Mediapool Weekly: July 7 – July 13, 2018

Bulgarian Surge into the Eurozone Begins with the Banking Union; Peevski Amends the Media Bill

Bulgaria Submits Request to Become Member of the Banking Union

Bulgaria submits an official request to be accepted in the banking union of the EU on Friday. The decision has been negotiated between the Bulgarian government, the member states of the Eurogroup, the European Central Bank, and the European Commission. The decision was announced during a press conference in Brussels during which European member stated and institutions gave Bulgaria the green light for moving forward towards adopting the euro.

The Eurogroup and the European Commission issued a joint statement in which they declare that the day Bulgaria is accepted in the so-called euro waiting room – the ERMII – will be the same day it will be accepted in the banking union as well.

Apart from becoming a member of the banking union, Bulgaria makes 6 concrete additional commitments: to strengthen the banking supervision, the non-banking financial sector, the fight against money laundering, management of state-owned companies, and resolving the problems with bankruptcy.

Regarding Bulgaria, the EU has specific concerns, as the country has been monitored by Brussels for the fight against corruption and organized crime ever since it became a EU member state.

Asked whether the Mechanism for Cooperation and Verification for monitoring Bulgaria’s progress in the fight against corruption and organized crime should first be ceased before being accepted in the banking union and ERMII, Vice Chair of the European Commission Valdis Dombrovskis said that this is not a requirement per se although the issues will be watched closely.

In its letter, Bulgaria insists on entering the ERMII by July 2019. The European institutions made no commitments regarding timeframe, however, although the Commission indicated that the process should last about a year. The final decision about entering the banking union will be made by the European Central Bank, and for the ERMII – by the Eurogroup member states, Denmark, and the Bank. The Commission also must give an approval.

Government’s Report for the Bulgarian Presidency and is PM Boyko Borissov to Blame for the Trade War Between the US and the EU

Cabinet reports on the Bulgarian presidency of the Council of the EU

Opposition Bulgarian Socialist Party (BSP) declared the Bulgarian presidency of the Cousin of the EU a failure. The government, however, deems it a great success.

Government and opposition clashed on Friday. Harsh arguments in the plenary were very much expected and MPs delivered. The only surprise came from the left-wing European MP Georgi Pirinski, who made an ironic comment about the overwhelming corruption in the country from which the only person, who has been proven to be outside its realm is Movement for Rights and Freedoms (DPS) MP Delyan Peevski. No one replied to his comments, however, and they were left to drift.

BSP leader Kornelia Ninova went quite far in criticising PM Borissov, suggesting he bares responsibilities of global proportions, namely the trade war between the US and the EU. Ninova pointed out that the Bulgarian presidency of the Council of the EU had failed to reach a compromise on all the issues that divide Europe (such as migration and the future budget of the EU), and also on the heated trade dispute between the EU and Donald Trumps’s administration.

The ruling coalition, GERB-United Patriots (OP) boasted about different accomplishments, while the opposition criticized the last 6 months as being dedicated merely to another PR boost of PM Boyko Borissov’s personal image.

Our first presidency was a test for our European identity – we demonstrated responsibility and professionalism in our work for the European cause.”, said PM Borissov from the stand.

He highlighted that Bulgaria has managed to unite the European leaders to continue the dialogue with Turkey.

Borissov characterized putting the focus on the Western Balkans’ European perspective as crucial. He added that the European leaders have recognized the Western Balkans’ European path as a common European responsibility.

We widened the subject of the Western Balkans and took it out of the delicate political context it was in”, he said.

He underlined that the achieved results from the EU – Western Balkan summit in May were no PR and that the style in which the work was done was appreciated and acknowledged as a good one. Another sign of recognition, Borissov insisted, is the fact that Bulgaria was invited to take part in the Berlin process.

He went on to list a number of accomplishments mainly having to do with pushing forward the debate in many areas of EU policy, including economy, migrants, youth, environment and other areas.

Immediately after PM Borissov finished his speech, BSP leader Kornelia Ninova took the floor. Apart from declaring once more that the presidency has been nothing more than a personal PR tool for Borissov, Ninova criticized the majority for isolating President Roumen Radev from the EU presidency.

You isolated the presidential institution. President Radev tried to compensate for what the Bulgarian EU presidency failed to accomplish. You bashed him for that as well.” she said.

According to her Parliament was also left out of the presidency as well. She also highlighted that the majority had failed to include the justice and non-governmental sectors during this EU presidency.

The PM and the government failed to secure a consensus among Bulgarian institutions, and failed to mobilize national energy; the result will be mounting euro-skepticism.”, she continued.

“As Per Critics” Peevski Amends His Media Bill

DPS MP Delyan Peevski

Movement for Rights and Freedoms (DPS) amended MP Delyan Peevksi’s media bill, which passed first hearing in Parliament last week. DPS MPs Yordan Tsonev, Hamid Hamid, Velislava Krasteva – all co-authors of the bill – have introduced amendments, which provide for not only the official owners of media outlets to be declared but also the hidden owners, who are in control of the editorial policy of the outlet. Apart from that, the outlets would be obliged to disclose not only financing through grants but also funds that have been acquired through credit loans or through contracts with the state, municipalities or political entities.

In case the entity, which actually controls the editorial content is different than the real owner of the media service, this circumstance must be stated in the declaration.”, the bill states.

The additions to the bill were introduced to Parliament on Wednesday. DPS motivated the amendments by saying that they answer “our most intense critics”. Those critics mostly declared the bill pointless as the foundations, which fund media already declare that publically both on their own websites and in the Ministry of Justice’s public database. The bills initial provisions seemed to be nothing more than a PR tool to clean Peevski’s image, who was singled out in Reporters Without Borders’s last report as the primary reason for Bulgaria sinking to 111 place in the organization’s Press Freedom Index.

If the bill is passed and becomes law, the information will be available in a registry, which will be maintained by the Ministry of Culture. The Ministry currently maintains a similar database of printed media outlets.

Media who declare false or misleading information in their declarations will be fined anywhere between 10’000 and 15’000 leva; a second offense will be fined double. The fining itself will be executed by the Bulgarian National Audit Office and by the Commission for Protection of Competition.

The most ambiguous aspect of the bill remains how could it be established – without a doubt - whether a “hidden owner”, a different entity than the owner, who controls the editorial content, exists and who it is, as they would be – by definition – unofficial.

Parliament passed on its first reading the notorious Peevski media bill last week, after the Committee, responsible for starting the procedure for passing it failed to do so for half a year. DPS took the opportunity as an opposition party to do so itself last week. The rules of Parliament provide for opposition parties to introduce bills and resolutions directly to plenary once a month.

It was quite apparent that the whole maneuver had been coordinated with the ruling coalition as both GERB and the United Patriots (OP) enthusiastically voiced their support for the bill during the debate even though the ruling coalition has an alternative bill, whose declared cause is the same – transparency of media ownership. During these debates the only openly critical address by an MP was by Bulgarian Socialist Party’s (BSP) Anton Kutev, who said that he is not so much against the proposals themselves but against the fact that Delyan Peevski is the one introducing them.

Still, the amended bill looks far more promising as long as reliable mechanisms could be secured in order to double check and confirm claims provided in the declarations as well as sanctions against information that is false or misleading. Such measures, however, are not provided for in the bill as of yet. It remains to be seen whether MPs will step up and introduce them. If not, the amended media bill will amount to nothing more – still – than a tool for cleaning politics’ image.

Parliament Passes Controversial Fuel Bill

Emil Dimitrov

Parliament passed the bill for administrative regulation of economic activities related to oil and oil products in its final second hearing this week.

Medium and small gas station companies protested the bill – more known as the ‘fuel bill’ – while vice-PM and one of the leaders of the coalition partner United Patriots (OP) Valeri Simeonov called it “a repulsive lobbyist bill in favor of Lukoil and the other big players of the market.”

The procedure for the bill to be enacted will take about six months, except for some articles, which might take longer.

The new law provides for companies to have a certain initial capital, a special registry for oil and oil product dealers, and large sanctions for violators.

OP’s Hristian Mitev proposed to Parliament that the bill be enacted only after a notification by the European Commission but the proposal was rejected. Emil Dimitrov, who is Chair of the Parliamentary Committee for Monitoring Budget Income, Fight Against the Informal Economy and Smuggling, which is in charge of the bill, said that the Ministry of Economy has already submitted a request for such a notification while drafting the bill. He explained that during the six months before the bill is enacted, the notification could be given.

Meanwhile, Valeri Simeonov again voiced his concerns about the bill and called it again “repulsive” and lobbyist.

Still, there is a very positive notion in this bill, and that has to do with the fight against smuggling and fight against the grey sector – so it is natural for any MP concerned with the welfare of the country to vote for it.

He went on to say that the bill has undergone some positive changes between the first and second reading in Parliament.

Indeed, the bill is not the ax that is was, designed to destroy every one of these 400 dealers but still 300 of them will [lose their businesses].

Sin Tax for Smokeless Cigarettes Increases to 40% of Regular Cigarette Tax October 1

Chair of the Budget Parliamentary Committee Menda Stoyanova, who initially introduced a bill to match the sin tax of smokeless cigarettes to that of conventional cigarettes, announced that the sin tax – which currently amounts to 26% of regular cigarette tax – will be increased to 40% from October 1.

The original proposal was pulled out following harsh critics that it is lobbyist in nature and that it serves DPS MP Delyan Peevski’s interests. DPS rejected the notion that the bill had anything to do with Peevski, as he had already sold most of his tobacco business to British American Tobacco. In addition, DPS announced they would be voting against the bill. In the end, the ruling coalition GERB-United Patriots (OP) decided to move forward with increasing the tax but to the lesser 40% instead of 100% of the tax on conventional cigarettes.

The average tax rate of smokeless cigarettes in the EU is 32%, the highest being France with a 67% of the regular sin tax on smokeless cigarettes.

Menda Stoyanova told the Budget Committee that over the next years the product will rapidly increase its market share and thus measures must be taken early on, as otherwise, the budget will face deficits.

BSP countered that the smokeless cigarettes are less harmful compared to regular cigarettes and should be encouraged, much like the regulations that cut taxes for cars that are cleaner and more efficient. To which Stoyanova answered:

If we must encourage the less harmful, let’s encourage eating an apple a day, which at least is proven to be healthy”.

Another concern regarding increasing the sin tax of smokeless cigarettes, BSP ‘s Georgi Tarnovaliyski pointed out, is that it would invite smuggling the product from neighboring countries such as Serbia where they would be significantly cheaper.

Tobacco company Phillip Morris, which currently is the only company registered in Bulgaria to sell the product, under its brand IQOS, proposed that all sin tax for tobacco products be increased or a proportionate rise of sin tax on tobacco products. The company argues that a little increase will go a long way to filling the holes in the budget.

Bulgaria to Play Key Role in Linking China Businesses with EU

The Premier of the State Council of the People’s Republic of China Li Keqiang and Bulgarian Prime Minister Boyko Borissov

The Premier of the State Council of the People’s Republic of China Li Keqiang and Bulgarian Prime Minister Boyko Borissov announced the initiative during the opening of the Seventh 16+1 Summit, which was held in Sofia last week.

Prime Minister Boyko Borissov and I spoke several times to study closely the European rules and regulations, as well as the legal frameworks of the 16 countries in the summit, so the enterprises know the laws that must be upheld. I hope PM Borissov to assume a leading role while China will provide the funding for this center”.

According to Li the center will study the ways in which corporation between China and Central and Eastern Europe could receive support from the EU, the World Bank and the European Bank for Reconstruction and Development. The center will make sure the Chinese projects are in alignment with EU laws “because we are far and have different cultures”, Li said.

This way our projects for cooperation will receive a stable push forward, while Chinese companies will be better inclined to invest in Europe and to prevent future failure.”, Li added.

Li answered concerns that the initiative aims to weaken the EU:

If Europe weakens this would be bad news for China, not the opposite. Europe is important for the development and the peace.

PM Boyko Borissov and Li have struck a deal for the export of 10 million tons of raw tobacco to China. Li said he would fulfill his “friend’s request” for the export.

PM Boyko Borissov said that Bulgaria will work for more investments in Central and Eastern Europe

Supreme Judicial Council Refused Support for Judge Accused of Being Part of a “Gay Lobby Group”

The Supreme Judicial Council refused to extend support for a judge at the Sofia Administrative Court, Polina Yakimova-Ilieva, who was accused by media of being part of a political and media “gay lobby group”.

The reason for the outbursts was her decision to grant residency to a same-sex married couple whereby recognizing the marriage.

The ruling came a month after a ruling by the EU Court, which grants the right of residency of same-sex couples when one of the partners is an EU citizen.

The Bulgarian magistrate cites precisely this ruling in her judgment.

Regardless, editions such as Trud Daily – which follows narratives of Peevski-owned media - came out with an editorial entitled “To Rape the Law”. The piece ends in harsh tones:

[The ruling] indeed is historical in nature because it finally shed light of the gay-lobby in Bulgarian politics, justice system and those paid “media”, who instead of presenting the facts, over the past days have been replacing them with the sob story of a un-natural “marriage””, Trud Daily writes.

The piece is not authored and reprinted by the website Legal World (Praven Svyat).

The Chair of the Supreme Cassation Court Lozan Panov called for the Supreme Judicial Council to come forward with a letter of support for Yakimova-Ilieva. Without debate the Council voted on the motion 6 to 6 and a decision was not made.

Members of the Council in support of the motion were Lozan Panov, Georgi Cholakov (Chair of the Supreme Administrative Court), Krasimir Shekerdzhiev, Tsvetinka Pashkunova, and Atanaska Disheva.

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