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Svetoslav Ivanov: In the midst of the storm - sanctions and Bulgaria

Host's comment

The storm in Bulgaria can come unexpectedly and suddenly, despite the fact that it started as a light breeze on the other side of the world. The most dangerous delusion in our society is to believe that domestic politics are not influenced by external processes. Here we have a bad habit of neglecting them, which is why international news is usually pushed into a corner. And the truth is that any political or economic status quo in a country like Bulgaria is shaken primarily by a combination of intertwining external factors.

For example - after more than 40 years of communism, the regime collapsed under the weight of the bankruptcy of the Soviet Union, and Todor Zhivkov was overthrown less than 24 hours after the fall of the Berlin Wall. The operation against Yugoslavia and the provision of an air corridor to NATO in 1999, Bulgaria's participation in the American "Coalitions of the Willing" in the invasion of Afghanistan in 2001 and Iraq in 2003, played an important role in our admission to NATO.

The favorable economic atmosphere in the Western world during the first ten years of the new millennium allowed us to enter the EU, despite all the compromises and monitoring of our justice and internal affairs by Brussels. And vice versa - the rise of Orban in Hungary and the dominance of "Law and Justice" in Poland made Brussels turn its attention away from Bulgaria and focus on Budapest and Warsaw.

In our more recent history - the Russian invasion of Ukraine, which began in February 2022, created an internal political atmosphere that made a coalition between politically incompatible entities possible. Something that is being repeated at the moment, but with a main argument - joining the eurozone. As a process, this will lead to the shrinkage and disappearance of some of these parties or their complete ideological reshaping, but this is again a function of the future, which is full of unknowns.

The MAGA movement in the US and Donald Trump were recognized by most pro-Russian political formations in Europe. Trump's return was until recently seen as fuel for the fire of Eurosceptics. But the latest development in relations between Washington and the Kremlin has the potential to put an end to the identification of pro-Russian parties with the conservative wave coming from the US. The US administration's approach to Russia is currently approaching the European one and is turning from an asset into a liability for Eurosceptics.

Currently, the wind from the US with the sanctioning of "Lukoil" could cause a hurricane in Bulgaria. The word "nationalization" is mentioned. On a lexical level, the use of this term is fundamentally wrong, because the last thing we should imagine when hearing "nationalization" is Fidel Castro coming down from the mountain with the partisans or how Imam Khomeini gets his hands on the deposits of the American and British concessionaires in Iran.

No, this is more about buying back from the state. That is, all of us should buy back the refinery with our money or with a loan. Then the refinery will be managed directly by the government that will be in power. There is no guarantee that the Russian owners would want to sell to the state. Reference - the situation in Serbia at the moment.

Second option - a foreign investor. We do not have enough information here. Periodically, publications of interest to various energy companies appear, but the process usually takes time, and apparently events develop much faster.

Third option - Bulgaria is pressured by Washington to impose mirror US sanctions against the refinery within the specified month, of which 25 days remain. "Lukoil" stops. Then we will have to look for an urgent answer to the question of how Bulgaria will continue to purchase petroleum products and how this will affect prices. Just imagine this scenario in the first months after the adoption of the euro... Currently, the prices of everything are rising without fuel prices having risen recently, imagine what will happen if they rise.

Fourth option - Bulgaria asks for a postponement together with Germany and Hungary in the hope that the impulsive Trump will make an exception or that the sanctions against "Lukoil" and "Rosneft" will fall faster than expected. For this to happen - Putin must sit at the negotiating table to end the war in Ukraine. The lifting of sanctions soon is a possible, but rather uncertain hypothesis.

All this shows that today domestic politics is a function of external forces - more than ever. But in this interconnected world, it cannot be the other way around. At the moment, the Bulgarian rulers do not have many moves, because they do not know which of these scenarios will develop and how it will affect them. In this chaos of so many intertwined events, not every plan can be realized, because the exact opposite effect can occur.

That's how the world works. But not everyone understands it.