Daniel Smilov's comment:
In this formula, “A“ corresponds to Asen Vassilev, and “2xD“ reflects the doubled appetites of Delyan Peevski and “New Beginning“, after they became a semi-official member of the ruling coalition. GERB and Boyko Borisov do not like the budget and its parameters, because their priorities are somewhere in the small letters that make up the capital “D“ in the general framework of “A“.
With regard to the budget, the rulers themselves admit that it follows the logic of recent years of increasing incomes and social payments. Overall, this policy, associated with Assen Vassilev, is actually successful and necessary, because the country could not enter the eurozone with miserable pensions and salaries. This would certainly have led, if not to January, then to February riots like in 2013. Also, Vassilev's "tight" budgets did not leave any surplus for a quick pre-Christmas giveaway to the clientele. This, alas, was a serious negative side effect of the "lean pizza" of Minister Simeon Dyankov: in this model, low revenues were staked (intentionally or not) and then everything above the plan was quickly distributed at the end of the year at political discretion.
In this sense, as far as they follow Assen Vassilev, GERB should be praised: there was a need for a smooth increase in income, without it being necessary to increase the tax burden.
Money for the political clientele
And here comes the big problem in the form of 2xD. To the described reasonable policy, more and more expenses were added, which raised the redistribution through the budget from under 40% (under Assen Vassilev) to almost 46% for 2026. In this sense, it can be said that “2D“ is equal to about 6% of GDP. The additional expenses are far from being explained only by salaries and pensions. Although, as the saying goes, the money under this heading for services and the Ministry of Internal Affairs was raised almost twice in total. Along with salaries and incomes, GERB and DPS almost silently loaded the budget with billions for investment programs and municipal projects, which are money to be distributed to political clientele (to a very serious extent).
If one wants to clearly see the corporate part of this clientele, one should look at the list of recipients of loans from institutions such as the Development Bank, which are richly funded by the budget. For the municipal part of the clientele, one should look at the results of the local elections plus the photos under the coat of arms. And it is good to
look at which municipalities the local government has easily agreed to a double increase in garbage collection prices.
An increase of 5-6% of GDP in budget expenditures for two years is too much – downright indecent. And if it were 3% more, it would still be a lot. Because even with 3% more, it is clear that budgets cannot be tied up without raising the tax and insurance burden. And it is, of course, being raised, despite the spells of Borisov and GERB.
Now their mantra is that all this will end next year (i.e. in the 2027 budget). But who will be in power then and whether the ones who promised will have a say at all is not at all clear. They could just as easily have said: “after us a flood“.
The problem with the peculiar manager of Lukoil
Almost the same inclusion of the PP-DB policy plus additional aggravating extras happened with regard to the drama with “Neftochim“ Burgas. In the end, the refinery received the coveted derogation from the US and the UK, but a law with serious flaws was passed (with outrageous speed) and a person with no experience in managing refineries was appointed as a “special commercial manager“, as required by the newly passed law. In this sense, the idea of the “Denkov“ government for a special manager was adopted, but it was burdened with problematic elements that are not easy to explain.
The lack of possibility for judicial review of at least some of the important decisions is a mistake that makes the country vulnerable to future claims for compensation. If the speed of decisions is the leading consideration, it could have been foreseen that the appeal to the court would not stop the implementation. Moreover, in order to avoid future claims from “Lukoil“, now the commercial manager and the government must comply with them on all issues. We can imagine situations in which this would not be possible and would not be in Bulgarian interest.
Secondly, Rumen Spetsov certainly has the qualities to lead the NRA and perhaps because of them he was left in his post by GERB. Or perhaps because he chose the path of Kalin Stoyanov. This is not so important in this case and does not negate the fact that he does not have the experience and knowledge to lead a refinery, if necessary. And if “Lukoil“ decides at some point to withdraw its management from “Neftohim“, it may also need operational decisions for which Spetsov is unsuitable. We can hope that it does not come to that, but in the current difficult-to-predict situation it was better not to risk the appointment.
Perhaps the government has information that a complete transfer of ownership of “Lukoil“ in our country and in Europe is imminent. If this is so, then the “special manager“ is really just a formality to avoid American sanctions. But what if this possibility does not materialize, or if a buyer is chosen who simply wants to liquidate the assets and sell them off piecemeal? Then with Mr. Specsov Bulgaria will find itself in a completely unpicked vineyard.
On both the budget and the refinery issues, GERB should thank their colleagues from PP-DB for the general line of the policy they are pursuing. They should realize that the criticism against them is not because of the “A“ in their budget policy, but for the large “2D”, which is growing and has already reached almost 6% of GDP. Due to purely partisan logic, however, GERB prefers to play out scenes like “Delyanku, the murderer of Asenia“, where Delyanku could be both Dobrev and Peevski.
Hungary, Orban and Radev
A very interesting side thread in last week's storylines was the visit of Hungarian Prime Minister Szijjártó to President Rumen Radev. The signals from this meeting seem to be threefold. First, Hungary has energy interests in Bulgaria, related to gas transit and perhaps to the ownership of the refinery in Burgas.
Second, Orban prefers to communicate with Radev, even though the president has no serious powers (actually none) in energy policy. Whether this is a choice not only of Orban, but also of his patron Trump is not clear - rather not. But the topic is subject to different interpretations. Finally, it seems that Radeva's party, when it is created, will go to the “Patriots for Europe“ of Orban and Le Pen. This is bad news for pro-European Bulgaria and the parties that present themselves as Euro-Atlantic, and their voters would do well to think about the matter.