08.08.2023
The government reports major progress in its second month on problems it faced when it took office and on discarded projects
Restart of statehood following an extraordinary amount of work within an unprecedented short period. This could be a summary of what the regular government of Prime Minister Acad. Nikolai Denkov did in its second month in office. In July, the cabinet finalized its program that comprises some 500 measures for the first 18 months alone with 5 key priorities. Meanwhile, the government identified and already found a solution to a number of delayed projects and to serious problems that the caretaker government had left behind.
The preceding government submitted a draft version of a budget with 6.4% deficit of the GDP and did it after a delay of several months, whereas it took Finance Minister Assen Vassilev and the Ministry of Finance (MoF) three weeks to draw up a new budget – with 3% deficit, without tax increases and with higher social payments. The investment program retained the feasible projects. As there should be no surprises to businesses and citizens in midyear, the 2023 budget is free of revolutionary reforms. Yet once the budget law was approved by the Members of Parliament, there was a restart. Along with the budget, the Parliament enacted three pieces of legislation that had been delayed and that are in areas needed for Bulgaria’s accession to the Eurozone – insurance, insolvency and money laundering.
With a deficit in the treasury of BGN 1.2 billion, towards the end of the second month of work of the MoF new team, the surplus in the treasury swelled to BGN 0.5 billion. Within two months, the government collected BGN 2 billion in excess of its spending owing to the improved tax collection.
To help Bulgarian citizens abroad, the Ministry of Foreign Affairs engaged in energetic action to ensure the needed support and assistance. Following the coup d’état in Niger on 26 July 2023 and the closure of all borders, the MFA took action in close cooperation with European Union partners to move out of the country four Bulgarians without risking their lives. As a result of the joint action early in the morning of 2 August 2023, the four Bulgarian citizens left Niger on a flight organized by Italy.
The Bulgarian citizen Dragomir Andonov who was injured in late July in an accident in the city of Skopje in the Republic of North Macedonia was moved for treatment to the Military Medical Academy on 3 August. The State Aviation Operator acted on an order from the MFA to transport him to Sofia.
The Deputy Prime Minister and Minister of Foreign Affairs Mariya Gabriel presided a meeting of the Interinstitutional Coordination Mechanism of the Organization for Economic Cooperation and Development (OECD) to discuss the current situation and the subsequent steps for Bulgaria’s accession to the “club of rich countries”, the national roadmap of cooperation activities with the OECD in 2023-2025 and guidelines for the participation of Bulgarian representatives in the OECD operational bodies.
A quadrilateral ministerial in Brindisi, Italy in late July was the venue of a discussion of the foreign ministers of Italy, Albania, Bulgaria and the Republic of North Macedonia on regional cooperation and the construction of European Corridor VIII to connect the seaports Varna and Bourgas with the south Italian seaports Bari and Brindisi. The foreign ministers agreed that Corridor VIII would boost economic growth, strengthen the market competitiveness of the four countries’ companies and promote cooperation between Italy, Albania, Bulgaria and the Republic of North Macedonia in a number of sectors, including the field of culture. The four countries’ joint effort will promote trade, business, good neighbor relations and economic growth and will strengthen security.
The government achieved several key results in the field of economy and business. The Ministry of Economy and Industry stood behind the national interest in the longstanding case of the Plovdiv Fair. After Minister Bogdan Bogdanov ordered a thorough analysis to be made and proceeded with legal action, there is a visible result now: it is the distraint on the shares that are the non-cash contribution of the Municipality of Varna to the private company Paldin Tourinvest AD making up 29% of the capital of the International Fair Plovdiv AD. In this way, the government-owned shares shall not be transferred to the private company as long as the suit is pending. However, the protection of the public interest and of the government-owned property is just the first step: work is already underway to revive the potential of the Fair and its operational management.
The Ministry of Economy and Industry launched three real investment projects in July in the Automotive Industry sector. Two projects are in the manufacturing segment with an investment totaling over BGN 100 million in the proximity of Stara Zagora and Rousse where new plants will open for the manufacturing of high-tech components for cars and electric vehicles (EVs) for renowned European manufacturers. The investors will create 700 new jobs. The third investment is made by a German company in a R&D center that will create 100 new jobs in the capital city.
A total of BGN 500 million is provided under the Program “Research, Innovation and Digitalization for Smart Transformation” and was approved in July by its Steering Committee. Between now and yearend 2023, the Ministry of Innovation and Growth will invest the said sum to open up more opportunities for joint projects between the businesses and research organizations and infrastructures in the country, Minister Milena Stoycheva announced.
A total of 39 projects worth about BGN 3 billion are subject to certification procedure under the Investment Promotion Act. The projects are expected to create some 5200 new jobs mainly in the sectors of healthcare, IT, production and logistics. The Ministry of Innovation and Growth reports that in the absence of a regular government and with no sustainable and long-term measures in place, the investment process is stagnating yet steady interest is already manifested by countries in Europe and by non-EU countries.
In the meantime, lower interest rates were offered for BGN 2 billion credits made available to Bulgarian businesses after a financial agreement was signed between the European Investment Bank (EIB) and the Bulgarian Development Bank (BDB). In this way, investment programs, especially of small and medium-sized enterprises, will be protected when interest rates rise globally.
The government took real steps to train staff for the tourism sector. After signing an agreement with the Association of Restaurant and Hotel Schools in Bulgaria, the Ministry of Tourism will financially support 28 culinary competitions, conferences and training courses in all regions of the country. In this way, the Ministry with Minister Zaritsa Dinkova will give young people from vocational high schools in tourism an opportunity to demonstrate what they have learned and will facilitate their contacts with employers so that they stay and work in Bulgaria after they graduate from school. A pilot program has been drawn up with employers who are willing to support the training of young staff.
To respond to the interests of citizens in high travel season, more stringent control is now exercised on the airline companies to make sure that they act on their passengers’ complaints. Fines can be as high as BGN 5000 and will be imposed subject to the Civil Aviation Act. Between 1 January and 1 August 2023, DG Civil Aviation Administration was approached by over 690 complaining passengers.
To fulfil declared priorities, the Denkov-Gabriel cabinet took several resolute steps to address the sluggish pace in healthcare. The government restarted the process of organization of the aerial emergency medical service that had been delayed and misdirected by the caretaker government. The service will conform to all European relevant rules. For this purpose, the Heli Med Service EAD was reestablished. The caretaker government went into violations as it terminated the company to transfer the operation to the State Aviation Operator while the state-owned company failed to meet the requirements of European legislation.
The Ministry of Transport and Communications provided four of the six landing sites for the operation and these have already been transferred to the Ministry of Health. Minister Georgi Gvozdeykov explained that the locations chosen meet the requirements for the so-called “Golden Hour” for the transportation of a patient to a hospital. The first helicopter financed under the Recovery and Resilience Plan (RRP) is expected to land in Bulgaria on 15 December 2023.
Minister of Health Prof. Hristo Hinkov established a Public Council for the Construction of a National Infant Hospital as one of the government’s priorities. The Council will have advisory functions and maintain the interaction with the Ministry of Health, the Health Investment Company for an Infant Hospital EAD and the general public in order to ensure the openness and transparency of the process throughout the construction of the hospital. The Public Council will hold regular meetings at least once a month.
The cabinet reported major progress on another important focus of its program of governance relating to the national Recovery and Resilience Plan (RRP). Owing to the concerted action of several ministries, the government made up for the serious delay in the drawing up of the Territorial Plans for Just Transition to Green Economy. The plans must be approved by the European Commission so that Bulgaria can receive RRP funds to give confidence and calm down people in places with coal-fired plants that their income is insured for years ahead. In July the joint teams of the Ministry of Regional Development and Public Works and the Ministry of Energy, together with colleagues from the Ministry of Labor and Social Policy completed the first conceptual drafts of the Territorial Just Transition Plans. They will be uploaded before mid-August. In July, the Minister of Energy Rumen Radev joined a discussion about the future of the Maritsa-Iztok Complex. The next public discussion with all the parties concerned in Stara Zagora is scheduled for 28 August.
The Ministry of Agriculture unleashed the Maritime and Fisheries Program 2014-2020, after it found a serious delay in the administrative processes and a risk of losing funds that amount to about BGN 24 million. Acting on an order from Minister Kiril Vatev, the time for signing contracts with the selected applicants and for the completion of the evaluation of the proposals on the terms of reference was shortened as a matter of urgency in order to compensate for the backlog before the end of the year.
A matter of particular importance in support of Bulgarian agricultural production was resolved in end July. The Bulgarian yoghourt and the Bulgarian white brined cheese now enjoy a Protected Designation of Origin (PDO) on the EU market. The designations are entered in the register of 1641 protected agricultural products.
Regarding key infrastructure projects, Minister Andrey Tsekov and the Ministry of Regional Development and Public Works (MRDPW) found a compromise solution that tallies with the public interest so as to continue roadwork of the Hemus Motorway despite the vicious in-house contracts that are impossible to be terminated given the caretaker governments’ failure to act. Construction will continue subject to transparent spending of public money. A workgroup is now preparing a mechanism to enforce responsibility on roadbuilders for the quality and deadlines of their performance. The approximately BGN 1.3 billion paid in advance three years ago shall not be subject to indexation.
The new public procurement procedures for ongoing repair and maintenance of the national motorway network worth BGN 4 billion were launched. The MRDPW audits of the caretaker government’s previously launched procedures exposed that all eight of them faced restrictive criteria and requirements that pave the way to unlawful, non-transparent and inefficient spending of the money. That is why in July the MRDPW terminated them. The new contracts will be awarded on the basis of a transparent criterion – the lowest price bid.
Work started to expand the Underground Gas Storage (UGS) Chiren in the surface part of the facility, the Minister of Energy Rumen Radev announced. The project is of strategic importance and to the benefit of the European Union as a whole. The expansion will make possible to increase the gas storage available capacity up to 1 billion cubic meters and the daily injection and withdrawal rates – up to 8-10 million cubic meters. New surface and underground facilities are to be built in addition to a gas pipeline to connect the UGS Chiren with the Bulgartransgaz existing grid.
Regarding social policy, one-off benefits for pupils who continue to attend school in the second, third and fourth grade will now be granted without any need to show a certificate to verify the child’s enrolment. The requirement was withdrawn following the approval by the Parliament of the proposed amendment by Minister Ivanka Shalapatova and the Ministry of Labor and Social Policy to the Family Allowances Act. The Ministry works in an order of urgency on the approval of 150 applications for one-time assistance in Montana Region, Vratsa Region and Sofia Region that were flood stricken in June 2023 while 208 permanently unemployed people were appointed to engage in emergency work in the places afflicted by the disaster.
The Minister of Education and Science Galin Tsokov responded to numerous alerts from parents and announced the start of work to fix, from next school year onwards, a second date for the national external assessment after the seventh grade. Graduates from the seventh grade who are prevented to turn up on the regular dates due to health problems or for other serious reasons will be able to take the exams. The idea is that pupils who take the exams on the date thus fixed and after the regular date will be entitled to exceed the enrolment limit on a case-by-case basis.
To encourage extramural learning, the Ministry of Education and Science paid the trips to major national sights for over 27,000 pupils from 400 schools throughout the country. This is part of a new module of the National Program “Bulgaria – Educational Itineraries”. A pupil may join a group once in the course of the implementation of the program as per its mainlines.
Regarding another key priority for the Denkov-Gabriel cabinet – the protection and security of citizens – a new series of nationwide preventive measures was taken in July to end the road bloodbath drawing on the method of extensive control. The measures are an outcome of the joint operations of teams of the Ministry of Interior, the Road Transport Administration Executive Agency and the National Revenue Agency. Over the past two months, numerous potential road accidents were prevented as some 1500 drunk drivers and 750 drug-addicted drivers were caught in the act. Between 6 June and 31 July 2023 a total of 683 pretrial proceedings were initiated for driving after taking drugs, as were 789 pretrial proceedings for driving after drinking alcohol. The loss of lives on the roads in consequence of accidents decreased between 6 June and 31 July 2023: the death toll is 78 which is a drop of 15 over the same period last year.
Meanwhile the Minister of Interior Kalin Stoyanov proposed amendments to the Road Traffic Act and to the Criminal Code. The Members of Parliament approved a number of amendments to the Criminal Code providing for harsher sanctions on drivers who drive after drinking alcohol or taking drugs and cause thereof damage and death. The same applies in the event of refusal to be tested for alcohol and drugs.
Measures were taken to secure highly accident-prone sections on the roads. The Road Infrastructure Agency commissioned the installation of stakes between the directions of the lanes of traffic to be completed by end-September on another three risky sections, on the model in the Kresna Gorge.
Operation to counter the illegal trafficking of migrants became more efficient in the past two months. Following the operations ordered by the Ministry of Interior to counter the migrant flow between 1 June and 31 July 2023 a total of 46,940 attempts to cross the Bulgarian-Turkish border were intercepted. That is a 73% increase over the same period in 2022. The 400 migrants detained by the Bulgarian border authorities in June and July make up a number that is double compared to the 200 in the same period last year.
Regarding national security, Bulgaria contributed as heretofore to the allied action to strengthen the national deterrence and defense potential as part of the Alliance, including, inter alia, the preparation of the needed infrastructure by the Ministry of Defense and the Minister Todor Tagarev to expand, if necessary, the NATO multinational battlegroup in Bulgaria to a brigade-size formation.
Another long delayed and looked forward to reform materialized owing to the good ministry-to-ministry cooperation within the Denkov-Gabriel cabinet. The Central Register of Special Pledges was transferred to the Registry Agency on 1 July 2023. All entries of pledges and injunctions can be tracked in real time now. A working information system was put in place for the benefit of users and with guarantees for legal security. Owing to the combined effort of the teams of the Minister of Justice Atanas Slavov and of the Minister of e-Government Alexander Yolovski it took fifteen days to do it following appropriate amendments to the legislation and after five previous deferrals.
As concerns the environment, Bulgaria is now taking resolute steps to regain its status in the societal developments. The country insists on its offer to host the UN Climate Change Conference (COP29) of the parties to the United Nations Framework Convention on Climate Change (UNFCCC) in 2024 despite the impediments to the process and the impossibility to name a host country at this stage, announced the Minister of Environment and Water Julian Popov. It is important for Bulgaria that СОР29 be held in Eastern Europe as the country positions itself as an exponent and a driving force of the region’s interests and priorities.
The monitoring of the Black Sea littoral water after the accident in the Ukrainian dam Nova Kakhovka and the quick response with timely communication given the concerns that arose over a possible radiation threat after the accident in the Ural Electro-Chemical Works in Novouralsk in Russia were some of the actions by which the Ministry of Environment and Water built on the achievements to regain public confidence in the institutions. Energetic work is underway to find solutions to protect the dunes along the coast, to keep the atmospheric air unpolluted and to conserve the biodiversity in the country.
The cabinet reported progress made in important areas in the field of culture and sport. The Ministry of Culture successfully performed the role of a mediator and the new collective bargaining agreement with the performing arts is now a fact. The agreement provides for higher payments to performers and experts. Work on the Enforcement Regulation of the Film Industry Act is well advanced after the Minister of Culture Krastyu Krastev and Ministry teams met with members of film industry associations and organizations to agree on and finalize the Regulation. A public discussion is forthcoming.
The Minister of Youth and Sports Dimitar Iliev reopened the dialog to address the problems of the sports federations and the clubs concerning their financing and the improvement of the sports facilities. New program documents are now written such as strategies and pieces of legislation, in addition to regulations and rules for the improvement of the performance of the Ministry of Youth and Sports.
