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Bulgarian Politics Might Be on the Verge of Systemic Change This Is Hardly Good News for the Country As It May Lead to Instability and Turbulence > Page 03 ECONOMY/POLITICS/ENERGY 01 NOVEMBER- JANUARY | WWW.CAPITAL.BG BULGARIAN POLITICS MIGHT BE ON THE VERGE OF SYSTEMIC CHANGE THIS IS HARDLY GOOD NEWS FOR THE COUNTRY AS IT MAY LEAD TO INSTABILITY AND TURBULENCE > PAGE 03 THE PHONY BATTLE FOR BTC VTB SELLS BULGARIAN TELECOMS OPERATOR TO…VTB > PAGE 31 IS BULGARIA ENTERING A DEBT SPIRAL? SINCE 2008 BULGARIAN GOVERNMENTS HAVE FAILED TO RESTRAIN THE GROWING FISCAL DEFICIT, WHICH COULD BE A LONG- TERM PROBLEM FOR THE BUDGET > PAGE 23 In this issue: Ilin Stanev, 03 Managing editor BULGARIAN POLITICS MIGHT BE ON THE VERGE OF SYSTEMIC CHANGE This is hardly good news for the country as it may lead to instability and turbulence For many years a lot of our readers have asked us to do an English language version of Capital. Capital, 17 aft er all, is the closest thing in Bulgaria to a newspaper ALWAYS WITH EUROPE, NEVER AGAINST of record, but, despite Google’s best eff orts (thank you, RUSSIA guys!), its authoritative voice remains restricted mainly Is Bulgaria under Boyko Borissov still a to Bulgarian readers. viable Western partner? Or is it Russia’s Now you have it. Trojan horse in the EU? KQuarterly is not simply an abridged version of 23 Capital Weekly and Capital Daily. We publish original IS BULGARIA ENTERING A DEBT SPIRAL? articles that summarize the main events in the last Since 2008 Bulgarian governments have quarter of the year and shed some light on the upcoming failed to restrain the growing fi scal defi cit, months. KQ enjoys the benefi t of having more time which could be a long-term problem for the to think through the chaotic Bulgarian political and budget business life and to present a clear picture of its various developments and shenanigans. 31 THE PHONY BATTLE FOR BTC You can expect a lot of data that can give you VTB sells Bulgarian telecoms operator to… immediate understanding of Bulgarian economy, VTB as well as many authors and experts who are not part of our editorial team and will broaden our 42 covarage of the events in Bulgaria. NOT SO STRESSFUL TEST The banking system review was expectedly If you wonder why we chose K, instead of C for the name positive, yet questions remain of this publication, it has nothing to do with us trying to be original, or evading some probable trademark 48 violation. Капитал is an established brand we cherish, DREAMING ABOUT SOUTH STREAM so we take the liberty to show this in our English What are the chances of Bulgaria becoming language title. a gas distribution center? Enjoy KQ. Published by Economedia AD Advertisement We would be grateful 30 Ivan Vazov str., Sofi a 1000 Angelina Todorova phone (02) 4615 444 tel. +359 2 4615 280 if you give us your e-mail: [email protected] [email protected] feedback. If you wish to Managing editor subscribe for KQ, give Ilin Stanev us a call on: 02 46 15 349 or send an e-mail: Design: Madlen Nacheva Prepress Konstantin Vachkov [email protected] 2 KQ POLITICS With the departure of the incumbent president Rossen Plevneliev Bulgaria might loose the last high ranking openly pro-EU voice. Photo by VINCENT KESSLER POLITICS КQUARTERLYКQUARTERLY 3 DEVELOPMENTS TO FOLLOW: BULGARIAN Bulgaria will hold presidential elections on 6 November. Polls suggest there will be a run-off POLITICS on 13 November, as none of the candidates is expected to win more than 50% of the vote in the MIGHT BE ON fi rst round. Prime Minister Boyko Borissov announced that unless the nominee of the ruling GERB THE VERGE party, Tsetska Tsacheva, leads in the fi rst round, he will resign to trigger early parliamentary OF SYSTEMIC elections. If Mrs. Tsacheva wins though, CHANGE Mr Borissov is expected to reshuffl e the ruling coalition and strip the junior partner in THIS IS HARDLY the government coalition, the Reformist Bloc, of some of its power in the ministries. There are signals that GERB would seek GOOD NEWS FOR deeper cooperation with the two far right nationalist forces in parliament, the Patriotic Front THE COUNTRY AS coalition and Attack party. In addition to electing a new IT MAY LEAD TO head of state, on 6 November Bulgarians will also vote in a national referendum initiated INSTABILITY AND by TV host and music star Slavi Trifonov. The three questions that will be asked refer to state TURBULENCE subsidies to parties, whether members of parliament should be chosen by a simple majority, and if voting in elections and ref- erenda should be compulsory. The agreement that formed the Reformist Bloc will expire by the end of the year. It is too early to say what the fi ve constituent The upcoming presidential elections in Bulgaria could be the parties will decide but one of them, Democrats for Strong Bul- tipping point for a possible systemic change in the country’s garia, is already considering pull- politics. The election campaign signals a weakening of the pro-EU ing out. Its leader Radan Kanev consensus and general slide towards national-populism. This is is undertaking a nationwide tour to present his ideas, presumably hardly good news for the country as it may lead to instability and in preparation for a new political turbulence. project. 4 KQ POLITICS BULGARIAN The upcoming presidential possible systemic change relate to unfinished elections in Bulgaria could be business in the fight against corruption, the POLITICS the tipping point for a possible reform of the judiciary and the fall out of the systemic change in the country’s collapse of CCB (Corporate Commercial Bank). MIGHT BE ON T politics. The election campaign Although the second government of Borisov THE VERGE signals a weakening of the pro-EU consensus came to power in 2014 with promises to fix and general slide towards national-populism. all these significant domestic problems, it is OF SYSTEMIC This is hardly good news for the country as it now apparent that it has failed to do so to a may lead to instability and turbulence. considerable degree. Progress is modest and CHANGE The reasons for the systemic change are hopes for further significant steps are generally both external and domestic. For the last two weak. This has eroded the support for the decades Bulgaria has enjoyed a rather favorable government forcing it to rely more and more on THIS IS HARDLY international environment, in which the EU and ad hoc coalitions in parliament. GOOD NEWS FOR NATO have always been important anchors Furthermore, the loss of support for GERB and stabilizers. The general course of Bulgarian is particularly visible in the presidential race. THE COUNTRY AS governments was in synchrony with the other Although the GERB’s candidate – Tsetska European capitals, which has contributed to Tsatcheva - is still the favorite to finish first in IT MAY LEAD TO the creation of a sense of continuity and even the first leg of the election, the candidate of the INSTABILITY AND inevitability of the most important political Socialists, Roumen Radev, may win the elections decisions. This sense is now gradually being in the second leg, according to some polls. Even TURBULENCE lost with the succession of crises affecting the the very prospect of a possible loss undermines EU, and with the aggravation of the security the political position of GERB and makes early DANIEL SMILOV* situation in both Ukraine and the Middle East. parliamentary elections in the first part of 2017 Most importantly, after the Brexit referendum very probable. the EU has lost its previously unquestionable As a result of these developments, the pro- “soft power” and attraction. Or at least Brexit EU consensus among the political establishment has given wings to a motley crew of populists, in Bulgaria is falling apart. At one extreme, nationalists and Russophiles united in their there are more and more voices calling for the Euroskepticism. withdrawal of the country from NATO and even The domestic factors pointing towards a the EU. These voices are for now marginal and parties BSP and ABV for a joint presidential nomination commenced, the Air Force commander’s name popped out as of nowhere. At the ROUMEN RADEV, beginning of August, as rumours of Radev’ possible nomination THE PARATROOPER OF spread, he quickly resigned as Air Force chief, citing the same reasons as the year before and saying that paying for air policing was worse THE LEFT than the Treaty of Neuilly-sur-Seine of 1919 which granted large Bulgarian territories with Bulgarian-speaking population to the Balkan winners of WWI. Mr Radev’s credentials as NATO general are hard to dismiss - he The name of Maj Gen Roumen Radev, former Bulgarian Air Force had studied not once but twice at the Maxwell Air Force Base NCO commander, was almost unknown outside of the Armed Forces until Academy, a leading US pilot school, and graduated in the top of his three months ago, apart from a couple of short, yet memorable publicity class. He then worked at NATO headquarters. Yet, from the start of his spells - the staging of the largest Bulgarian air show since 1989 and the election campaign he got hooked up on BSP’s leading messages for vocal handing of his resignation in 2015 in disagreement over the way spearheading better relations with Russia and investing in nuclear the joint air policing of the Bulgarian air space with NATO allies should energy projects (after billions of losses in two previous attempts be handled by the Ministry of Defence. to build a new NPP), as well as anti-refugee rhetoric (adopted by He has repeatedly stated that paying another state - be it allied most of the presidential candidates).
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