Varna administration, has accused Kotsev of trying to extort money from her for new contracts. The embattled mayor has been charged with seeking a 15 percent cut from school and kindergarten meals.

“If I, as the mayor of the country’s third-largest city, can be targeted, it could happen to any ordinary citizen,” Kotsev said. “Anyone can be jailed while under investigation. It can take months or even years, and even if you’re innocent, you can remain in custody until someone decides to release you.”

“I’m very worried, and it’s not just me - many people in Bulgaria are asking where we stand in terms of our judicial system,” he added. “This concerns me deeply because instead of improving as a member of the European Union, things are getting worse.”

BULGARIA SENTENCED TO PAY EUR 100 MILLION TO FOREIGN INVESTOR

Segabg.com writes that Bulgaria has been ordered to pay over EUR 100 million to a foreign investor who was harmed by the actions of the executive and legislative authorities in the country, quoting a report by the investigative site BIRD.BG.

This concerns a claim by a company that acquired a large solar park in the village of Karadzhalovo back in 2012. Malta-registered ACF Renewable Energy filed a case with the World Bank arbitration tribunal due to deteriorated conditions for investors in renewable energy capacities, demanding to receive EUR 61 million.

Bulgaria lost the dispute in January 2024 but refused to voluntarily pay the awarded sum to ACF. That is why the Maltese company turned to a court in the US for enforcement.

"From the case documents, it is clear that Bulgaria's defence strategy, represented by Finance Minister Temenuzhka Petkova, was extremely mediocre. The judge in his reasoning directly points out that Bulgaria failed to request a preliminary ruling on the admissibility of the case (rather than on its merits). This is quite a serious and amateur procedural error," commented BIRD.

The EUR 61 million are only part of the financial damage. Bulgaria must also pay all legal costs, as well as penalty interest. Thus, the total sum exceeds EUR 100 million.

ACF Renewable Energy's claims are related to a series of legislative changes after 2013 due to the high guaranteed prices for purchasing electricity produced by solar power plants.

In 2014, legal limits were introduced on the amount of electricity that could be purchased at preferential prices. In 2015, a contribution was introduced to the electricity system security fund — amounting to 5% of the revenue from sold electricity. A year later, the fee for access to the electricity transmission grid was also increased. Thus, the conditions for the investors in renewable energy sources, who were spoiled by excessive government generosity, were significantly changed.

There has been no statement from the Bulgarian Ministry of Finance about the unfavorable development of the case. BIRD.BG claim that since Temenuzhka Petkova has become Finance Minister, the Ministry of Finance has completely classified data on arbitration cases against Bulgaria.

LOCAL TAXES

Segabg.com quotes Silvia Georgieva, Chairperson of the National Association of Municipalities, as saying on national radio that nearly 40–50 municipalities have already updated local taxes and fees this year and that no widespread increase is expected in levies and tariffs in 2026.

Georgieva reminded that local taxes can only be adjusted before the start of the respective budget year, and mayors considering such steps must present draft proposals in October and November for public discussion.

Municipalities report surpluses by the end of July, but this is due to slower implementation of the capital program; expenditures related to public procurement are still forthcoming, Georgieva said. Local budgets recorded larger surpluses at the end of July compared to last year, with the surplus in municipal coffers exceeding BGN 1 billion.

Payments under the National Investment Program are delayed in some places, and the volume of projects is enormous, Georgieva added. She further noted that, at present, payments continue only through the state budget. The investment program allocated BGN 750 million in the state budget, while the remaining BGN 900 million in funding is expected to come through the Bulgarian Development Bank (BDB). The bank’s capital was already increased by BGN 4 billion by the cabinet, part of which is intended for the municipalities’ investment program. Currently, there is no clear information on exactly how these funds will be provided, Georgieva commented.

FORECAST FOR IMPACT OF US TARIFFS ON BULGARIA

Dnevnik.bg quotes a warning by the Economist Intelligence Unit that Bulgarian businesses should keep in mind that US tariffs, which are 7-8 times higher than those in 2024, are likely to remain in place over the next 10 years.

The consequences of this scenario go beyond restricted access to the markets of the world’s largest economy, it could also lead to structural shifts in global trade.

The United States may not be among Bulgaria’s leading direct trade partners, but tariffs of 10-15% would have a significant impact through EU-based importers of Bulgarian products from countries like Germany, Italy, or Romania, as well as from Turkiye.

In its autumn forecast for Bulgaria, the Economist Intelligence Unit writes that if the jump from tariffs below 2% last year to about 10–15% becomes permanent over the next decade, this will weaken Europe’s industrial base and accelerate the reorientation of supply chains toward other regions.

The analysts from the UK-based group argue that it is now unlikely the tariffs will be lowered, even if a new U.S. presidential administration agrees to it, especially after new infrastructure has been put in place in the U.S. to collect the increased duties and a bipartisan consensus is forming in favor of economic nationalism, the report states.

BULGARIA RAISES FEWER FARM ANIMALS

TrudNews.bg writes that fewer farm animals are being raised in Bulgaria and across the entire EU. In Bulgaria, more than 60% of the meat consumed last year was not locally produced.

According to data from the Ministry of Agriculture, the most significant decline was recorded among goats. Their numbers continue to decrease in Bulgaria and have now fallen below 150,000.

The number of sheep has decreased by 5%. There are still over 1 million, but that number is getting closer to dropping below that threshold. Despite the decline, Bulgaria remains among the top 10 EU countries in terms of the number of sheep raised.

The next most commonly raised animals in the country are pigs – 700,000 – followed by cattle, which number slightly over half a million. Buffalo are the rarest livestock, now numbering fewer than 20,000.

Despite the declining number of animals, more than 7% more meat was produced over the course of the year. However, the total quantity of meat produced is still insufficient to meet consumption needs.

Only 37% of the meat consumed in the country is of Bulgarian origin. Domestic production consists mostly of pork – 75%, followed by veal and beef – 16%, and lamb – just 7%.